We are back to our regular schedule! And this year, I’m trying to blog even more than I did in 2021 – that’s 40ish times to beat. The other goal on the blog this year is to focus on building my monthly newsletter – a more “intimate” space to share everything I can’t here; you can sign up via the homepage.
It’s been a while since I wrote a personal finance post, and with it being a new year, with fresh goals and all that good stuff, I thought I would break down how I’m thinking about money management in 2022.
Somebody actually asked me the other day why it seems as though my generation (millennials/gen z) seem to just be so… serious. They were right. There is without a doubt an increased focus for my generation around “hustling” – that is, having multiple streams of income, investments, businesses, highly regarded jobs and then some. The term “financial freedom” is thrown out by many. Honestly, it can be exhausting trying feel as though you’re “keeping up”, whilst lamenting the idea of “hustle culture” at the same time.
I sometimes wonder if our parents felt many of these same pressures, or if the goal was to settle down, buy a nice house and live what some will refer to as a “ordinary” life. Personally, I think the big shift has been brought on by social media (I point the finger at social media for everything) – there are so many avenues these days that better balance a more fruitful income with a less stressful life. Pile on top of that the general social pressures brought on by us all sharing our lives more transparently and constantly feeling a need to prove ourselves, and you get a generation that doesn’t always know how to relax anymore. A generation where working to the point of burnout has become the norm.
There’s the good and the bad. There’s so much opportunity to learn a lot with all of this new information on your finger tips. At the same time, there’s the pressure to “make it”… whatever that really means. It can be a lot sometimes. I say all this to say that, as I delve into the different compartments of my “investments” this year below, it’s not to apply pressure or an exercise of “look at what I’m doing”, it’s more just to share my thoughts with anyone that could use some guidance around how to get better use out of their cash this year. So – let’s get into it!
This is not investment advice (I am not a professional).
Stocks and shares
Focus: ETFs / index funds
2022 vs. 2021: Unchanged
Thoughts: I started buying ETFs in 2020 after the market crashed. I had thought about jumping in for a while, and the pandemic/market crash just so happened to coincide with me opening up a General Investment Account via my bank. I’m quite a risk averse person, so I really only just about dipped my toes in at the time. As time has gone on, I’ve gotten a lot more comfortable with buying ETFs, in fact it feels as comfortable to me now as putting my money into my savings account. Of course there’s no guarantee that it goes up, but I’ve yet to be burned badly. Whilst valuation fluctuate, these buys have generally trended up fairly uniformly. I put some money away every month (I never try to “time” it – I’m not a trader), and I don’t really try to do anything fancy – I’ve put some money away into a range of ETFs including one that closely resembles the S&P 500, and baskets that track tech stocks, healthcare, property, UK blue chip, ESG funds. Emerging Markets and then some. I never ever buy individual stocks, I have some limitations due to my job but even if I didn’t, I still don’t really think I would. It would require forming an entire investment thesis and I don’t really see myself taking the time out to do this properly. FYI: You can invest £20k a year into an ISA account with any capital gains absolutely tax free.
2022 vs. 2021: More aggressive
Thoughts: Property is one I have really scratched my chin around. I think we all might know an adult somewhere that bought their first place below £100k, and swears that building some sort of property portfolio is one of the best financial decisions you can make. I also know that there is a lot of debate around buy-to-let properties at the moment, and whether its really ethical. There are very varied opinions within our generation: groups that swear its evil, groups that are pushing ahead with force and building their own portfolios, and some that say that the returns here are just too little now – afterall, why buy a property with a 10-20 year+ investment horizon, when the right coin in the crpyto space can 10, 20, 30x within a mere few months. In any case – it’s something I want to look into a lot more this year. The mechanics of it, the best areas to buy, what it really means for you long term if you go down this route, what the costs are. Of course, a property is probably the absolute biggest one-time cash payout of all the options listed here, and it’s a huge commitment, so it’s one I really need to understand better to weigh up my approach.
Focus: BTC / ETH / Others
vs. 2021 More aggressive
Rationale Cryptocurrencies are an interesting one… would you believe I made my first buy here in 2017? It was only a tiny amount (I did not become a gazzilion-aire… unfortunately), but my boyfriend was dabbling in the space already back then so I just dipped my toes in because – FOMO. I won’t sit here and tell you I know a ton about cryptocurrencies – I can’t say that I “get” it. I can give you the basic spiel around why they could be attractive, but it hasn’t necessarily gripped my heart the way it has for many others. That said, my older brother and my partner are absolutely obsessed with crpytocurrencies, and these are 2 people I regard as being very smart, therefore, I genuinely do listen to their recommendations. Some people don’t like this approach and feel that they need to understand something fully before buying, which is fair, but I really don’t mind leaning on those who I regard as knowledgeable. To me, it’s similar to when you work on a project and things are delegated to those with the best skill sets for each topic. I want to be a little more aggressive with my purchases here in 2022 (although the current state of the market has my stomach turning into itself).
My own projects
Focus: Soulful Kitchen and Skylish
2022 vs. 2021: Unchanged
Thoughts: I am a big believer in investing in your own passion projects to push them to the next level. The first time I really used my own money to truly invest in my own idea was when I bought a DSLR back in 2016 – I took some of the cash I’d been given for Christmas, combined it with some of my student loan and forked out only a shiny Nikon. The purchase allowed me to really pick up the quality of my photos, which was necessary at the time as posting a lot more beauty photos that required flat lays, and taking outfit photos with a friend. I’ve invested in many things for my blog over the years – I bought this layout and had someone customise it for me, and I still go back to this person to make certain edits or fix certain errors when need be; I also spent a few years going in on my fashion blogging where I paid a photographer every 5 weeks to help me get the best shots, again this was great for also growing my Instagram, and the quality of photos truly picked up a notch which made for better viewing on my blog. Last year, I spent some money investing into Soulful Kitchen, the recipe platform I plan to launch in Q1. I’ve also invested in things which have in effect become a “sunk cost” – in the past, I spent some money investing in a fashion brand which actually never made it to launch. Sometimes you need to spend money to make money – it can be nerve wracking, but it can also truly catapult your ideas. The hope of course most of the time is that you make it all back and then some. Of course, spend within reason – you don’t need to empty our your entire bank account for e.g. I particularly like People Per Hour and Fiverr to find freelancers to help me with different ideas.
Treating myself and others
Focus: Myself and my loved ones
2022 vs. 2021: Unchanged
Thoughts: I’m a person who likes a good deal, and who thinks long and hard before splurging. Traditionally, I’ve been quite conservative, I’ve never really even had to budget as I was naturally inclined to save more. As time has progressed, I’ve naturally become a lot more easy-going when it comes to spending on the “fancier” things. I think everybody takes a different view on this – some people splurge money they don’t even really have, and others take the view that anything expensive is a waste of money as it can be invested somewhere else. Personally, I like treating myself sometimes to some nice jewellery, a nice bag, a fancy hotel, etc. Partly because I feel like people spend so much time chasing money, and I sometimes wonder – do you ever intend to spend this money, or you just want to continue stacking it up for no reason? As well as treating myself, I also like to treat those around me, and it doesn’t always have to be linked to a birthday/special event. So – live your best life! Spend wisely, but treat yourself too; why are we working so hard otherwise?
I hope this has been helpful for anyone trying to take the next step in this wonderful world of personal finance in 2022. Any questions – you know where to reach me!