The fastest way to work out what it is that I don’t know is to forge ahead with a plan until I hit the first hurdle of whatever missing information is required to proceed.
The alternative is to waste a lot of time guessing what it is that I’ll need to know to complete a project, but currently don’t.
Sometimes this isn’t an issue. I don’t need to attempt to book a holiday in order to know there’s no point until I know what dates I can take off work and where it is I want to go. OBVIOUSLY.
But sometimes, it’s not until I get going that I discover what it is I’ll need to find out. That’s what happened this week when I tried to invest £1,500.
Sunday last I was getting a lift through the West of Ireland from Galway to Knock airport in Mayo. The person driving started chatting to me about Counting Zeros and one topic led to another until I mentioned this week’s assignment, to which my driver asked whether I’d heard of Kickstarters? I hadn’t! But I already had a strong notion that the investment I would make this week would be in Seedrs and after a little digging when I got back home, I discovered that they’re one and the same; the latter the UK outpost.
Kickstarts/Seedrs is a clever way of allowing mere mortals to become angel investors in start-up businesses. I’ve come to understand through my homework assignments so far this year, that stock (certain types) and start-up’s are the two highest risk/greatest potential investment options. If anyone out there wants to re-educate me, please do.
I’m not sure I’m allowed to play the stockmarket*, so I’d decided to place my £1,500 with a start-up or to be more precise, across a portfolio of them, which is exactly what Seedrs allows us to do.
Signing up to Seedrs was a breeze, all I had to do was enter basic personal information and then pass a 7 question test — one designed to double check that I properly understood that most start-up’s fail and when they do investors lose their money and other reality-checks about how the whole angel investment thing works.
But it was only when I’d created a log-in, got the authentication email, passed the test and started to browse the start-up’s seeking investment that I understood what it is that I do not know.
I do not know how much money I could stand to gain from any investment I might make or whether this is even know-able?
I don’t know what some of the terms mean — if one is offering 30% equity and another 5% I think I know what that means for them, but what it does it mean for me? And finally, I have to say I wasn’t overly excited with the 20-30 start-up’s on offer … which made me stop and twitch. By what criteria should I make my selection? Should I choose the music app idea over the financial services one because other investors seemed excited about the app? I know almost nothing about most of the industries represented. As a consumer, there’s a few of them that I’d personally like to see take off, but mostly I could care less about what I was flicking through. How much should that influence my decision, if at all?
So until I research some of these questions, I’ve chickened out of throwing my £1,500 down on the table. I’ve created my account and entered the amount I plan to transfer from my bank account but I have yet to do that. I have time to sleep on it.
If you can’t help me with advice, you can help me by following my blog 🙂 …. just enter your email address at the upper right hand corner of the site. Muchas Gracias, Merci Beaucoup, Go Raibth Maith Agat.
For the difference between savings and investments, here’s a good summary. In a nutshell, savings need to be liquid — so that we can access our money when we need it. Investments tie up money for longer in the hope that the money will grow. The most important thing to remember about investments is that the money can be lost, so it’s smart to spread the risk by relying on a mix of products — some of which should be relatively boring and safe. On top of this, it’s insane to invest all the money you have (unless you really can afford to lose it all). Seedrs, for example, asks users to pledge that the minimum of £1,000 required to become a Seedrs investor is no more than 20% of the total amount of money available to you.
*As far as I understand BIF company policy I am not allowed to invest in any stocks belonging to clients we serve. And we serve a very long list of clients, so perhaps it’s best not to mess around with individual stocks. That’s been my thinking to date.