to be read in several ways. It’s a reference book, so you don’t have to read the chapters in chronological order, from front to back, although of course you can read it cover to cover, like a novel, to gain appreciation for the huge variety of investment opportunities that are available. (If you approach the book this way, I suggest doing so with pen and paper at the ready so that you can note areas for further research on the Internet or from publications such as the Financial Times.) Or you can just pick a topic that interests you or go straight to a section that answers a particular question you have.
But my preferred way for you to read this book is to go through Part I and then pick up on the investments that concern or interest you. For example, after reading Part I you may want to go straight to Part III to find out what collective investments are because, say, an advert about collective investments has caught your eye or a financial adviser has suggested one or two of them. Reading this section helps with your pension choices. But you may want to skip the chapter on buy-to-let properties because, say, being a do-it-yourself landlord is the last thought on your mind. Or the one on betting opportunities because they’re simply too scary.
I’ve tried to avoid jargon as much as I can, but know that the investment world is full of it. Like all professions and occupations, finance and investment have their own insider language that’s intended to mystify outsiders. When I do use the industry’s language in the text, I italicise the term and define it for you in an easy-to-understand way.
While writing this book, I made some assumptions about you:
✔ You’re either completely new to investing or have limited information about it, and you want someone to help you understand what investing is really about and what types of investments are available.
✔ You don’t want to become an expert investor at this point in your life. You just want the basics – in informal, easy-to-understand language.
✔ You want to make up your own mind while using a guide through the investment jungle. You want enough pointers for you to risk only what you can afford to lose and for you to make a worthwhile return on your hard-earned cash.
Find out more about investing by checking out the bonus content available to you at www.dummies.com. You can locate the book’s e-cheat sheet at www.dummies.com/cheatsheet/investinguk, where you’ll find handy hints and tips.
Be sure to visit the book’s extras page at www.dummies.com/extras/investinguk for further information and articles.
I’ve highlighted some information in this book with icons:
This book is set up so you can dive in wherever you want. Feel free to go straight to Chapter 1 and start reading from the beginning to the end. Or look through the Table of Contents, find your area of interest and flip right to that page. Or better yet, read Part I and then flip right to that page of interest. Your call.
Wherever you go from here, if you find a piece of advice or a warning that you think applies especially to you, copy it down and then fix it to the fridge with a magnet, or pin it on a board.
And as you read through this book, either in part or in whole, why not practise some dry-run investing? Buying a dummy portfolio using pretend money is always a good way of getting familiar with investment without the worry of losing money. You’ll find plenty of resources online to help you establish and plan your pretend portfolio.
Part I
Getting Started with Investing
In this part ...
✔ Find out all the things you always wanted to know about investing.
✔ Discover what the term investment really means.
✔ Look at the five basic investment choices – the foundation of most portfolios.
✔ Discover how to increase the benefits and shrink the drawbacks of investment choices.
✔ Learn that the small print is vital in understanding what you invest in – ignore it at your peril!
Chapter 1
First Steps on the Money Trail
In This Chapter
▶ Understanding basic investment philosophy
▶ Discovering your own money make-up
▶ Looking at where you may be investing already (whether you know it or not)
▶ Getting familiar with five basic investment choices
This chapter explains the first steps you must take in your investing ventures. But take heed: in this chapter (and throughout the book, for that matter) you need to think deeply about some personal matters, to understand yourself better and know where you’re going in your life and what makes you tick. In other words, you need to wear two hats – that of investor and
