Reddit reviews The Naked Trader: How anyone can make money trading shares

1. Yes - An ISA allows £20k tax free.
   
   
2. There are a lot out there. What you need to check for is how much does Natwest charge per transaction. i.e. to buy x number of shares how much does it cost. This kind of goes with your point 4. If you have £100 to invest, but it costs you £10 to buy and then £10 to sell you really only have £80 to actually buy the shares. Even if you bought £90 of shares, you would have to make 10% + just to get you back to £100, but then lose £10 when you sell them. So really you would need a 20% + profit just to break even after transactions !! If you manage to pick a share which is 20% + profit while your starting out - your very lucky :)
   
   
   Bottom line to buy shares and make it worthwhile you probably need £400+ - unless your happy to use the £100 just to test the waters and try things out. £400 would still cost £10 to buy and £10 to sell, but you would only need 5% profit to break even rather than 20%
   
   
   
   
3. Instead of buying shares which come with a £10+ transaction fee (buy and then sell) - take a look at funds. Funds are generally long term 10, 15, 20 years - but you pay a small yearly % fee instead of a one off payment like shares.
   
   
   
4. Dont buy a share based on its price - you need to research the company as you can buy partial shares.
   
   
   If your really really interested in shares over funds then read :
   https://www.amazon.co.uk/Naked-Trader-Anyone-Trading-Shares/dp/0857194135/ref=dp_ob_title_bk
   
   
   If you happy to look longer term, then read about funds / passive invetments - https://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Financial/dp/0273785370/
   
   
   Both these books are regularly recommended across this sub.
   
   

Firstly, these are all my opinions. Don't come screaming at me if you did them and didn't like the result. I'm no expert!

Question 1: Does that sound reasonable?

I personally wouldn't spend £3,500 on a car but I've become extremely frugal recently. Are you sure it won't survive the winter or are you just looking for an excuse to get something better? Break down cover would probably be your cheaper option and wouldn't any repairs still probably be less than £3,500?

My personal advice would actually be to close your overdraft because that money is not yours. It's very hard to do because you feel like you're throwing away £2,500 for nothing but remember that you never really had it in the first place. Only ever spend what you have, you'll live a better life doing so.

Question 2: is there anything I can do now?

• Consider changing your current account - It's a simple win, a lot of banks at the moment are offering an incentive to switch, it's very easy to do, takes very little time and they normally pay you £100-200 to do it. The only thing is you do need a few Direct Debits to move across.
  
  
• Start a Budget - Whether it's on Excel or another piece of software it doesn't matter. Figure out how much actually do need to spend, how much you will need to spend when you move and how much you'll have left over. Personally I decided to pay for a service called YNAB which is around £40 for the year but works for me because I like being able to import my transactions and analyse them.
  
  
• Start an Savings Account for emergencies - Easy access account, put in a set amount of money in each month and forget about that money
  
  
• Possibly Read up about Investing - Only ever invest what you can afford to loose though. I personally just lost a fair amount from stupid mistakes, don't go in to shares without doing some serious research and understanding the extra fees involved.
  
  Question 3: Is there anything I can do next year, once I actually have the year's earning?
  
  Don't wait until the end of the year to start saving. If you think you're going to get £1400 then budget your life around £1200 and set up an monthly direct debit for the other money to go straight into a savings account or investment of some sort. The trick is to make sure you don't give yourself the opportunity to spend the money by putting it somewhere else and forgetting about it.
  
  I don't recommend a Stocks and Shares ISA. Yes it's Tax Free but actually you'd need to make £11,300 profit before start paying tax anyway - It's called Capital Gains Tax, see number 2 here. If you manage to make that much profit on £1400 a month, please let me know your secret!
  
  From my experience:
  
  
• Shares are higher risk - They can be very volatile. One bit of bad news for the company you invest in and the whole thing can drop. I lost ~£500 in shares recently due to lack of/bad research.
  
  
• Funds are a bit more stable - You are lending your money to the bank who has created the fund and they decide where your money is put to work. The fund usually has a name which identifies a sector or speciality and that's the only things they will invest your money in - They decide how much goes where, and moves it around when needed. If one company in a fund does badly, hopefully the other companies in the fund will keep it afloat. The reason I really like funds is because the Bank running the fund wants them to succeed because they take a small cut of your profits. You're also spreading your eggs a bit. I'm biased towards these because I've had a 29% return over the last 2 years through funds and pretty much just put them in what was suggested at the and forgot about them.
  
  The bank I use for funds, shares etc is Hargreaves Lansdown. I'm a big fan of their website and app. They also have "Wealth 150" funds which are they ones they personally recommend will do well. Be careful though, read the small print and don't just rely on me. I found out about it from a friend but then found out the hard way they have clause where if you have less than £50 in an account, they'll just close it and keep the money.
  
  If you're interested in learning to invest, a really good book is called The Naked Trader. The guy doesn't act like a Finance Buff he just makes it ridiculously easy to understand.
  
  The key stories I've learned as someone just turned 29:
  
  
• Don't play with money you don't have
  
• Don't invest in something you don't know about
  
• Don't gamble because in the long run you'll always loose more than you win, you're not different in this sense
  
• Force yourself to routinely look at your balance even if it's not healthy - Being ignorant makes it worse
  
• Stay away from Credit Cards, took me 3 years to get out of that
  
• Put your money to work, never just leave it in a current account. Banks are literally paying you to borrow your money so at least shove it in a savings account, even if it's for a few pennies
  
• Be good with time management - It's common practice for banks (utility providers, car insurance, etc) to give you a good rate for a year and then hope you forget and leave the money in there. Stay on top and transfer it around when the promotional rates!
  
  Good luck!