How to get started with 80-20 Investor – A walkthrough
In this walkthrough I show you how to get started with investing using 80-20 Investor, even if you've never invested before. Follow the simple steps below and you can start using 80-20 Investor to help manage your investments in minutes.
Step 1 - Understand what investment funds are
80-20 Investor provides information that empowers you to make your own investment decisions. It provides research and fund shortlists for unit trusts, investment trusts and ETFs. If you are unsure what funds are then read this this excellent short guide which tells you everything you need to know.
Step 2 - Decide if you want to invest via a Stocks and Shares ISA or a SIPP
As 80-20 Investor's process is based upon periodically reviewing your portfolio and making changes it is best that your money is invested within a tax-efficient structure. Any investments made within a Stocks and Shares ISA or a Self Invested Personal Pension (SIPP) are free from capital gains tax and income tax, even when you make changes and crystallise profits.
Whether you decide upon an ISA or a SIPP will depend on which suits your circumstances. To sum up:
- Stock & Shares ISA - investments and profits with an ISA are tax free. You can cash in your investments at any time. You can pay in £15,240 during the 2016/17 tax year and £20,000 during the 2017/18 tax year.
- SIPP - your contributions into a SIPP receive tax relief meaning that the taxman adds an additional 20% to the contributions of basic rate tax payers. All profits made within a SIPP are tax free. However, you can not access your money until you are aged 55 and you are liable to taxation when you do so. The maximum you can invest into a SIPP during a tax year is the greater of £3,600 or 100% of your earnings with a £40,000 annual cap. This limit is reduced to £10,000 if you have already started drawing a pension.
By way of example, my own £50,000 is invested via a Stocks and Shares ISA, having built the fund up over time.
Step 3 - Choose an Investment Platform
80-20 Investor provides research and shortlists on unit trusts, investment trusts and ETFs. All 80-20 Investor members buy the actual investment funds themselves via a fund platform, also known as a fund supermarket. Like a real-life supermarket, a fund supermarket simply allows you to purchase the products you want, in this case funds, and keep tabs on them.
There are over 21 fund platforms out there to choose from. When picking the best investment platform for you you need to choose one that is not only good value for money but also provides the services you value (such as customer service phone lines and smartphone apps). Here I provide a full comparison of the The best stocks and shares investment ISAs (& the cheapest fund platform). However the two leading platforms used by 80-20 Investors are:
Most Popular platform among 80-20 Investor members
- Hargreaves Lansdown has one of the largest selections of funds out of all the investment fund platforms and is the market leader. It has won numerous industry awards including the best all round investment platform. It is well-renowned for its customer service and has an excellent website and smartphone app. Not the absolute cheapest platform but perhaps the best value.
The platform I use to run my £50,000 portfolio
- For legacy reasons my live £50,000 80-20 Investor portfolio is run using Fidelity International. Perhaps not as slick as Hargreaves Lansdown but it has a good range of unit trust investments (although if you want to invest in investment trusts and ETFs then Hargreaves Lansdown would definitely be the better choice).
Once you have picked your platform then simply follow the instructions, once you've clicked through, on how to open an account. You will need to make sure you know your National Insurance number before you start and have your bank details to make a payment of your initial investment amount.
You do not have to choose your investment funds straight away as you can choose to keep the money held in a cash account at first. Once you have started your 80-20 Investor membership and made your investment choices you can then log into your chosen fund platform and allocate your money accordingly.
Step 4 - Start your 80-20 Investor membership & free 30 day trial
- Now simply click through to the Become an 80-20 Investor page
- Click the 'Start a free trial today' button
- Choose a plan - the annual plan is our most popular because it equates to just £17 a month plus you receive a 30 day money back guarantee on top of the 30 free trial. That means that you can, in effect, try 80-20 Investor for free for 60 days (if you invoked your 30 day money back guarantee at the end of the period). The same is true for the two year plan.
- Then you will be asked for a username and password and prompted to checkout using paypal. The reason we use paypal is because of its level of security and because it enables you to use a debit or credit card without having to deposit money with paypal or pass your card details on to us.
Signing up takes seconds and once completed you can enjoy the full benefits of 80-20 Investor. During your free trial of 80-20 Investor you will receive a series of emails designed to help you get the most out of the service.