For all the new readers, here at IT, i aim to collect guest articles from some of the interesting characters in the finance space to contribute towards the free articles i post out. My aim is to grab a diverse range of perspectives and experiences to share with you all.
We currently have three female guests working on articles as we speak, so i am excited to finally get some female representation in this series.
Today’s piece marks the third edition of the guest article series. Today’s guest is a popular character on the FinTwit scene who is most commonly known as @financepapi_
Curtis is largely known for his sage investing/saving advice, his awesome sneaker business, and his dad jokes (which are only sometimes funny).
I believe that most people are unaware of the experience Curtis possesses in the financial space, so today’s guest article uncovers some of that intrigue.
I certainly enjoyed this week’s edition, and i am sure you will too.
When people talk about “sink or swim”, my introduction into investing is the embodiment of that phrase. I was working for BT during my summer before going into my 3rd year of university, and I vividly remember coming across an article on the Internet that China had banned ICOs. It was August 2017, and so began my journey into the rabbit hole that is the world of cryptocurrencies. I began researching cryptocurrencies and inevitably came across Bitcoin, which I was previously aware of as I’d heard it was used on the Dark Web.
And then came my great mistake…
I downloaded Trading 212 and began with a £10,000 demo account. After playing around with it for 5 days (and yes, playing is the correct word, because I hadn’t a clue what I was doing, although I thought I did at the time), I was up by about £4,000. With my newfound confidence, I went onto the normal version and put £1,000 in the account. Bitcoin was around $3,800 and I opened a number of long positions on Bitcoin, and after two days, I was about £1,000 in profit but had not closed the positions. As the days went by, the unrealised profit shrunk until I was eventually in negative. I closed the long positions and opened a number of short positions. Because T212 uses leverage, my positions were eventually liquidated. I continued over the course of the month trying to make my money back, but I kept on getting liquidated, and eventually lost £4,000 which is a considerable amount for a university student from a working-class background.
Up until April 2018 when I stopped leverage trading cryptocurrencies, I developed my fundamental analysis and a very basic level of technical analysis and made my £4,000 back and around £850 profit on top. But there was a serious lesson in there, and the Dunning Kruger effect perfectly illustrates how my misplaced confidence led to me misplacing £4,000. This lesson extends to anyone starting their investment journey: do not try to run before you can walk. You might think a few lucky picks on a demo account has made you the new Warren Buffett, but believe me, one of the only ways to become rich overnight is the lottery (and definitely not through these Forex scammers on Instagram, just to throw that in)
My dissertation project was on cryptocurrencies, and instead, I began to buy Bitcoin and a number of altcoins (which I still hold and with my overall portfolio in profit, thanks to great entry prices) rather than leverage trading them. Like I imagine with most great personal finance stories, I began to get interested in MoneySavingExpert and realised there was an abundance of free information out there to help. Key word FREE, so look to that before you start buying courses from people online. I took my laptop, TV, Xbox (yes, they are better than PlayStation) and stereo to university with me, and made sure I always had enough to cover the cost if all of them broke at the same time, as unlikely as that was. Unbeknownst to me, I had created a sort of “emergency fund”, if we are using the technical term. Emergency funds, in my opinion, should be created before you begin investing. An emergency fund should be money that is easily and readily available, so you should keep it in accounts that you can withdraw from immediately, rather than investment vehicles that are not as liquid. As (mis)fortune would have it, when I was in 3rd year, my laptop broke, and I was easily able to buy a laptop the next day; it would’ve been the same day, but Argos isn’t open at 11pm.
I got a graduate job fresh out of university working as a foreign exchange dealer, and this gave me direct exposure to how and why currency pairs move, and I led the office in providing finance and economics news that the office would use to target specific clients. It is pivotal you keep up to date with what’s happening in the economy, and that you enjoy learning about it, as it will help keep you actively engaged in your own finances and question how news may shape your current financial situation.
I then became a banking specialist, and within 2 months, my nickname was Mr ISA (I would have preferred Mr Handsome, but one can only dream.) For those starting or that have started their investment journey, seriously consider making use of ISAs, as they are tax-free wrappers, and let us face it: most of us hate being taxed. I automated my savings and investing by setting up Direct Debits to go out the day after I had been paid. The benefits are twofold, as it requires less effort on your behalf, and I liked to integrate the cost into my salary, so it was easier to stick to and budget.
Example: you earn £2,000 a month after taxes, and each month you save and invest £500, you then budget for £1,500 each month (£2,000 - £500)
After 6 months, I was promoted to a Treasury Analyst which gave me amazing exposure to a number of financial modelling systems (my thoughts go out to all of us that have had to use QRM before) and perhaps more importantly to my financial journey, gave me a thorough understanding of mortgages and savings, as those were the two products on the bank’s balance sheet of which I would stress test. I can confidently say my personal finance knowledge has increased in line with the amount of time I have worked in finance, and for many people, you will also find it doubly rewarding working in the industry.
So, you know how I mentioned that most people hate taxes? Well, I really hate taxes. The solution: move to Dubai.
I have a thread on Twitter outlining all the details associated with moving to Dubai if anyone else wants to do the same.
Since I have been here, I really wanted to develop my “side hustle”, so I have been buying and selling sneakers and currently have an inventory of over 100 pairs. The boxes have been stacking up like a game of Tetris. I gave a free guide on Twitter that I sent out to over 500 people, but I am looking to make a comprehensive version to really push people into it. To stay on the theme of Twitter, I made an account in December 2019 and now have over 7,000 followers: I have posted a number of threads on investing, saving, and housing schemes, which are mostly aimed at beginners.
My experience of Twitter so far is that too many people obsess over instant gratification: they want to get rich overnight, and this is probably why these Forex scammers you see have so many victims. Do not fall into the trap I did and think you know too much, too soon. Investing and saving should almost always be seen as long term, and you should let the power of compounding work its magic.
Begin by clearing debt you have, focussing on the debt with the highest interest charges first. Again, I will refer to MoneySavingExpert, as they will let you know which cards allow for Balance Transfers, whereby you might be able to reduce and minimize interest charges.
Move on to building an emergency fund, with the general consensus being that this should be the equivalent of 3 – 6 months of wages. However, corona isn’t playing, so if you wanted to be even more cautious, I would not be against that. For your emergency fund, look for the highest interest easy access accounts, and I use the term “highest” loosely, because we are in a low interest rate environment.
Begin investing, with the most suitable option for a beginner usually being a well-diversified portfolio within a Stocks and Shares ISA (tax-free, remember!) For beginners, I tend to recommend Vanguard, as it has low platform fees and a number of diversified Exchange Traded Funds (ETFs) that you can have automated Direct Debits to. You can make use of “pound cost averaging”, where you are average the cost of the units you purchase over a period of time, rather than lumping in a large sum of money straight away.
If saving for a house, and you are a first-time buyer, I love the Lifetime ISA. You can put in £4,000 each tax year and receive a £1,000 government bonus on top of that. The LISA can be a simple savings account, or it can be through stocks and shares. Remember, if you choose the latter option, your LISA savings can also go down in value. Again, I have a thread on a number of platforms available. It is worth noting these are more common amongst building societies rather than banks. Do not fear, as, on a very basic level, the difference between building societies and banks is that the former is not owned by shareholders. All the platforms I recommend are FCA approved.
Diversification does not just apply to your stocks and shares portfolio. You can consider other ways of diversifying how to make and preserve money, such as Peer-To-Peer lending, reselling, freelance work and “side hustles” in general.
Just remember: when you are searching for ways to make money, if ever you come across anything that sounds too good to be true, it most likely is (yes, that’s directed at Forex scammers, F boys and the people that sell BooTea)
To finish, I recently tweeted that the “Bank of Mum and Dad” provide financial help to over 60% of home buyers under 35, with the average “assistance” being £24,100. I will not criticize that, as I would do the exact same for my future children if I could. What I would take from that though is this: social media will have you comparing yourself to others and their financial journey. Everyone’s journey is unique and with varying levels of help. Make the small changes and smart budgeting decisions that will help you achieve your financial goals.
Well, that concludes edition 3 of the guest article series, and i think you will agree that was an interesting insight into Curtis’ early career. The theme throughout the piece included some sage advice for younger investors, as well as stressing the importance of saving.
Stay tuned for the next guest,
Until then, have a great day,