Getting on top of my finances for 2021

How I'm investing my spare cash this year after poor returns from ISAs

By Daniel Bate

25 Jan, 2021

Disclaimer - this information does not constitute any form of advice or recommendation and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision.

I've been working full time now since I finished university in May 2019 and slowly but consistently been building up some savings. One of my favourite quotes from Warren Buffet is as follows:

"Do not save what is left after spending, but spend what is left after saving"

So each month as soon as I am paid I move a fixed amount (around 10% of my monthly pay) to a savings account. Then I'll budget for the month ahead, and move anything left over to a different savings account. Studies have found that you are more likely to save money by creating direct debits and automating the saving process, rather than saving what is left after spending, so this is the approach I take with my own money.

However due to the current global situation meaning the interest rates on my savings accounts are almost 0%, it's started to dawn on me that my savings are actually devaluing against the current rate of inflation. So for 2021 I've decided to be more proactive with my savings, and start to invest some of it rather than rely on commercial bank accounts. However I want to highlight that I will only be investing what I am comfortable with and will still be saving a fixed amount each month that will not be invested.

So here is how I have split my investments for 2021:

Crypto Markets

This is by far the highest risk investment that I've made. The volatility of most cryptocurrencies means they are not recommended if you are looking for a safe investment. However the greater the risk, the greater the reward and I have had a decent amount of success with my crypto investments recently. I've been doing a lot of research into decentralised finance and consequently took it one step further by investing into cryptos that I thought have decent long term potential.

If you too would like to start investing in various crypto markets, I'd recommend checking out Coinbase. Coinbase has a great range of markets, loads of educational material and has one of the best crypto interfaces. They even give you free currency when you complete various training quizzes and videos. Also if sign up using my affiliate link, then you (and me) will receive $10 worth of Bitcoin once you've traded $100 worth.

Stock Markets

I haven't ventured too deeply into stock markets as there is an awful lot on offer, but I try and keep up to date with prospective tech investments. I'd recommend investing in areas that you are interested in as you will already have a good knowledge of the market without realising, and this will make the research process far easier.

I buy and sell stocks using Freetrade. Freetrade offers loads of stocks and has a really user friendly app and makes buying and selling stocks a really user friendly experience. If you sign up using my affiliate link, you (and me) will recieve a free stock worth between £3-200! So it's worth just signing up for the free stock.

Stocks and Shares ISA

I also decided to open a stocks and shares ISA with Wealthsimple. A Wealthsimple stocks and shares ISA is a great way of investing your money for a medium to long term commitment if you want a lot of decision making taken out of your hands. I deposit money into Wealthsimple, and they will invest it into various stocks for me. They even have a questionnaire during the sign up process to determine what kind of an investor you are (how likely you are to take risks), and will adapt the trading algorithm to you. Using the app you can also see how your money is being invested. They also have an option to only invest in socially conscious stocks. If you sign up using my affiliate link, then you (and me) will get £5000 managed free for a year.

There is a huge range of prospective investments out there, but these are the ones that I felt were most suited to me. There's plenty of resources out there so do your own research, and hopefullyHere's to hopefully more financially savvy in 2021!