A beginner guide to investing for ELT teachers, Part 2

How to start investing 

Time to use some of that new vocabulary from Part 1 of this teacher’s beginner guide to investing. Next, you need the steps to take to start investing as an English teacher. Whether you’re living abroad or have returned to your country, the basic steps to start investing your money apply to all of us.

This post may contain affiliate links which means I get a small commission if you purchase anything (at no extra cost to you.)

Get clear on your state pensions

English teachers and people in ELT typically move around a lot and think they’re not entitled to state pensions. But so many people are wrong about that that it’s worth the time it takes to check. Pensions are basically free money and free money is always worth a bit of admin and hassle. But you’d be surprised how many people I hear who are ready to let the government keep it. Just to avoid filling out some forms!

If you are or were officially and legally working or self-employed you’ll probably be contributing, or have contributed, some kind of social security payments to the governments of each of those countries. Or maybe you’re there now and are not sure if you’re paying into it, or you know you’re not. Think about Future You and whether they’d be grateful to you for finding out about that now!

Have you paid National Insurance in the UK totalling 3 years, or ever lived there 3 years? Then you may be able to pay voluntary contributions and get a full UK state pension. Even if you’ve missed years or live abroad. It’s well worth reading this post as I’ve helped tons of people become eligible to receive thousands of pounds at retirement. At least ⅓ of them were sure it didn’t apply to them and it did. That makes them as much as £11k a year better off at retirement at very little cost.

Do you want support and guidance with sorting out pensions? You’ll understand much more about what pensions are with someone (me!) to help you navigate the different systems. I’ll make you get it done instead of putting it off and it’s something we can do with a couple of 1-2-1 sessions.

Add compound interest into your life

This is the most important section is this beginner guide to investing! To earn and benefit from compound interest, you don’t necessarily need a lot of money. Time is your best friend here. But get into the habit of never having any more money than you need for that month sitting idle in your current account.

It could be working for you. Start thinking how long it takes you to earn a few euros. Then think how many euros you could earn while doing absolutely nothing apart from opening some accounts and moving money in and out. With most bank accounts online it takes seconds to move money from doing nothing to earning money.

I set aside tax and VAT as my income comes in. As a freelancer my income is irregular. But as soon as it clears my account I take off the tax and any VAT I’ve had to collect and hold it in Wise interest earning or cashback accounts. The interest rates Wise gives are way better than any of the banks in Spain. And I can hold as many “jars” and currencies as I want, with different interest rates. I often bill in dollars or pounds too and those interest rates are higher than euros. I don’t even have more than a couple of week’s worth of money in my 0% interest current account these days as I love knowing it’s earning until I need to spend it or pay my tax bill. 

Also, I prefer to leave it in a Wise interest account and pay things like rent on the last possible day. Why give it to someone else when I could be earning from it? It all adds up.

Build an Emergency Fund

I can’t state enough how much my Emergency fund helps me sleep at night. In fact, a study by Bristol University has linked regular saving for low-earners to better sleep, and the same levels of satisfaction as higher-earning non-savers. They also found savers are more relaxed about the future and more optimistic too.

I’m not surprised at all. 

I’ve been saying something similar for ages. An Emergency Fund’s greatest benefit, beyond the actual financial problems it solves, is how much better it makes you feel about … well, everything. And you can save it slowly if necessary. It is not about having a high income. Lots of high earners have no savings. Potentially, they’re in way more trouble than you if you have an Emergency fund and they don’t but both of you lose your jobs.)

If you want some help calculating your Emergency fund, a very cool (made it mySELF 😎) calculator to work out how long it wil take you to save it and a few ideas on where to put it so it’s earning interest, I’ve got a low-cost Emergency Fund workshop that takes 45 minutes to implement. Hint: Sign up for my email newsletter and you’ll get a limited time discount offer on the Emergency fund course).

There’s another cool thing about an Emergency fund. If you’ve got investing accounts and lose your job or get sick, the last thing you want to do is raid your investments. It can be catastrophic and wipe out your gains or force you to sell at a bad time. Smart investors have an Emergency fund.

Get a private pension (retirement account)

Smart investors also make use of private pensions and retirement accounts because of the tax break they bring. When I was a TEFL teacher and, still later, a materials writer, I glazed over at the word pension. Borrrrring. Old age, yawn, spend it while you’re young etc.

I was wrong. 

Pensions are great. 

They make you save and they save you money in taxes. Yay. Get one and, on the way, or maybe afterwards, you’ll agree with me.

The beginner guide to investing = Start investing!

Investing across your lifetime for the long term or even for closer events like buying a house is the way to make the most of your earnings so you get to have more money than you would otherwise. It’s the biggest secret ever kept as no one teaches us about this at school or university. Most of us weren’t lucky enough to have parents or mentors teaching us how investing works. You can literally go your whole life not realising magic money trees do exist for regular people on low and normal incomes. It’s not just something rich bankers can do. 

But the real secret is this: it’s easy to do. And you can achieve so much by starting today, whatever salary you’re on. I hope this beginner guide to investing inspires you to get started on your won investing journey. As a former ELT teacher I understand how alien all this is. It was for me too. But check out all the other ELT people I’ve helped who used to think the same. Now, they’re well-chuffed with their investments after doing my No-Stress Money Plan.** 

**If you’re an American abroad though, contact me first as this course might not suit you. Americans in America, Delyanne Barros is the teacher for you. This link gives you a very big discount on her full investing course, Slay the Stockmarket.

Some ELT people now happily investing