Women and investing

OK welcome everyone it is so good to have you all in here with me in this webinar tonight I'm very excited for the hour that we're going to be spending together and hopefully I'm going to answer a lot of your big questions when it comes to investing I've really designed this hour to make it's as approachable as possible and trying to remove as much of intimidation from the topic so I am assuming zero prior knowledge and I'm really encouraging and inviting everyone to drop questions in the Q&A as we go along and I'll try and get answered as many as possible towards the end of the call but before we get started I will introduce myself I find this slide always a little bit awkward Just speaking about myself for a minute so I'll go through pretty quickly the main thing you need to know is that I am incredibly passionate about helping women getting clarity gain control and gain confidence over managing their finances I started a company about four years ago now which is a financial education app and we've helped over 150,000 women in the UK on their investment journey on their debt payoff journey on their salary negotiation journey Just really trying to give the tools to be able to build a brighter financial future before that I was working in the world of finance I was in consulting on the financial department side and I am also a guest editor at the Financial Times but the main thing you need to know from this slide is that when I was at university there was a moment that for me was really defining and that was Just as the markets came crashing down a few years ago I notice that a lot of my male friends were talking about investing they're talking about cryptocurrencies they were talking about building wealth and actually saw that out of my female friends were not being included in those conversations the WhatsApp group chats were always mainly men and so I was really struck by this and thought how come there is still such a legacy of outdated gender norms when it comes to the topic of finance and is there something that we can do to close it and so I'm committing my life to the mission of closing the gender wealth gap and I'm doing this through financial education now that's what you need to know about me let's go into what you need to know about the next hour let's get the admin out of the way the really important piece of information here is that the views I'm representing are Junos views they're not Santander’s views and they're also only for educational purposes so this is by no means financial advice you need to go and seek support from a financial advisor to get personalised recommendations now in this meeting there is a Q&A function that you are able to see in your call it's Just in the toggle bar the invitation is to Just write your questions whenever they  arise and I will be able to get back to them at the end of the call will also going to have an interactive session so there's going to be a few polls as we go along but I'll explain how they work as we go into them so setting the scene First things first I think it's always important to make your money relevant and see how it can actually change your life Because I know that the topic of investing can be a little bit overwhelming so let's go back 50 years or in the year 1974 you have Just inherited from a very distant relative £10,000 and you are very excited about that money but you don't exactly know what you we are going to do with it it's basically two options that you're considering the first one is to keep the £10,000 in cash this means either you keep it in physical cash or you put it in a bank account in a savings account and you Just don't touch it or you decide actually I am going to invest the £10,000 into the stock market now Fast forward to 2024 what do you believe would have happened? and so you have your first poll that is open in front of you I'm going to read through the answers and you can guess what the right answer is the first one is the cash would have stayed the same but the investments would have decreased Because we've had so many recessions over the last 50 years the second one is the cash would have stayed the same but the investment would have grown tenfold and in the last one is the cash would have decreased in value and the investments would have grown thirtyfold so I'm going to give it maybe another sort of 10 seconds Just to give some time and then I'm going to share the results with you of the poll and Obviously we're going to go into the meat of the topic so I'll give it another couple few seconds we've had a lot of votes OK so I'm going to end the poll now and I'm going to share the results with you so you can see what everyone else has said So what we can see is that 6% of you believe that the cash would have stayed the same and the investment would have decreased about a third of you thinks that the cash would stay the same but the investment would have grown quite a bit and then 62% of you who are right think that the cash have decreased in value and the investments would have grown thirtyfold so the last one is Obviously the right answer now I'm going to close the poll and we are going to look at the two graphs which I believe are the most important ones that you will see when it comes to the topic of money the first graph is what would have happened with £10,000 over 50 years had you kept it in cash and what you can see is that the value of cash has gone down immensely actually it's gone down so much that the £10,000 in cash today they would only be worth £659 and the reason is inflation I think we've all heard a lot about inflation in the last few years and inflation what it means is that the cost of basically everything is going up incredibly quickly but the money that you have in cash that's not growing and so the problem is if you have £10,000 in cash maybe you were able to buy a car back then nowadays you wouldn't even be able to get I don't know what you can get with £659 but definitely not a car So what you can see is inflation erodes the power of your savings if we Just looked at a tea for example on average in the UK if you buy a tea five years ago it was £1.80 today it's £2.80 so you can see how quickly prices are increasing and I think we're all feeling it so this is if you would have kept it in cash now what would have happened if you'd invested it? it would have grown to be the equivalent of £335,000 today now this graph we will come back to it again at the very end of the presentation Because hopefully by then you will have understood everything that's going on here at the moment all you need to know is had you invested £10,000 in the S&P 500 will cover with US is don't worry you would have equivalent of £300,000 today so you can see that there's a very clear difference between having it in cash and having it in investments now I Just want to say this is Obviously a historical example and what has happened over the last 50 years we don't know that this will happen again in the next 50 years but what we're basing ourselves on what has happened historically and historical data to make future assumptions in this case I think when I believe when I think of personal finance and I believe Santander shares this view we think of sliding door moments we think of these key moments in life where one decision or something that's happened to you can make a radical change and I really believe that back then 50 years ago those £10,000 it is a radical change of lifestyle that has been created Just by being able to know how to invest that money and so my hope today is that for everyone who is attending this call we are at the beginning of one of these sliding door moments and that I'm planting a seed the seed of having the confidence to start investing that you're going to take away and you're going to do further research and that this might be for you one of these moments where we can look back at it and thank yourself for making maybe your riskier and a bolder decision but hopefully one that would pay off so how does investing actually work? let's dive into the very meat of it to get started what is the difference between saving and investing? We’ve seen what the difference in outcome is but what is the difference in behaviour? when you're saving you're essentially putting cash aside and the idea is that you're keeping this cash for short term medium term goals when you're investing what you're doing is that you're buying something with that money and you're hoping that the value of what you're buying is going to increase over time now there's lots of different things that you can buy investing isn't Just investing in the stock markets you can invest by buying a Hermes bag you can invest by buying an apartment you can invest by buying a piece of art there's a lot of different ways to invest but the idea is I'm buying something Because I think it's going to increase in value over time and now Obviously Because this increase in value needs to happen you need to give it some time so that makes sense that investing is for goals that are Usually a little bit further away so five to seven years is the minimum that we say you need to have your money invested if you have a goal that is in two years’ time if you want to buy a House and you need the deposit and you need that money in two years the idea is not to invest up Because you don't know for sure that it's going to go up in price now the typical assets that you would purchase is in investing in what we will cover today funds so baskets of investments and when you're saving is cash and Obviously the sort of return that you can get from a cash account I think today you might be lucky that you get a little bit higher you might be able to get sort of 4.5% if you're very lucky but it's still not a lot whereas when it comes to investing if we look back at historical data it's been more or less sort of 8% on year so the annual growth is typically higher so we kind of know there's a difference between saving and investing now I think everyone here in this call is probably very keen to start investing Because I've sold it pretty well but I wouldn't do my job properly if I sent all of you off to start investing is Obviously risky and your capital might go up and it might also go down and so not everyone is ready to start investing tomorrow there are three things that you need to do before you start investing and those three things are number 1 having an emergency fund an emergency fund is money that you set aside for a rainy day and that you do not touch should there be a sale of your favourite company online you really keep it in a separate account and you don't touch it and typically the first question that comes up is ok - how much do I need in an emergency fund? what I would say is it's three months of essential living expenses essential living expenses is rent food utilities if you have medical bills anything that you need to survive you multiply it by three and then that's how much you need to have saved up in an emergency fund and now the idea is you don't want to have this in your general bank account Just mixed in with everything else I want to reduce the amount of mental math that you have to do money needs to be easy so you open a separate part or a separate account and you put your emergency fund in this and find the highest interest savings account and then you know that this is for emergencies and you don't touch it now the second thing you need to do is clearing any high interest debt that you might have so high interest debt is typically something that has an interest rate of more than 8% more or less it could be 7/9 I mean it's it's a sort of it's none of it's a hard rule but the idea is your debts that has a high interest rate is growing it's growing very quickly and so if you're trying to invest your money with the hope that you're going to have more money in the future but at the moment your debt is also growing what you're doing is you're trying to fill a bucket that has holes at the bottom and so Obviously if you were in that scenario the first thing you would do is try to fill the holes first and then fill it with water and you want to the same when it comes to investing you want to make sure that the high interest debt is paid off first Because that is your leak in the bucket that's where your money is going out so close that first and then you try and fill it by investing and then the last one is maxing out your employee pension contributions so here it's not fair not everyone will have the same contracts or the same working situation but some employers quite a lot of employers in the UK will actually pay more into your workplace pension if you tell them that you're also going to increase your own contributions so it's one of the only moments where you can get free money in the UK and the way it works is imagine you are contributing 3% of your income to your pension and your employer is contributing 5% this is pretty standard if you go to see your employer and you're saying hey I'm actually going to increase my contributions by 3% so actually what I'm going to be paying 6% they might say OK that's good I'm going to do the same I'm going to bump you by the same amount so 3% and so they're going to pay you 8% now instead of five and so that means that it totally you're getting 14% so that's 3% that your employer is contributing on top is free money it's not being taken out of your pay so make sure that you Max out any employer pension contributions if this is something that your employer doesn't do today take it with you into a salary negotiation in the future it might be that you will look at a different employer or it might be that you look at the same employer but you are due for a raise this is something you can bring up as a negotiation tactic I want higher employee pension contributions OK so we’ve cleared the air now let's go into the different asset classes that we can invest in and I Just want this to be background information I don't want you to get overwhelmed with all the information that I'm going to share here but what you need to know is Just that there are essentially different things that you can purchase, oh, I’m so sorry, the tv has Just come on, ok so the first asset class is the one that we all know very very well and that’s called cash I think we know what this means and I don’t need to share a lot detail it’s what you keep in your bank account the second one that we also know very well is property when you purchase a property to either live in or an investment property this is also investing then there is what is called bonds, bonds is essentially when you are lending the government or you are lending a company a certain amount of money they are promising to pay you back in the future and on top of that in order to say thank you for lending the money you are going to get a little bit of interest so a bond is essentially if you think about the mortgage that you have on your House that you take out on your House, you are essentially being the bank but for the companies or the government then there is something called alternatives this is all the things like cryptocurrencies the Hermes bag that I was mentioning really expensive wine everything that is kind of non-traditional investment tool and then commodities is oil gas and gold that type of stuff and then the last one shares is the one we are going to be talking about today and shares are very simply put a small stake in a company a very small piece of a huge company so if we take the example of Apple Apple has over 2billion shares outstanding today and so you as an investor you can own a share of Apple which is one 200 billionth or you can own 10,000 shares of Apple you essentially Just own a tiny piece of that company and the way in which you access this tiny piece of the company is on something that is called the stockmarket or the sharemarket when we speak about stocks or shares you can kind of assume that it means the same there is a small grammatical difference but it really doesn’t matter so stocks and shares are the same and so when you want to buy a tiny piece of Apple you go on the stockmarket now the stockmarket is not one universal thing that the entire world is Using the stock market Just like every market in the world has a number of stock exchanges so you have a vegetable market that may be in London a vegetable market that may be in Brighton right and it's the same when it comes to the stock market there's different stock exchanges where you can purchase different types of companies now you might have heard about for example two of the big stock exchanges that exist in the US there is the NASDAQ I don't know if you've heard that before or the New York Stock exchange both of those exist in the US it's two different stock exchanges in one country and it will Just trade different types of companies so NASDAQ that will be more tech companies and you'll have different sort of company will be listed on either of those and the way in which we think about the performance of a specific Stock Exchange is by looking at what's called market indexes so this is the most I am going to share with you by the way this is the side that is a bit heavy then it gets lighter market indexes the best way you can think about them is like a class average so if we think of the London Stock Exchange how do I know how it's performing as a whole it has all of the British public companies on it actually what I'm going to be looking at is the performance of the FTSE 100 FTSE 100 what it means it's very simple the 100 biggest companies on the London Stock Exchange if I want to look at the performance of the New York Stock exchange I look at the S&P 500 the 500 hundred biggest US. companies Paris Stock Exchange I look at the CAC40 40 biggest French companies so you've seen those numbers before they look intimidating it's really not that complicated once you know what's behind it and that's the case with a lot of finance it's very jargony but once you understand it it's very easy and you might recognise the SNP 500 from a graph that we've seen on what would have happened to £10,000 had you invested them I Use this as an example So what it means is that you actually Just invested the £10,000 in the 500 biggest US. companies that's how we got the results that we saw before so now you know what is stock market is you know what a share is you know that you might want to purchase some shares what actually influences the price of the share what makes it go up and down there's no science here no one really knows otherwise you would be incredibly rich but there is broadly speaking 3 things that influence the price of a share the first one is internal performance how well is a company actually doing when a company is traded on the Stock Exchange it means that people like you and me can buy it so it means they need to reveal a lot of information on how they are performing Because that’s how people like you and are going to decide if we want to purchase it and so they do all of these reports which they publish and typically what happens is reports might be a little bit better or a little bit worse than what was expected and so if we take the example of Disney they posted a revenue of 18.5 billion revenues and the expectations was 18.8 billion revenues so you can imagine that came out it was a bit lower than expected and whoop it dropped by 4% the share price so the company performance is a big big driver then another element is there is something that Is something that is out of control from the companies and that's how well is the economy going we have all seen these very very alarming newspaper fronts everywhere stockmarket biggest fault since 2008 I mean it’s very fear mongering but the economy influences share prices and last one the least measurable and tangible is called investor sentiment or how investors people like you and me perceive a company so now especially with the age of social media what were seeing is that there are scandals being outed of all the time and actually if someone like Mark Zuckerberg said something or tweet something what is a little bit left or whatever it is Just something that doesn’t land very well that the share price of Facebook or Meta could actually go down quite a bit even though the company is doing the same in the economy is the same so there's this investor sentiment that goes into it as well so now that we know how the stock price is actually effected lets go into the big question on how do you actually make money investing in shares there's two main things the first one is growth and the second one is dividends the main way you’re going to make money  is growth dividends is a lot smaller but growth very easy you buy something and you sell for more that’s it and the difference is called capital gains so that's how much money you've made now when it comes to growth let’s look at an example Apple in 2014 cost $22.00 for one share and here we can see that 10 years later $233 so in 10 years by doing nothing had you been an investor in Apple you would have made $218 that’s owning one share imagination if you’d owned 100 shares and this is always where I like to think about investing as the best way to make money if you are a little bit lazy as well Because what's happening is that you have invested in Apple you are at home you might be watching Netflix with your family you are actually spending time on the things you enjoy doing and people at Apple have hired the best talent in the entire world to work so much to be able to get the best results possible and then you benefit from that so it's always a sort of cheeky way to look at investing as you're benefiting from some of the world's best talent without actually necessary needing to contribute when it comes to growth the graph that I really want you to remember we have already looked at once it is the performance of the S&P 500 or Just a general performance of the stock exchanges a lot of  people when they start investing what they are going to do is ok I need to find the winning company I need to find the one that's going to do well and then they go online and they get overwhelmed Because there's hundreds of Thousands of companies that you can purchase how do you figure out which one is going to do well it's impossible and So what I want to share with you today is forget to that is not the right strategy  what you want to be doing is investing in the growth of the economy Because what we’ve seen in the past is the economy overall seems to be continuously growing it moves in periods of boom and Bust boom and Bust boom and Bust but overall it goes up so we had some pretty big crisis we’ve had the dot-com bubble we have had the great financial crisis we have had the covid crisis and every time you see the newspaper headlines the world is going under the economy is shattering but when you look at the graph of the 500 biggest US. company is actually what you can see is yes it goes down but overall its trending upwards the whole time so if you Just invest in the economy i.e. you invest in the 500 biggest companies without picking a winner this is the way your money will be doing as well so this beings US to the second point which is dividends dividends are essentially a thank you form the companies that you invest in they are saying you are an investor thank you for believing in US thank you for your loyalty we’ve made a bit of money last quarter so we are going to give some to you essentially and so it's essentially Just their sharing the profits that they've made with you but they don't need to do it so often times dividend payments come at the cost of growth Because if I have company I can decide maybe I’ll open a new factory and I will need all the profits I have made to do that or I can give the profit to my shareholders Obviously as a shareholder you want the profit but at the same time not opening a factory they are not growing as much so dividends and growth tend to be on opposing sides of the scale and also dividends there's absolutely no law on how much they need to give you they decide in a board meeting this quarter we are going to give this much and then next quarter it can be completely different so it’s really Just a thank you note I am going to Pause here for a second as this is the most important part of the entire presentation and I want everyone to be super focused for this piece there is something called compound interest and compound interest is what Einstein called the eighth wonder of the world and he's a pretty smart man so we're going to take his word for it and compound interest is why when you are investing you are seeing your money growing like this exponentially and not in a flat way like this actually so why is it that growth becomes quicker and quicker and the way in which compound interest works I am going to play it in two ways the first one is going with this example and the other one is going to be with another example so bear with me first example Well let's look at it over four years you have £10,000 and it grows by 10% every year it grows by 10% it doesn't grow by more Just 10% what you can see is that from you year one to year two you are receiving £1000 that's how much it's grown by but year 2 to year three you've received £1100 it's more than 1000 Because you have more to do the 10% growth on same thing happens year three to year four you receive even more than the Previous year and that's Because maybe it's Just growing by 10% but 10% of 13000 is a lot more than 10% of 10,000 so your money is growing exponentially what it means is that the steps that you're taking here are becoming steeper and steeper and steeper and your money is growing quicker and quicker now let’s look at an example of an 8% growth over 50 years so 8% remember I said that was more or less average when it comes to investing now £10,000 if they grow by 8% every single year for 50 years without ever adding anything else to it so it's Just £10,000 becomes over half a million and that's Because 10% sorry 8% year after year is bigger and bigger and bigger and bigger and so this here this is the power of investing you need time for it to come into consideration and you need to not take your money out when the market might be going down so it really is Just a long term commitment and I think when a lot of people see this graph they get a little bit scared Because 50 years it might not be what you have before retirement anymore what I would say is in 11 years your money doubles here at least and that’s already a huge huge jump from just keeping it in potentially a savings account this is if it grows by 8% of course which we can't guarantee but also this is one of the most powerful ways that you could potentially build intergenerational wealth if you invested £10,000 on behalf of one of your children they definitely have 50 years and so you're almost sorting out their retirement fund by being able to commit this during their childhood so it's a way of thinking also in the long term and what you can give back to the next generation this brings US to the first golden rule we've also already covered this which is invest for the long term and the reason why you want to invest for the long term you should already know this by now but the first one is compound interest takes years to build we’ve seen this this exponential growth means that the longer your money is invested the Higher Your potential returns which means just keep take this as a sliding door moment don't postpone investing by another 10 years you will be biting your fingernails I think that's an expression by not have started earlier time is really your strongest asset when it comes to investing and then the second one is because we've seen that the market moves in periods of up and down and so if you stay invested for a long time there's a higher chance that it will go upwards overall and that you won't invest and then just take your money out when there's a recession so that's two reasons why you need to think of it in the long term when it comes to investing another huge mistake that I see people make is they go to the pub but here's some friends talking about something and then they go back home and do the same we all have different goals we all have different risk taking enjoyments we all have different amount of savings and so actually we all need a investment strategy that is in line with US so for example something that is very important to me is to have ethical investments that might not be important to my aunt and so its really important to think what is my own investment strategy and to build this investment strategy you essentially want to find out what is going to be your asset allocation how are you going to decide this is the money I am going to invest where am I going to put the different pieces of the pie you can think of asset allocation of Just cutting up the pie of your money and deciding where to put the different pieces and if you go and see a wealth manager what will happen is they will give you a questionnaire to figure out what type of investor you might and then they're going to give you an asset allocation as a result of that questionnaire so they're trying to figure out who are you and then based on this they are going to give you strategy now Obviously we don't have time to do this as a big exercise with everyone what this quiz might be but I've broken it down and we can go into a bit more of a playful way with five questions and the five questions are going to cover the five areas that a wealth manager would look at So what is your financial situation the more money you have the higher earnings and the more stability you have the more risk you can take what is your investment proficiency how familiar are you with investing the more familiar you are the more risk you can take investment horizon how long are you planning to invest your money the longer you're planning to invest it for the more risk you can take what is your risk appetite so are you someone that really thinks it gains all the times you prefer making more money and you don't care so much about the loses or you someone that's really Anxious about potentially losing a bit of money it's Just a personal question here the more the risk taking enjoy the more risk you can obvioUSly take and then the last one is behaviour how easily are you influenced by others others also count as the news headlines if you see the news saying that we're going into a huge procession are you going to go into panic go into your investment app and sell everything if that's you then you really want to stick to a lower risk investment strategy if you're someone that can kind of like cut out the noise and Just stay in your own idea of what is right then you might be able to take a bit more risk but it’s really Just about assessing where you fall so we will do a little quiz here we will do a little poll I’m going to ask everyone to either take their phones out take a little piece of pen and paper or Just write it down on your laptop where we're doing this call it's 5 questions and you're going to keep track of your points so if you answer “A” you give yourself 2 point if answer “B”you give yourself no points and if you answer “C” you retract 2 points so you do -2 points what's really important here there's no right or wrong this isn't better than this I'm trying to put you into different categories which is why we're doing the points but having more points is by no means better than having less points so first one how do you feel about the current market? A optimistic B Confused or C terrified how long do you plan to invest for? is it 10 years or more is it 5 to 10 years or is it less than five years what state are you finances in generally? do you have a plump Cushion of savings do you have Just enough for an emergency or are you spending a little bit too much at the moment what kind of return do you want to get? so before you read the answers Just let me remind you in a savings account you might be getting around 3% and when you invest you typically get around 8% Obviously none of this is guaranteed so “A” do you want 10 to 20% return so that's a lot that means that you are comfortable that in a given year it might drop by 50% it doesn’t mean that you're comfortable with losing 50% of your money it Just means that if you're investing for 15 years there might be here is where it drops quite a bit are you OK with that then “ B”5-8% so this is more of a standard investment returns so you accept a 10% loss in a given year or “C” stable 1-2-3-4% at the moment return Choose £1000 in cash or the chance to gamble it for a potential £100000 “A” I want the 100K go big or go home “B” can I bet half of it “C” 1k please and thanks I am happy with that and now I am going to ask you to add your points together remember there were 5 questions so there 5 points to add together and to enter into the polls and then we can kind of see anonymously of course so we can see where we all fall and what type of investors we are and ill share the results on the next slide  ill Just give it a bit of time so that everyone can have time to respond. Its cheeky Because I can see the answers already on the other side so I know how its falling before you do, ok I can see that I have about 100 responses that are still missing so I will give it another 10 seconds, ok, so, I am going to share the results now. What we can see is that we have 5% that are under 0 and if we go into the next slide, you can move the poll box to the side a little bit if it is covering the text you so anyone that has less than zero you fall into the category of our Ed Sheeran’s or the conservative investors you know what works you don't like to take risks you Just want to stick to it and so when it comes to money what that means is that your priority is to essentially to safeguard your current money you're more worried about making sure that doesn't go away then about growing it a lot it might mean that you’re closer to retirement it might mean that you need to Use your money sooner rather than later and So what it means for your asset allocation that you’re going to have a lot more safe assets safe and bonds are also a lot safer than stocks and shares and you will only have have about 20% of your overall pie in actual stocks and shares now we have 65% so are balanced you are the Shakira investors which means you care both about growth and preservation you're kind of in the middle ground so that means you're going to want to take a little bit more risk than the conservatives but not too much so you are going to have a cash a little bit still remember essentially your emergency fund more or less 5% and then you're going to have 30% of bonds which is a little bit more still but 65% will be in stocks and shares. And then the last one  and the last one I think we have how many of you do we have we have about 70 people 28%  are our lady gaga’s the aggressive investors I’m also one of those you might be investing for the long term you may have a really risky appetite you Just want to go for growth, growth at all costs I want to get my money growing bigger and that means you need to take more risk and so 90% of your assets will be in stocks and you will only have 5% in cash that’s again your emergency fund and 5% in bonds. Now I'm going to stop sharing the poll results I Just want to make sure that you are super clear this was a 5 question quiz please don’t base your investment decisions on this it’s Just to give you an idea of what actually happens and how we make sure to find where you fall and actually Santander has a financial quiz that you can take with a digital advisor we will talk about it more at the end that can support you actually in going through that quiz and figuring out where you fall and what is best for you. So, we need to go into our second golden rule we have seen you have cash you have bonds you have shares don't invest in one thing only make sure you diversify your investment it is a really really important rule essentially you Just do not want to put all of your eggs in one basket if I had invested all of my money in an travelling company at the beginning of COVID I would have lost everything had i invested it in the 500 US  biggest companies and a bit of cash and  some bonds actually I would have been fine. The travel company could have gone bankrupt, and I probably would not even have noticed it. So, make sure that you spread out your investments and when you diversify there is essentially four ways you can do it. The first one is asset class so we have already talked about this, have some cash have some shares have some bonds maybe if you can afford it have some property. You can diversify by geography so you can invest in the S&P 500 that is the US you can invest in the FTSE 100 that’s the UK you can invest in Asia Just making sure you don’t rely on 1 country. Then there’s Industry, so making sure you don’t invest all of your money in tech but make sure that you purchase energy, tech, healthcare, retail, all of that. And then the last one is by company size, you can invest in companies that have different sizes so like   start-ups all the way to biggest companies, making sure that you get a bit of variety and I think the first thing that you’re thinking when you see this slide is that I Just don’t have time to do all of this how do I do it and this is where funds come in funds are a basket of investments essentially when you purchase a fund, you purchase one thing, but in reality you’re purchasing a huge shopping trolley of things and so in this fund you will have lots of different companies for example, you will have lots of different sectors, you can see here on the left, we have a fund and what it means is that there is a 1218 companies in side of it you’ve got energy, tech, healthcare, financial, industrials. Telecoms, consumer staples as opposed to Just buying Apple. One company. If Apple performs badly, you are in a tricky situation whereas if you have the fund, ideally you are exposed to a wider range of growth opportunities. So, if the economy grows your fund is going to grow as well and so Obviously there are funds that track the S&P 500 so instead of buying the 500 biggest US companies you can buy a fund which has the 500 biggest US companies. So, it is Just an easy way of diversifying your investments. Which brings US to the very last piece how can you legally shield your investments from the tax man if you are living in the UK you have something which everyone in the world is Jealous of it is something that's called an ISA which is an individual savings account and essentially the UK government is giving you tax free capital gains this does not exist in other countries it's insane as a foreigner it's insane as a concept what you can do is you can open a stocks and shares ISA for example it's Just an account type and then if you invest through the stocks and shares ISA you will never pay any tax on that money ever and you're allowed to in to invest up to £20,000 every single year so if you don't do it in a given year you lose that allowance and it starts back from zero but you can do this and you can open one with a lot of banks and a lot of investment platforms have this and so it Just means that you can invest without ever being taxed then there's something that's called the lifetime ISA which is also a tax free system but it's a little bit different a lifetime ISA you open the account an actually you can only retrieve the money when you want to purchase a home or if you're about to retire but you get £1 free for every £4s that you contribute from the UK government so it's tax free and you get 25% Plus as a gift from the UK government the Max contributions are £4000 per year and so the idea here is they want to help you buy a first home and they want to help you save up for retirement so make sure that you check out what the different ISAs are Because if you're going to start investing don't do it in a way where you are going to pay a lot of taxes when it's a way to do it text free and we're going to close before going into the Santander specifics with this graph again Because I promised that we would you now look at it and hopefully you understand everything. In 1974, if you invested £10,000 in a fund we now know what that is that tracks the S&P 500 we now know what that is Using a stocks and shares ISA in 2024 you could retire with 335,000 pounds 700 something without paying any tax now we opened by saying you would know how to do this by the end of the call I hope that this has been clear enough that you feel confident to be able to replicate this for the future I'm not endorsing investing in the S&P 500 at all this is Just an example you have a lot of different things you can invest in but Just look back at something from the past this would have led to these results and so if during this call you are most likely a Santander Customer and the first question that's going to come up is what is the first step I need to do and the first step is you need to open an investment account and opening an investment account with Santander actually has some pros and some cons well, a lot of pros what you can see is that you can open both stocks and share ISA and a regular investment account so you can have both the tax free and the normal 1 you can get started with anything so £20 per month or £100 lump sum you don't need to have £10,000 you don't need to be rich to get started investing you can get started with something really really really small and actually if we look back at this graph if you’d invested £1000 you would still have £33,000 if you'd invested £100 you would still have what was it 1-2 you would still have £3000 so it works with any amount that you Used Just make sure that you get started and then it also means that you can see all of your money in one place and you can actually manage investments from your app directly so from your phone we can't do is you could not pick out individual shares you pick out Apple for example individual shares you can't pick out Apple for example the only thing you can pick out for example is funds but we've seen that this is probably the easiest way to get started and then when you open the account there's 2 routes that you can go first one is digital advisor this means that you actually get someone to, well not someone, a robot, lets put it that way to support you on investment journey you only pay £20 and you're going to get an entire personalised recommendation on what you might be interested in investing so in the same way that we've done the quiz at the beginning to see what things you fall into this digital advisor route allows you to essentially get a personalised recommendation from Santander and it's limited Because there's four funds that they pick from in terms of what they think is best for you or you could say actually I want to go to the DIY route I want to be totally flexible I wanna invest in whatever I think is the best thing you'll have a bit lower fees but the only problem is you won't have any guidance and it’s not necessarily easy and you're not sure they'll be diversified Because you might make some mistakes so I'm going to open up for questions here and try and cover as much as I can I might stop sharing my screen Just so that I can see the questions as I can’t see them at the moment, so if you want to take a photo of this screen this is the QR code to learn more about investing on Santander and this is to be able to open a stocks and shares ISA on Santander so if you want to take a quick photo of the screen and stop sharing so I can see the Q&A. ok, So I can see that there's lots of questions in here is it better to pay for mortgage as a priority before investing to reduce the interest being paid on that? so it really depends I'm sorry but a lot of my answer are going to be it depends it depends how big your mortgage interest rate is basically if your mortgage interest rate is really high you can get me to make sure that it's not essentially and leaky bucket that you have and then I would say you need to prioritise paying it off you know typically mortgage interest rates are not that high though you might make more by investing then you would paying off the mortgage so I said make 9% returns investing and you have a 6% mortgage you’d be making more money investing and Using that money to pay off the mortgage so it really depends where your mortgage interest rate lies so I'm looking I'm going to go down  so I can start there are so many questions coming in, there seems to be very little interest between a cash ISA and a stocks and shares ISA Why is stocks and shares ISA worth it?  OK ISAs you have different types you have a cash ISA and your stocks and shares ISA a cash ISA means that you Just don't pay any tax on the interest that you might make from the cash account so if you make 4% on their savings paying interest on that now realistically unless you have a lot of money in savings you probably won't be paying tax on that anyways so it's not that interesting a stocks and shares ISA the other hand you won't be paying any tax on all of your future dividends and capital gains which might be a lot higher than 2/3% so if you're investing in definitely something to consider. What ethical funds can you recommend? I cannot recommend to any ethical funds I am not allowed to do this, but you will be able to find solutions on Santander. do you have to make a monthly contribution to benefit from an investment can you instead Just invest £1000 for the long term five years and still have a lot of benefits? yes absolutely so when it comes to investing this two strategies actually the results from the 2 strategies is pretty much on par so one strategy is called pound cost averaging again fancy word all that means is I'm investing regularly and the idea with this is if I invest £200 every month I might be able to average out and miss out on the days where Its really good or really bad it kind of Just like smooth out variations but there's also people that say longer your money is in the market the better so if you have money invest it all Because actually the earlier the better you'll find papers that claim both strategies are the winning strategies which to me Just means that there's not a clear winner so yes you can both invest regularly and invest all in one go probably wouldn't do is invest everything like if you let's say you have an inheritance of like £20,000  I wouldn’t invest all of the on one day Because you might get it on a bad day so maybe spread it out over a few weeks a few months or something in little chunks so you don’t have to invest every month for 15 years for it to work.  Can I have a cash ISA and stocks and shares ISA to 20K in each every year? no you get £20,000 for all of your ISAs so if you have a cash and stocks and shares you can do 10, Thousand 10 Thousand 5 thoUSand15 Thousand if you also have a lifetime ISA make sure that it's sort of 4 Thousand 10 Thousand 6 Thousand basically 20,000 overall. with the Santander investment hub have how many different funds can you choose? there is a lot of funds on there so if you go down the digital the digital advisor group, sorry digital advisers right you will have it will pick out from four funds but if you go down the DIY roots there is or lot of solutions on that I AM 50 years old I haven't invested in stocks and shares and would like to start with retirement age extending all the time what can I have in place now to potentially have something to look forward to but by the time I 70/75? so let's take the example of 50 to 70 or 75 you actually have 20 or 25 years which is a huge time window when it comes to investing what you could look at is a graph of what has happened to the S&P 500 in Just the last 10 years and I think you'll be very surprised by how much it's growing how quickly it's grown so I definitely wouldn't be discouraged from the fact that you are 50 years old there's actually quite a lot of time in front of you the idea is Just it's better to start now then never where I would get quite wary is if you told me I want to retire in three years I want to invest for only three years Because then it's a bit risky like if there if the economy goes down you don't want to Just hit that if it's 20 or 25 years yeah it's huge timeframe. OK I can see that there's a question about seeing the QR codes again if it's OK with you I'll share them Just at the end of the call again so I'll keep it on for a minute at the end Just so I can see the questions .when do you know when to cash in on investments? yes so the idea when it comes to taking your money out of investing there's a few different ways that you can do it the first one is you could start by paying yourself the dividends out so when you invest in your on the younger side it's often recommended to not take the dividends out so to Just it automatically reinvest them Because you'll see that with that money reinvested it grows bigger and bigger and bigger and then towards the age of retirement you can start taking the dividends out so you'll get the dividend payments that will already be get a chunk of money and then you can Just decide to take some money out month after month after month as you need it so oftentimes it's not necessarily recommended to say I'm 63 I'm retiring and selling all of my investments Because you might be live to 90 and that could be another 30 years invested but Just to tighten it take it out gradually as you need it. do I need to pay for capital gains tax for the capital gain I earn from buying and selling stock Using an investment ISA I know I don't need to pay for interests but not sure about the capital gain principle? yes so it's free of tax for a capital gains and dividends so I Use the word interest when I talk about growth but really it is capital gains so it is completely tax free under all circumstances when you invest through a stocks and shares ISA unless you move overseas then it’s a bit different.  my child is 16 I have 30K in the savings account I know the money is not working for them there, but I'm Confused what I should do for them what are the options for good growth for when they reach old age to have a nice nest egg? I mean first of all you have 30k in a savings account for your 16 year old child that is in in insane amazing I'm so happy for you what I would look at here is a junior ISA so you can actually open an investment account for your children the Max allowance is £9000 per year I believe and that means that you can invest on behalf of your children without them paying tax later on and I mean if your child is 16 what it means is that the investment horizon is so long they might have 30 years 40 years for that money to be invested which means you can take a bit more risk so I wouldn't put too much into like bonds and cash but I would to consider having actually a lot of it invested in the stock market and Obviously I can't tell you what to invest in but stick to what we've covered which is a very well diversified portfolio so funds that have lots of different companies in them. so, what happens to your lifetime ISA if you die before retirement? that is a really good question I believe it Just goes and gets passed down as inheritance. how do you redeem your investment when you want to spend it and can leave some and take some? so when it comes to investing when you purchase a share you do it with your investment account this could be Santander and you say hey I want to purchase 10 shares of this fund and so that means that you're Using the money that you have in your bank account to buy shares when you want to redeem your investment what you're saying is I want to sell 10 shares and that's going to go back into cash it's very simple it's Just an online transaction so you're buying a share and then you're selling it and it's not like you need to wait for a seller to come up and to want to buy it off you it all happens within seconds. you are speaking often of the SNP 500 is that a better return than the FTSE 100? yes historically speaking yes so the US is I mean so far has Just been particularly good at growing they have better tax situations they have more funds so yeah I don't recommend it but it has been growing quicker. Sorry I heard a voice coming in. I'll share the QR code again, was that someone coming in with a voice I believe this is the end of the webinar, I can’t hear it anymore so am going to assume it is. so we have reached the end of our time together I'm sorry if I haven’t been able to answer all of the questions but you will be able to learn a lot more about the topic of investing by scanning this QR code Santander has some amazing resources left right and centre and I've worked with a lot of banks and I have to say Santander really takes caring for their Customers very Seriously so they will be able to guide you through the entire process hopefully. thank you so much for today it has been fantastic to have this hour with you and I hope that you have more questions answered then you have new questions.