Latest news with #Freetrade
Metro
5 days ago
- Business
- Metro
Make money from your living room with these 7 investing tips for novices
Money is a major part of human life. We literally need it to survive, from paying bills to buying food, not to mention simple pleasures like holidays. Yet basic financial understanding is something a lot of people struggle with. A 2024 study by Freetrade, which quizzed 2,000 people, found 81% weren't confident in their financial literacy and 91% lacked confidence specifically around investing. Meanwhile the gender investment gap is growing, particually among Gen Z and millennials. The latest data suggests 41% of men aged 18-34 invest, compared to just 20% of women. Investing can increase individual net worth – it gives your money the chance to grow, and if done successfully, can generate passive income. Ladies, we're missing out on money! So, Metro spoke to Nisha Prakash, lecturer in Financial Management at the University of East London, to get some beginner insight. Specifically, simple hacks you need to master before taking the leap. First things first, Prakash says that before you start investing, you need to have a general idea of why you're doing it with clear financial goals. To view this video please enable JavaScript, and consider upgrading to a web browser that supports HTML5 video This could include buying an asset, for example a house or car, paying for wedding expenses, funding children's education, or, if you're thinking more long-term, retiring. 'This will set the timeline and target, which could help you choose the financial instruments based on the required risk-return,' explains Prakash. Investing – in it's most basic form – means buying something in the hope it will increase in value. So once you know what you're aiming for, you can start looking at options such as ISAs, or stocks and shares, with more clarity. On that note, don't dive headfirst into something you know little about, nor can afford. Prakash asks: 'How much volatility can you handle?' Meaning, can you afford to put all your eggs in one basket? Or, are you better off playing the long game? Aka, taking baby steps with your cash to lower the risk. Prakash notes that many don't realise that investing is a spectrum, and there a various ways you can grow your money. It's not just like what you see in the movies: men in suits shouting and screaming at stock market monitors. If you want it to be, investing can be stress-free. The expert says: 'There are many online questionnaires available to measure risk tolerance. Just because stocks give you a high return, it might not be ideal for everyone.' For some of us, Prakash states that fixed-rate ISAs work the best. These are low-risk savings accounts where you agree to lock your money away for a certain period. In exchange, you're guaranteed a tax-free interest rate. There are different lengths of fixed rates, typically ranging from one to five years. However, they often come with a clause: you cannot withdraw money or close the account during the fixed rate period without a penalty. But, because you're agreeing to leave your money for a set amount of time, you're usually rewarded with a higher interest rate. If you know you'll need to dip in and out of your savings pot during the fixed time, you're better off looking into an easy access ISA. Fixed-rate ISAs are commonly suited to people who have lump sums they want to invest and know they won't need to access them, which leads us to our next point. In contrast, what's important with these kinds of accounts, is that you can access them as soon as you need the money, explains Metro's Andy Webb. Here are four top-paying accounts that anyone can open. Bank: Cahoot Account Rate: Sunny Day Saver Rate: 5.00% AER variable for 1 year on balances up to £3,000 Account Rate: Sunny Day Saver Bank: Charter Savings Bank Account Rate: Easy Access Rate: 4.46% with unlimited penalty-free withdrawals with a minimum deposit of £1 Account Rate: Easy Access Bank: Skipton Building Society Account Rate: Quadruple Access Cash ISA Saver Rate: 4.00% tax-free/AER variable Account Rate: Quadruple Access Cash ISA Saver Bank: Yorkshire Building SocietyAccount Rate: Easy Access Saver Issue 3 Rate: 4.10% and allows unlimited penalty-free withdrawals This is so important, Prakash emphasises. While some experts say you need at least three months' worth of living expenses, Prakash says it's better to be on the safe side and go for six months. An emergency liquid fund is simple, she says. It protects you from having to sell assets if unexpected expenses arise. Or, if you lose your job or income. Ultimately, having a financial buffer takes the pressure off, as it means you don't have to dip into your savings you've worked so hard to invest. Prakash says it's vital people learn about the basics of investing. This includes financial instruments, risk vs. return, diversification, interest rates, and insurance, to name a few. The expert explains: 'Complicated products don't necessarily translate to better returns in the long term. The trick is to understand the business well before investing.' As Warren Buffett popularly said, 'Never invest in a business you cannot understand.' There are so many resources online to give you a better insight into investing. Platforms like Money Saving Expert have various beginner's guides, from educating on stocks and shares, pensions and investing, and investment funds. 'Having a budget and tracking your cash flow allows you to understand how much you can realistically invest each month,' says Prakash. While Prakash says there are apps that can help track budget and expenses, the 50/30/20 rule is also a great tried-and-tested method. This hack can help build your emergency fund, too. Essentially, the rule involves dividing your spending into three categories: needs, wants and savings. Then, with each paycheck, allocate 50% to needs, 30% for wants and 20% for savings or debt repayments. Knowing this exact amount each month allows you to invest that 20% without fear of not being able to afford it. Needs – 50% of total salary Needs include essential living costs such as rent or mortgage payments, bills, food and transport to and from work or the school run. Wants are non-essential costs, such as shopping, eating out, gym memberships, subscriptions, trips away and nights out. The final 20% of your savings should then go towards paying off debt beyond minimum payments or putting money into a savings account, investment, or pension fund. Source: HSBC Prakash recommends checking your credit report to 'understand the factors impacting your credit score,' if there are any. Should you have any errors on your report, for example, it shows an already closed loan, get it corrected. More Trending There are plenty of easy ways to check your credit report online. Experian allows you to check as many times as you want for free, without it affecting your score. Not only does this give you peace of mind, in terms of knowing whether or not lenders may reject you, but as you improve your score, you'll have access to better deals, including getting credit at lower rates. There's no shame in needing a bit of hand-holding at the start, says Prakash. If you'd rather have a little guidance before investing and making financial decisions in general, consulting a certified financial planner might be the way forward. 'They'll help you build a personalised plan' in terms of investing, and be able to explain any queries or worries you may have. View More » MORE: I'm a 40-year-old divorcee — this is exactly what I spend in a month MORE: Phone thieves stole £10,000 from my savings but the bank says it's my fault MORE: The £1 pension trick that could save you losing thousands
Daily Mail
29-04-2025
- Business
- Daily Mail
Why did Freetrade crowdfunders have to wait almost a month for payouts?
Crowdfunders of Freetrade were forced to wait almost a month for Crowdcube to release their funds after the investment platform was acquired by IG in January. The delay comes despite the acquisition being completed on 1 April and the funds being received by Crowdcube on 4 April. FTSE 250 listed online trading platform IG purchased the free share dealing app back in January for £160million. This is Money understands Crowdcube was provided with Freetrade's shareholder register two weeks before the transaction was completed and had knowledge of the shareholder register before the deal was announced. Another payment agent executing shareholder payouts completed the majority of payments within 24 hours of the deal closing. A spokesman for Crowdcube told This is Money: 'As an FCA-regulated entity, we are required to carry out Anti-Money Laundering checks at the point of payout - even if these checks were completed at the time of the original investment. 'These are regulatory obligations that must be fulfilled for every transaction and investor. 'The payout timings followed our standard process - we take consumer security seriously and aim to ensure the process is as smooth as possible. 'This exit was particularly complex due to the number of individual shareholders in Freetrade, which exceeds 22,000. Freetrade was backed by crowdfunding investors via Crowdcube, with the platform valued at £650million at one point in 2021. Crowdcube is a crowdfunding platform that allows investors to buy equity in start-up companies as part of fundraising rounds. The firm faced backlash from its crowdfunders after the deal was announced, as many investors realised losses on their initial stakes. In 2023, crowdfunders bought shares at £2.60 each, but some will have received as little as £1.19 per share. Crowdcube added: 'As of Friday last week, the majority of people had been paid. 'Most of the payments still outstanding are to people who have not provided their bank details. Our team is contacting them regularly to get the required information.' One crowdfunder, John Haagensen, received his payment of around £15,000 on Friday. He said: 'It's quite concerning and, frankly, disappointing, especially for the many small investors who continue to support Crowdcube and its mission. 'Their actions are unfair. I have lost a significant gain on the stock market where I had intended to place my funds.' Matthew, another Freetrade crowdfunder, was paid just after 3am on Monday. Before he received the payment, he told This is Money: 'Each day that Crowdcube delayed cost me interest. 'Crowdcube have said that they are completing anti-money laundering checks. I don't see how this can take so long.' Matthew planned to use his payout for an overpayment on his mortgage. 'I'm not sure why this had to be prescheduled rather than them just sending it on Friday,' he said on Monday. Even after being paid, Matthew was unhappy. He said: 'From the sale to IG group, I am expecting to receive £719, so a small profit. 'While I am grateful that I am making a profit rather than a loss, if I were able to participate in a vote on this sale, I would have voted no. I am receiving £1.20 per share. 'However, I understand that the bigger institutional investors are getting £2.60 per share.' He added: 'I honestly feel that us Crowdcube investors have had the raw end of the deal.' Many investors made a loss on their stakes.
