When Saving gets Boring

Photo by Burak Kebapci on Pexels.com

After a bit of practice, I finally managed to restrain my spendthrift habits and start saving. The trouble is that the quiet satisfaction that comes with building up some modest reserves for a rainy day diminishes somewhat when you realize that these funds are merely sitting safely in a bank account, earning very little interest. I decided that it needed to be made to work harder.  I could lock it away for a year or more, where the interest rate would be a little more advantageous but I wouldn’t be able to get at it, but that wouldn’t do. I want to keep my money close to hand. So I turned to investing it in stocks, where it hopefully it be able to grow while remaining available for use.

First, however, I decided to invest a little in precious metals, gold, silver and platinum. Not so much for the returns but because they are supposed to be a safe haven for investors in times of trouble and the traditional hedge against inflation. Moreover, there is something both reassuringly ‘old school’ and pleasingly anarchic about it that is quite appealing.  Gold, after all, once provided the basis for monetary systems around the world until it was usurped by fiat currency, which is subject to the meddling of governments and central banks. It still exists, however, as a store of value, available to be bought and sold, and  – seemingly – beyond the control of governments and central banks.

After a bit of research and a bit of googling, I alighted upon the ‘Digigold’ service offered by the Royal Mint which allows customers to buy tiny quantities of precious metals and store it in their vaults. I purchased 0.186 oz of gold, 5.395 oz of silver and 0.126 oz of platinum, and the value of my investments promptly…  dropped like a stone. All I’m still down about £30 – or about £6% –  on my original investment. Not a disaster – I wasn’t buying into precious metals primarily for an immediate return after all, but for the eventuality that its value might go up in the aftermath of a crisis –  but not quite what I had in mind either. The smart money was heading elsewhere. The stock market offers better returns on the one hand as do government bonds, and on the other, precious metals now face competition from cryptocurrencies as a guard against inflation.

I don’t intend to buy any more metals for the moment – not until there is a major change in the price which I can take advantage of – but I shall keep hold of what I’ve got – just so I keep my stake.

Next, I headed to the stock market. The Freetrade App allows users to buy and sell shares in listed companies, funds, REITs and ETFs as well as bonds and guilts, and to keep an eye on their value. It is as addictive as any social media feed. The difficulty is that this is my hard-earned money and that I don’t really know what I am doing, but after a bit research, a bit of googling, I settled on a strategy of leaning heavily on funds, which spread the risk over multiple assets, while taking a punt on a few companies that I think should offer a good return. I’ve gone predominantly for financial companies and mining companies, backed up by utilities, and a little bit of tech. I reinvest the dividends and top up my account to the tune of £50 a month.

It seems to be going reasonably well so far. The dividends are tiny, some as small as 2p, but they come quite regularly. I had a total of £2.36 come in last month. My portfolio is currently worth £16 more than what I put into it, but that includes a free share that I got when I opened the account. Its more than I could have got than if the money had been in a bank account over the same period, so the object of the exercise has been achieved but that’s not saying very much at the moment.

I’ve not been at it long enough to know the delightful glee that comes when the shares jump up in value as well as the doleful lament when they jump the other way. I’ve yet to see a crash, however, or a major correction but surely this will come sooner or later. Indeed, I’m paying more attention to the financial news now as I develop this new hobby and it seems that there is always a compelling reason to expect it sooner and so I have of course been careful not to invest more than I can afford to lose. Money in the bank is safe and secure, come what may, though it will likely, over time, loose its value. Money that has been invested by contrast is at risk, subject to the vicissitudes of the markets, or, one might say, to the “slings and arrows of outrageous fortune”. Far more exciting.


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