When was the last time you considered your future self?
You may have clear goals for the next five to ten years, or perhaps you have a vague sense of where you want to be but are still piecing it together. Many of us are so caught up in day-to-day life that we rarely take the time to think about our long-term plans.
In our fast-paced world, short-term concerns dominate our schedules, making it challenging to focus on the next 10 or 20 years. When it comes to finances, immediate pressures often overshadow distant considerations.
However, your future self deserves attention and investment. Planning for the future doesn’t have to feel overwhelming. Investing can be a powerful way to prepare, allowing you to build wealth over time, which can ultimately provide flexibility when making significant life choices or pursuing your goals.
The great news is that with the help of a trusted wealth manager like Nutmeg, you can let your investments work for you while experts handle the management decisions needed to realize your financial aspirations.
If you’re already investing, consider contributing a little more each month to enhance your future financial flexibility, enabling you to achieve significant milestones sooner than you anticipated.
Investing comes with risks but offers numerous benefits, including protection against inflation, the potential for accelerated growth through compounding returns, and tax-free gains.
Make the most of these opportunities and invest in your future self today.
Why Invest?
Investing aims to grow your money over time.
While cash savings are necessary for emergencies and short-term needs, investing is crucial for maintaining the value of your money in the long run; the potential returns can outpace inflation.
Long-term investments are particularly effective over decades, while also serving as a strategy for building wealth to meet future needs. However, it’s vital to recognize that the value of your investments may fluctuate over time.
Investing can also facilitate tax-efficient growth. Interest earned or returns from Individual Savings Accounts (ISAs) are exempt from UK income tax and Capital Gains Tax (CGT), subject to annual allowances. There are several types of ISAs; for example, a Lifetime ISA can help you save for your first home, while a Stocks and Shares ISA offers more flexibility.
Each tax year, you can save or invest up to £20,000 in cash or stocks and shares ISAs, with a limit of £4,000 for a Lifetime ISA.
As the 2022/23 tax year closes soon, it’s important to be aware of key deadlines. If you’re considering opening an ISA or investing before the April 5 deadline, a member of our friendly team can assist you.
Is Now a Good Time to Invest?
In light of rising living costs, many are focusing on the short term, especially their finances. With interest rates at their highest in years, some individuals may feel inclined to save more in cash or overpay their mortgages rather than invest.
However, saving and investing don’t have to be mutually exclusive. They should work together as part of your financial strategy to benefit both your current and future selves. With emergency savings in place, investing a portion of your income—even as little as £50 to £100—can yield significant long-term benefits through compounding.
If market volatility concerns you, consider using our drip-feed feature, which allows you to secure your annual allowance and gradually invest over the coming months. This approach gives you the tax advantages of an ISA while easing your entry into the market.
Investing in a Prosperous Future
Everyone has different priorities regarding their short, medium, and long-term financial goals. Investing can help you lay the groundwork for your future, and it doesn’t have to be intimidating.
In fact, investing should be an empowering experience. At Nutmeg, we promote straightforward investing and provide tools to help you track your progress consistently. We are here to assist you in investing in your future self effectively.
Important Risk Considerations
As with any form of investment, your capital is at risk. The value of your portfolio may fluctuate, and you could receive less than your original investment. Tax treatment is dependent on your individual circumstances and may change in the future.