I first started investing in university. The idea of growing my modest money without having to set up a business and supplementing paid work I was doing was very appealing. To this day that is what I am doing, working and dedicating as much of my money as I can into investments – mainly shares with high yields – so my ISA can grow and one day allow me to work for myself or to retire earlier than is normal. The driving force behind investing for me is the opportunity to be independent. And probably go skiing as well.
When I first started investing back in university, I often focused on making money as quickly as possible. The strategy was not very refined, although I was determined to research shares, both generally and individually, as best as I could. The first share purchase was of 250 Vodafone shares, costing me £450. A big risk given I was a student. And as evidence of my naivety at the time, I didn’t purchase the shares within an ISA, it would take a further six months to discover the opportunity provided by investing within an ISA. Evidence of perhaps how little research I did back then.
Anyway, I was hooked and bought a few other companies and more Vodafone shares. In the end, looking back, I lost £20 on my Vodafone investments which I’d held for three months. However, other investments fared better. I was confident with better insight, knowledge and research I could end up making money from investing. Perseverance is key! As is confidence.
It was that first dividend that really excited me. It was paid to me about six months after I first started investing. A whole £12.20 from Alliance Pharma.
Since then I’ve learnt a lot and am now convinced that income investing is a vitally important part of an investment strategy. I want to be holding my shares and investing for the next decade at least, and most likely for the rest of my life in some form or another.
In recent years, income investing has become the critical part of how I’ve decided to invest. I want companies with high yields, with wide barriers amongst upstart competitors and business models that are easy to understand and sustainable. This is why National Grid has been my largest holding for some time, it is a business that fits very well with my investing strategy. Other significant holdings include Legal & General, Persimmon, HSBC and the investment Trust, Merchant’s Trust.
Initially, I was prepared to pick individual shares myself and hold them within an ISA, using up as much of the allowance as I could afford. I learnt though that investing in funds – despite the repeated focus in the media on manager costs is a valuable way to diversify and improve returns. I find Hargreaves Lansdown a great platform for investing in funds. I now have funds in my ISA and SIPP.
My other ISA I had invested with SVS Securities. That company went into administration which was only resolved after fifteen months of my money being inaccessible. One regaining access to my money I had a portfolio of over £100,000. That has since dropped a bit as I bought a first house with a large deposit. I’m now in the process of rebuilding my ISAs and dripfeeding money into my SIPP as well with the intention of at least having the option to retire early if I want to. I’ve talked more about financial independence in this blog.
Now all my investments, which I can access and invest, are in Hargreaves Lansdown and AJ Bell. You can see more on my trade updates on this website, or these were my holdings at the end of May 2021.
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The Income Investor 