“How do I get started?” is probably one of those questions that gets left unanswered for one reason or another year after year and most likely with a heavy dose of regret. You are fully aware that taking control of your finances and understanding how to invest your money is the solution long-term particularly as you get older and start thinking about your pension and your retirement years.

You may have also identified investing as a possible solution to being in a position to retire much earlier and there is no doubt it will get you there. With the right processes in place, you will simply be blown away with what you can achieve over 5 to 10 years. The stuff of dreams can very much be your reality if you start smart, stay consistent and remain resilient.

The best processes are simple to learn but staying consistent year in year out is the challenge and how many fall short of their goals.

So let’s break down the financial education you need into 5 steps for you to be able to start off strong and remain strong throughout your lifetime as an investor.

Step 1 – Have a financially sound foundation to start from

Money cannot be plucked out of thin air, no matter how much the misleading and

unscrupulous splattered all over the internet try to convince you otherwise. If you don’t have money to invest, you won’t make money. It really is as simple as that.

The strength of investing is to totally remove the banking system and underperforming funds and instead, allow you to compound your salary and savings to far greater returns.

In order to do this, you need to have the right starting amount and you want to be in a position to add more money to your savings pot on a monthly basis. Ultimately, the more you have the more you can invest and see returns on and this means the quicker and larger the compound growth process will be. I recommend a minimum of £10 000 to get started and I will break this down in more detail in the next step.

So first and foremost, ensure you have a financially sound foundation to start from and this will mean getting a financial plan together. Do not underestimate the importance of this and how this will change your progress and productivity with a well thought out financial plan in place. Once you have completed this, it may require you to then hold off starting investing and instead focus your attention on finding a job that pays a better salary.

It will also force you to rethink and rework your outgoings to allow you to save more. Often people have a spending problem and not a money problem and so a shift in priorities is highly recommended.

As I often tell people, do not be afraid to live a few years like you do not want to live so you can then spend the rest of your life as you do. Sacrifices are essential for the greater good.

You may also want to prioritise clearing off any debt that you may have. If you are struggling with this and the interest you are paying then call up your creditors and get on a debt management programme. Ultimately, it is essential to:

• Stop the compound interest working against you.

• Get onto a debt management plan that works for you.

• Clear your debt as much as possible.

• Start saving money.

• Start investing money.

• Get the compound effect working for you.

As you can see, you need to reverse the whole compound effect from working against you to working in your favour and you need to start NOW. There are charities you can call to help you with this or you can call your creditors directly and engage them in conversation. Don’t suffer in silence, instead act and take advantage of the options available to you to get this under control.

Of course, there is good debt and bad debt and sometimes investing first and compounding the pot of money you have saved and your salary may be a better solution to paying off debt in the medium to long-term as long as your debts are well-managed. You are likely to pay off the debt quicker which will allow you to progress earlier.

Step 2 – Think like an investor from the get-go

Now that you have the right pot of money to get started, the key is to think like an investor from the very start and that means treating this new venture of yours as a business. Do not lose sight of your long-term goal in search of instant gratification and certainly do not allow others to derail you with their unfounded promises of quick riches.

You will need to brush up on certain aspects of your financial literacy to warrant having an “investor” title and this will almost certainly mean investing in a good course or two as well as the right tools for the job, such as a charting package, that are essential for finding good investment opportunities from the comfort of your home. All career choices have a learning phase as well as specialised tools to deliver results and this venture will certainly be no different.

Do not be like many newbie investors who approach this with a cheap mindset and try to build a life-changing investment portfolio pretty much for free with whatever information they can find on the internet, in free forums, at free seminars or in cheap books.

These all have their place in the early stages of learning but you will certainly need to step up and invest in the right course and the right tools once you are ready to get involved.

Also, do not allow yourself to fall prey to marketers-dressed-as-traders who seem to think “simple” and “easy” are synonyms, they are not. As already touched upon, the best techniques are simple but extracting profit consistently year in year out is far from easy.

Many of these scammers will paint a pretty picture of how you only need to make “a few pips a day” in just “a few minutes a day” and then try and sell you courses of varying prices to achieve retirement by the end of the month. If you have your “I’m an investor” hat on at all times, then these pitches will instantly have alarm bells ringing.

Fortunately, it is not too difficult to know how credible these individuals are if you stop for a moment to really focus on what they are saying as opposed to how they are selling it to you. You just need to ask the following 3 questions to know if you are dealing with the right person or not:

1. Do you have a FULL year (maybe 2) of verified history from a live broker account to prove your results?

2. Can I have a breakdown of the toolkit that you have created?

3. And will I be given access to this as part of your course?

If these cannot be answered credibly, then it is almost certainly quackery you are actually dealing with and you want to walk away. It is not too difficult to spot a fake if you always stay true to your long-term plan as opposed to being blinded by the short-term promises they offer but will not deliver on.

Step 3 – Setup tax-free environments to use as your investment vehicles

The days of investing being a playground only for the wealthy are long gone. Not only is the modern-day space a level playground but, depending where you live, it also offers a variety of ways to invest your money with your returns being free of capital gains tax. It would be a huge mistake not to take advantage of these. The 4 main options you have available to you are:

• Spread betting accounts

• SIPPs (Self-Invested Personal Pension)

• (N)ISAs (Individual Savings Account)

• SSASs (Small Self-Administered Scheme)

As someone who has been using spread betting accounts since I started my own personal journey, I would always recommend them as the perfect place to start for the reasons I cover below. It is without a doubt one of the most powerful ways of making money investing in the financial markets and we are extremely lucky to have access to them here in the UK.

The important thing to note is that not all brokers are the same. We go into more detail on what makes a good broker and how to choose one based on what you want to invest in and, crucially, your starting amount in our pdf 9 Questions to Help you Choose the Right Broker.

As mentioned in step 1, I recommend around £10,000 to get started and this is because you need the right starting amount in the right broker account to manage your risk properly. Brokers will happily allow you to and encourage you to open an account with “as little as £50” but this can and will be instantly lost.

As I have been trying to drill home and will continue to do so throughout the rest of this article as well as throughout all our blogs and content, you must think like an investor at all times. With broker accounts, that means starting with the right amount in the right broker (because, as mentioned, ultimately not all brokers are the same) to ensure you NEVER blow an account. For some brokers, a suitable starting amount is £2,000, while others £5,000 is needed and in others a lot more is needed.

Small and controlled losses are part and parcel of good investing but blowing accounts and feeling the pain and disappointment that comes with that does not have to be. Ignore the gurus who preach otherwise. It’s quackery. You have worked hard to earn and save that money so you need an approach that protects that at all times.

Now moving on, I am going to assume that the ego of owning a stock is not your priority here, however, making money is. Spread betting accounts allow you to do just that. They allow you to have exposure to an instrument without actually owning the underlying asset.

Price movement is measured in either pips (forex) or points (stocks and commodities) and where you can then allocate a value in pounds and/or pence to each pip or point. You then speculate on whether the market will move up or down and as a result, make or lose money depending on how much you have allocated per pip/point and the direction of the market. We go into a lot more detail in 9 Questions to Help you Choose the Right Broker but I will also be expanding on this in step 5.

Note: Let me take a moment here to say do NOT make the mistake of getting turned off by the negativity that surrounds spread betting accounts and official broker stats that suggest over 80% of users of spread betting accounts blow their accounts. Notice I use the word “users” because those who blow accounts have very little idea of what they are doing.

They are not competent investors or traders. These users are simply gambling and when you take on the house – or in this case – the market with little idea of what you are doing then you leave yourself wide open to being chewed up and spat out and let’s be frank, rightly so. Rewards that lead to a lifestyle change of complete control of money and time should be earned and not fluked. Ego very rarely gets rewarded in these cases.

Don’t let others project their greed, failures and fears onto you and let that dictate your own decisions. Unlike them, simply take your time getting educated and speaking to the right people to ensure you take full advantage of these life-changing opportunities open to you in exactly the right way.

So we can conclude that the 80% plus that are blowing accounts are doing so not because they are using a spread betting (which many incorrectly believe and hence become irrationally fearful of an extremely powerful wealth-creation vehicle) but how they are incorrectly using their broker account. The 80% plus are also blowing accounts not because of their ability (you all have it in you to become successful investors) but their approach, with greed as their primary driver. I expand on this further in the bullet points below.

Ultimately, we all have choices and it is essential that you make the choice of avoiding the herd mentality as you will end up part of these dismal statistics.

However, with your “I’m an investor” cap always on, what you should understand is that a spread betting account is a unique opportunity open to us all and an excellent route to market when used correctly. It offers: