Simple Pound

Why I am doing this

April 1, 2007

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I have never written a blog before. In fact, I was always fairly unreliable at keeping journals, but this time I have a purpose… I am going to graduate in less than 3 months time and will be earning my first salary. And I think this is a pretty good reason for starting to think about money. There are many, many things I want in life - including material things that come at a cost. And don’t misunderstand me, I love luxury - I love fast cars, good restaurants, quality clothes and cosmetics. But I think it should be possible to afford all these with a little bit of planning and without going into debt.I’ve be using this blog for two purposes: Firstly, I want to keep track of what I’m learning and reading about elsewhere and bundle all this (for me) useful information in one place. And secondly, I want this blog to be my source of motivation where I can keep track of my (financial) goals and encourage myself not to indulge in impulse spending.

So what are my goals?

Pay back (some of) the money my parents lent me to finance my studies - unfortunately that also includes paying a rather large outstanding invoice for repairs on my mother’s car.
Fully fund my cash ISA for the tax year 2007/08 - the interest earned on that money is tax free and I don’t want waive free money (especially not when it comes from the government…). I intend to use this money only for long-term purposes. That ultimately includes retirement, but since I’m only 20 years old there will be a few other major expenses (property etc.) beforehand that I plan to cover as effortlessly as possible.
Accumulate an emergency fund of 3 months worth of expenses - as I am about to move to London, I don’t have much of an idea what amount of money I will need to put aside, but I will find out.
Build up a diversified portfolio of investment funds - at first, these will largely be index funds but I shall also look into mutual funds to aim for a little more aggressive growth. Following the saying “don’t lay all your eggs in one basket” I will try to diversify the portfolio not only by taking into account the funds’ objectives but also their location - starting off in the UK, I plan to diverge into European, American and international funds, maybe even test out emerging markets.
Gain experience with individual shares and other alternative investment possibilities - here I will start off with growth shares, on which I have just recently read a fantastic book called “The Zulu Principle” by Jim Slater. Even though it is more than 10 years old by now, I found it very enlightening and helpful - how helpful it will prove in practice shall be seen.

These goals are loosely ordered by both importance and amount of money involved. I will not jeopardise any money on the stock market until I have put enough aside to deal with potential losses. Once I start actively pursuing these goals I plan to put up a graph to track my progress - just like the guys at We’re in Debt did. I hope this will help remind me that I don’t really need that extra pair of shoes until I’ve secured all free money from the government…