Introductory course

Simple
Investing

The Basics, the Strategy and ETFs: everything you need to get started, explained step by step. Go at your own pace — you can always go back with the arrow on the left, or jump to a section with the ☰ menu at the top.

How it's organised

Three modules, in order

1

The Basics

The personal foundations, before even talking about investing

2

The Strategy

How Global Equities + Cash works, step by step

3

ETFs

The concrete tools and where to buy them

💡 In the bottom left you'll also find short "notes", meant for anyone presenting this course to someone else.

Module 1 of 3

The Basics

Before talking about investing, let's put your personal situation in order: net worth, budget, savings and an emergency fund.

Module 1 — The Basics

Net worth

Assets−Liabilities=Net worth

It's the real snapshot of your financial health: what you own, minus what you owe. Knowing it lets you understand how much of your net worth is truly liquid — quickly available if needed — and whether the mix between property, investments and cash matches your goals. Assets fall into three categories:

🏠

Property

Main residence
Second homes
Garages, shops, other property

📦

Other Assets

Unlocked investments (brokerage account)
Locked investments (pensions, life insurance)
Car, jewellery, valuables

💧

Cash and Debts

Liquid assets: current account, savings account — immediately available
Liabilities: outstanding mortgage, personal loans, instalment finance, revolving credit

Module 1 — The Basics

Net worth, stage by stage

Net worth also changes shape over time: its composition changes, its purpose changes, and — towards the end of the journey — even the direction of its movement changes.

20–35

🌱

Young saver

Net worth is often close to zero: savings habits matter more than capital already accumulated.

Accumulation

35–50

🏠

Family building wealth

Net worth grows, but is often dominated by property: mortgage and main home outweigh other investments.

Accumulation

50–65

⛰️

Approaching retirement

Net worth approaches its peak: the mortgage is paid off and the investment portion becomes more substantial.

Accumulation

65–90

🏖️

Retired, living on income

Net worth stops growing and starts, carefully, to be drawn on to support your lifestyle.

Decumulation

The first three stages belong to the accumulation phase: net worth grows. The last is the decumulation phase: the capital built up is gradually drawn down — a topic we'll return to in Module 2, when discussing how to turn it into an income.

A general principle: when a single category — property, other investments or cash — exceeds 75-80% of total net worth, it's worth asking whether that concentration is a conscious choice or simply the result of how your net worth built up over time.

Sometimes it's worth taking a step back: looking at your net worth as a whole helps give direction to your big life goals, and puts things in perspective during difficult periods — a falling market weighs less heavily when you view it in the context of everything you've built.

Module 1 — The Basics

The budget

You can't improve what you don't measure. A budget lets you know precisely how much comes in, how much goes out, and above all how much is left over each month. The secret isn't giving up life's pleasures, but making every pound spent visible.

📥 IncomeSalary or pension · Rental income · Dividends and investment income

📤 Expenses

60%

20%

Essentials (max 60%): mortgage/rent (max 30%), food, bills, taxes, transport

Non-essentials (max 20%): holidays, eating out, sport, subscriptions

Savings (at least 20%): the first "expense" of the month, not the last

The 60/20/20 rule is a starting point, not an absolute constraint: adapt it to your own income level and a sustainable lifestyle.

Module 1 — The Basics

The budget, stage by stage

The way a budget is split also tends to change across different stages of financial life:

20–35

🌱

Young saver

Income is often lower and more variable: the main challenge is building the habit of saving, even starting below 20%.

35–50

🏠

Family building wealth

Essential spending grows (mortgage, children, housing) and can approach or exceed 60%: budget control is most valuable here.

50–65

⛰️

Approaching retirement

With the mortgage nearly paid off and children more independent, essential spending frees up room: a natural moment to push savings beyond 20%.

65–90

🏖️

Retired, living on income

Income changes nature (pension, drawdown): budgeting shifts from accumulation to sustainably managing spending over time.

These are typical trends, not fixed rules: what matters is that your budget stays honest with today's real income, not with the income you'd like or expect.

Module 1 — The Basics

Saving

20%

The golden rule: aim to save at least 20% of net income. If that's not possible today, start from 5% and increase it every time expenses fall or income rises. It's not the starting figure that counts — it's consistency.

Some useful questions to find room: is that expense a real need or a passing want? Are there contracts (utilities, insurance, subscriptions) you haven't renegotiated in years? It's best to avoid big purchases on credit: interest charges quietly erode your savings.

Module 1 — The Basics

The emergency fund

Before even thinking about investing, it's essential to build an immediately available cash reserve to cover unexpected expenses — a car breakdown, medical costs, a home repair, a temporary loss of income — without having to touch your investments or resort to expensive borrowing.

📏

How big should it be?

Goal: cover 6–12 months of total monthly expenses
Start with 1–3 months of expenses and build it up gradually
Feed it with an automatic monthly transfer, even a small one

🏦

Where to keep it?

An easy-access savings account with no penalties
Kept separate from your main current account
Don't invest it in shares: you need it when markets might be down

Without an emergency fund, any unexpected event risks turning into a financial crisis that forces you to sell investments at the worst possible moment — often right in the middle of a market downturn, when prices are low.

Module 1 — The Basics

What investing really means

People approaching financial markets for the first time often carry the same mental image: investing is like "playing the stock market", a risky activity where you can lose everything overnight. This idea comes from confusing two very different things.

🎲 Speculation

Short horizon: days or weeks
Aims to guess the next price move
Unpredictable outcome, close to gambling

🌊 Investing

Long horizon: years or decades
A diversified basket of companies, like a Global Equities ETF
What matters is the "tide", not the wave of the moment

Investing in a Global Equities ETF means becoming, even in a tiny way, a part-owner of thousands of real companies — the ones that produce the goods and services you use every day. As a shareholder you take part in the real economy of different countries: value grows as these companies perform better, innovate and increase their profits over time.

The value of an equity investment never moves in a straight line: it rises and falls continuously, more like ocean waves than a staircase — but anyone who watches the tide as a whole, over months and years, sees a very different picture from someone who only watches the wave of the moment.

Module 1 — The Basics

Why Invest

Investing — with a suitable horizon — is a way to put your capital to work instead of letting it erode. Even with no risk at all, money that just sits there quietly loses purchasing power: inflation, on historical average, runs at around 1.6% a year (Bank of England, last 25 years).

After…	£10,000 sitting still (real purchasing power)	£10,000 invested (historical average return ~10%)
10 years	≈ £8,530	≈ £25,900
20 years	≈ £7,280	≈ £67,300
30 years	≈ £6,210	≈ £174,500

Statistically, a diversified basket of shares has historically been the most effective way to grow capital over the long run: over the last 50 years, positive years have been noticeably more frequent and larger than negative ones. But investing also means accepting risk: it needs to be managed and sized to your own personal tolerance — the subject of the next module.

Module 1 — The Basics

Your goals

Every investment should have a clear goal. You can have more than one, and they can change over time: investing on your own gives you the freedom to adapt your strategy to your own pace, without being bound by someone else's terms or timeline. Four broad goals come up most often:

🛡

Preserve capital

Protect your wealth from inflation, with stability and low risk.

📈

Grow capital

Multiply it over a 10-20 year horizon, accepting volatility as part of the journey.

💰

Generate an income

A regular stream of income, alongside a pension or other income sources.

🔄

Optimal decumulation

Gradually draw down the capital you've built up, as efficiently as possible over time.

Module 1 — The Basics

Your personal projects

Beyond the big goals, there are concrete milestones that call for a dedicated plan:

🏠

Buying a home — saving for a deposit needs a defined horizon and careful risk management.

✈️

Travel and personal projects — a dedicated fund lets you enjoy them without dipping into your main wealth.

👴

Topping up retirement — building extra capital to maintain your standard of living.

🎓

Children's education — investing for university, a master's degree or experiences abroad, starting while they're young.

Module 1 — The Basics

Returns

Compound interest: Albert Einstein is said to have called it the eighth wonder of the world — probably an apocryphal anecdote, but the idea it describes is real: an investment's gains generate further gains in turn, year after year. At an average annual return of 10% — in line with the long-run historical average of a global equity portfolio — £10,000 invested and never touched behaves like this:

After 10 years

around £25,900 — almost 2.5 times the initial capital

After 20 years

around £67,300 — almost 7 times the initial capital

After 30 years

around £174,500 — more than 17 times the initial capital

After 40 years

around £452,600 — almost 45 times the initial capital

Time works for you. It's not just about growing the initial capital: every pound of return, left invested, starts producing returns of its own. It's growth that feeds on itself — which is why time, even more than the amount invested, is the single most powerful variable an investor has.

Past returns don't guarantee future results — this is an illustrative example based on the long-run historical average.

Module 1 — The Basics

Market swings

These swings — technically called volatility — aren't a flaw in the system: they're the normal consequence of the fact that a listed company's price reflects, in real time, the expectations of millions of investors about future profits, interest rates and economic cycles. No one can predict the next wave with certainty: that's why no serious strategy relies on trying to time entries and exits from the market (so-called market timing).

Size of decline	Historical frequency
> 5%	About 3-4 times/year
> 10% (Correction)	Roughly every 1.5-2 years
> 20% (Bear Market)	Roughly every 6-8 years
> 40% (Historic crash)	Roughly every 20-30 years

Indicative figures for global equity markets over the long run.

🌊 The real risk isn't the wave: it's getting out of the water at the wrong moment. Anyone who sells in a panic turns a temporary loss into a real one — and misses the rebound that follows too. The most effective strategy isn't avoiding the swings: it's staying invested through them.

Module 1 — The Basics

ETFs

For decades, building a diversified portfolio was only possible through bank-managed funds — expensive and not very transparent. Today the same result can be achieved by investing in ETFs (Exchange Traded Funds): a basket of securities bought on an exchange exactly like a single share. The simplest way to start is an ETF on Global Equities, via the MSCI World index: that means investing at once in over 1,400 companies across 23 developed countries, for an annual cost of just 0.10-0.20%.

MSCI World

1,280 companies
23 developed countries

Americas

Nvidia
Apple
Microsoft
Amazon
Alphabet
Broadcom
···

Europe

ASML
HSBC
Roche
Novartis
Shell
Nestlé
···

Asia-Pac.

Mitsubishi UFJ
BHP Group
Commonwealth Bank
Toyota
Sumitomo Mitsui
Tokyo Electron
···

The companies shown are the largest by weight in each geographic area within the MSCI World index: indicative figures, updated periodically.

✓ Strengths

🌍 Diversification — a single purchase, exposure to hundreds or thousands of companies
💰 Low costs — annual charges often 10 times lower than traditional funds
💧 Liquidity — exchange-listed, tradeable at any point the market is open
🔍 Transparency — holdings and price public and updated every day

⚠ Weaknesses

🗳️ No voting rights — you don't take part in shareholder meetings
📦 All or nothing — you invest in the whole basket, including companies you might not like
⚠️ Market risk — the value can fall, with no capital guarantee
⚖️ Fixed weights — each company's share follows the index, you can't exclude any one individually

Module 1 — The Basics

The most common alternatives in the UK

In the UK, the average saver is often steered towards products offered by their own bank. Here's an honest assessment of the main ones:

🏦 Actively managed funds

Typical annual cost of 1.5-3%, often with entry or performance fees. Over 80% of these funds underperform their benchmark over 10 years (source: SPIVA).

Best avoided as a core holding — replaceable with equivalent ETFs at a tenth of the cost.

🔒 With-profits/guaranteed funds

Offer a capital guarantee and a minimum guaranteed return, today around 2-3%. But annual charges (1-2%) and limited transparency cap the net return.

Useful only for those seeking an absolute capital guarantee.

🏛 Workplace/personal pension (SIPP)

Contributions get tax relief, up to annual allowance limits — a real tax advantage. The money is locked away until at least age 55 (rising to 57), though.

Complementary, not a substitute: worth discussing with a qualified adviser.

📜 UK Gilts

UK government bonds, accessible via dedicated bond funds or on the secondary market through a broker, with no management fee for direct holding. Current yields around 4-4.5% gross depending on maturity.

A good fit for the Cash component of the strategy over a short-to-medium horizon.

🏦 Cash ISA / easy-access savings

Offered by online banks and building societies, currently paying around 3-4% gross, with no management fee. Simple to open and manage. Interest within a Cash ISA is entirely tax-free, up to the £20,000/year ISA allowance.

Ideal as an emergency fund and Cash component. Complementary — not an alternative — to ETFs for long-term growth.

Module 1 — The Basics

ETFs or Property?

Property is often the first alternative people think of compared to ETFs — but "property" is too broad a label: buying your main home, a second home for holidays, or a buy-to-let for short-term lets are financially very different decisions, even though they involve the same type of asset. Let's look at them separately.

🏠 Main home with a mortgage

Buying your main home with a mortgage is the one case where "borrowing to invest" is culturally accepted, and it's often a financially sound choice thanks to leverage: with a 20-30% deposit and the rest on a mortgage, you control an asset that appreciates on its full value, not just the portion you've paid off. Example: a £300,000 home, £60,000 deposit; if in 10 years the value rises 20% (+£60,000), the return on the equity you actually put in is 100%, not 20% — that's leverage, and it works the other way too if the value falls. Worth noting: don't take appreciation for granted — between 2010 and 2025, home prices rose by around 60% on average across the EU (~3% a year), but in Italy they stayed roughly flat — the only major EU country with a near-zero cumulative change over the period (source: Eurostat) — so the example above is illustrative, not a forecast. You should also factor in the rent you're not paying (an implicit return that's often forgotten), plus housing stability and the strong cultural pull of homeownership across the UK, Italy and Europe more broadly.

✅ Remains a good vehicle, both financially (leverage + rent saved) and for personal stability. It isn't in competition with an ETF portfolio: it's a different goal (a place to live), often complementary if the budget allows.

🏖 A second home for holidays

Here leverage is almost always absent or minimal (often bought in cash or with a small mortgage), while fixed costs run regardless of use: council tax on an empty property, utilities even when vacant, insurance, routine and one-off maintenance, any service charges. On top of this comes illiquidity (selling takes months, with agent fees of 3-6%). Even factoring in the property's appreciation over time (around 3% a year on average across the EU between 2010 and 2025, far less in Italy — source: Eurostat), the opportunity cost remains significant against an ETF, which would historically have returned 6-7% a year on average.

⚠ Not financially attractive. It makes sense if the main value is personal enjoyment — best seen as spending on your own wellbeing, not as an investment. Anyone mainly seeking returns would do better with an ETF portfolio and an occasional holiday rental when needed.

🔑 A third property for short-term lets (e.g. Airbnb)

The advertised gross yields (often 8-15% a year of the property's value) hide a long list of costs to subtract: platform fees (15-20%), cleaning, check-in/check-out management, heavier wear on the property, tax, seasonal vacancies, and any external manager if you don't run it yourself (another 15-20%). Unless you outsource almost everything — shrinking the margin further — running short-term lets takes a time commitment comparable to a second job, not a passive investment. There's also growing regulatory risk: many cities (including several in the UK and Italy) are introducing stricter restrictions or taxation on short-term lets.

⚠ Watch the gap between the advertised gross yield and the real net one, which after all costs often falls to 2-4%. Even adding any property appreciation on top (historically around 3% a year on average across the EU, close to zero in Italy — source: Eurostat), the total return rarely beats much simpler, more liquid and passive instruments, for a far greater time commitment and risk. Best treated as a business in its own right, not as "investing" in the sense SimpleInvest means it.

💡 The core difference: an ETF is a passive, liquid, diversified instrument with no ongoing work; property offers in exchange accessible leverage (a mortgage on your main home) and a use value that an ETF doesn't have. There's also a structural difference in what drives growth: a global equity ETF tracks the world economy, while a property's value depends on local supply and demand. With the population decline projected in several European countries, long-term housing demand risks weakening in many areas, with a stagnation risk that a globally diversified ETF doesn't share in the same way. The two aren't mutually exclusive: for anyone who already owns their main home, an ETF portfolio remains the most efficient tool for growing the rest of their wealth.

Module 2 of 3

The Strategy

How the Global Equities + Cash strategy works in detail: why it was chosen, how it adapts to you, and how to manage it over time.

Module 2 — The Strategy

Your financial journey

The same strategy adapts, simply by changing the proportions, to every stage of life:

20–35

🌱

Young saver

100% Global Equities

Build the habit of saving and invest with time on your side.

35–50

🏠

Family building wealth

80% Global Equities · 20% Cash

Grow your capital while managing a mortgage and family expenses.

50–65

⛰️

Approaching retirement

60% Global Equities · 40% Cash

Consolidate the wealth you've built, gradually reducing risk.

65–90

🏖️

Retired, living on income

40% Global Equities · 60% Cash

Live off your portfolio, drawing down carefully without exhausting it.

The percentages are reference points, not a fixed rule: your ideal allocation also depends on your personal risk tolerance, not just your age.

📈 Why it works: the MSCI World index has historically produced an average annual return of around 10% in sterling terms over the last 50 years (source: Curvo.eu, since 1970), including oil shocks, the 2000 and 2008 crashes, the pandemic and inflation. The Cash component reduces overall risk, guarantees liquidity and enables periodic rebalancing — buying more ETF units when the market falls.

Module 2 — The Strategy

Why this strategy — and not another

Many valid investment strategies exist. Here's why SimpleInvest didn't choose the more common alternatives:

MSCI World + Bonds (60/40)

A tried-and-tested classic. But it requires familiarity with concepts like duration and interest-rate risk — an extra learning curve for a beginner.

MSCI ACWI (including emerging markets)

Broader geographic coverage in a single instrument, but with higher volatility and greater geopolitical and currency risk.

Multi-asset ETFs (e.g. Vanguard LifeStrategy)

Automatic rebalancing included, but less flexibility: you can't adjust the percentages or use a separate Cash component as a buffer.

Actively managed funds (the ones your bank sells)

Charges from 1.5% to 3% or more, against 0.10-0.20% for a passive ETF. Over 20-30 years, the difference can amount to tens of thousands of pounds.

These strategies aren't wrong — some are excellent. But for a beginner, understanding one thing well beats understanding four things poorly.

Module 2 — The Strategy

Who it's suited to

✓ Suits you if you…

Have a horizon of at least 5-10 years
Want simplicity and low fees
Don't want to follow the markets every day
Invest regularly (monthly regular investing)
Are in the decumulation or retirement phase

⚠ Less suited if you…

Need liquidity in the short term
Can't tolerate 30-40% drawdowns
Want exposure to emerging markets
Want exposure to sector-specific instruments

This simple strategy can help anyone take their first steps in investing, with minimal learning required — and, in many cases, while continuing to use their own bank's services.

Module 2 — The Strategy

How much Equities and how much Cash

The shorter the horizon, the less time there is to recover from a downturn. The biggest historical crises (MSCI World: 2008 around -54%, 2020 around -34%, 2022 around -25%) took as long as 3-5 years for a full recovery.

Horizon	Global Equities	Cash
1 year	0-15%	85-100%
3 years	15-35%	65-85%
5 years	40-60%	40-60%
10 years	65-85%	15-35%
20+ years	85-100%	0-15%

Global Equities and Cash are instruments that, in many cases, you can buy and sell on your own through your own bank's app.

⚠️ Illustrative ranges, not a personalised recommendation. The right allocation also depends on your risk tolerance and overall wealth — use the Simulator on simpleinvest.eu to test personalised scenarios.

Module 2 — The Strategy

The initial capital

Even a modest starting capital makes a huge difference over the long run. There's no need to wait until you have "enough": the best time to start is as soon as possible. Thanks to compounding, every pound invested today works for years — and in turn generates its own return. Monthly contributions add up over time, but it's the initial capital that starts the engine.

Anyone dealing with a significant amount of capital — from a property sale, an inheritance — faces a different challenge: investing it all at once carries the risk of entering at a market peak. Two cautious approaches: spread the purchases over 12-24 months, or start with a lower equity share (e.g. 40-50%) and increase it gradually.

💡 A significant amount of capital calls for more care going in, not less. Patience during the entry phase pays off over the long run.

Module 2 — The Strategy

Recurring investments — pound-cost averaging

Each month (or quarter), you buy a fixed amount of a World ETF, regardless of the market price. This technique — pound-cost averaging — puts volatility to work for you: you automatically buy more units when prices fall and fewer when they rise, lowering your average purchase price over time.

You don't need a large starting sum: even £100-200 a month, invested consistently for 20-30 years, produces meaningful results thanks to compound interest.

Module 2 — The Strategy

Income and decumulation

When you reach your goal — retirement, financial independence, a supplementary income — the same strategy supports a gradual drawdown. Instead of cashing everything out at once, you withdraw a portion periodically, keeping the rest invested. The Cash component acts as a buffer: you draw from it first, letting the equities keep working.

3–4%

A rule of thumb for annual withdrawal from the total portfolio — at these levels, the portfolio has historically maintained its real value over time.

In favourable market conditions, the withdrawal rate can be raised to as much as 7-8% a year — provided you're ready to reduce it if market conditions worsen, and accept, in general, some decumulation of capital over time.

Module 2 — The Strategy

Rebalancing: when and how

Every 3 or 6 months, the portfolio is brought back to its target composition: if equities have grown a lot, some are sold; if they've fallen, more are bought with the available cash.

Typical thresholds, ideally asymmetric: you buy below target −5%, you sell above target +10% — designed to lower the average purchase price and take advantage of rallies.

No need to predict the market: what's needed is keeping risk under control over time, with a rule decided in advance, not one made in the panic of the moment.

Module 2 — The Strategy

When the market falls: the checklist

🔁

Follow your rebalancing rules — buy below the target threshold, sell above it: the automatic mechanism that takes advantage of downturns without having to guess the right moment.

💶

If possible, add new capital during downturns — buying at lower prices amplifies future returns.

⚖️

Only revisit your Equities/Cash % if the downturn puts your short-term goals at risk — never as a last-minute reaction to panic.

📉

If you have an active income drawdown, consider reducing it temporarily — withdrawing less during a downturn leaves more capital invested to take part in the recovery.

🪙

Use the Cash component as a buffer for your monthly income, instead of selling equities at a loss.

✅ None of these tactics requires predicting the market or checking your portfolio every day. A quarterly check — in line with the rebalancing schedule — is more than enough.

Module 2 — The Strategy

The big picture

Having looked at each element on its own, here's how they fit together into a single strategy:

+ Initial capital and recurring contributions

↓

Global Equities

MSCI World — the growth engine

Cash

interest-bearing

↓

Rebalancing

keeps target weights in place

↓

− Withdrawals / income

outflows from both components

↓

= Portfolio evolution

over time, through market cycles

Investing on your own lets you step in at any point of the strategy if conditions or goals change: adjust recurring contributions, change the Equities/Cash allocation, update the rebalancing rules, adapt income withdrawals — all of which can be done on your own through your own bank's app.

Module 3 of 3

ETFs

The concrete tools: what they are in detail, which ones to choose and where to buy them, with reference to the London Stock Exchange.

Module 3 — ETFs · London Stock Exchange

Global Equities: MSCI World ETFs

An ETF that tracks the MSCI World index is the recommended starting instrument. Generally domiciled in Ireland or Luxembourg, they're listed on the main European exchanges: London, Euronext, Xetra, Milan, Madrid.

💶

TER — the fund's total annual cost. Lower is better, for the same index tracked.

📊

AUM — the assets the fund manages. A stability indicator: larger funds tend to last longer.

🔁

Accumulating (Acc) — dividends are automatically reinvested into the fund: generally the simplest and most tax-efficient choice inside an ISA over the long run.

Provider	Ticker	ISIN	TER	AUM
iShares Core MSCI World	IWDA.L	IE00B4L5Y983	0.20%	~€119bn
SPDR MSCI World	SWRD.L	IE00BFY0GT14	0.12%	~€15bn
Xtrackers MSCI World	XDWD.L	IE00BJ0KDQ92	0.12%	~€14bn
Amundi MSCI World	LCWD.L	IE000BI8OT95	0.12%	~€13bn

Always check up-to-date figures on the provider's website before investing — values can change over time.

Module 3 — ETFs · London Stock Exchange

The Cash component: SONIA ETFs

For the Cash component of the strategy, the most common instruments are four: an easy-access savings account, short-term government bonds (e.g. short-dated Gilts), a high-yield savings account offered by some providers, and money-market ETFs that track the SONIA rate — the latter are the instrument this fact sheet focuses on.

Provider	Ticker
Xtrackers GBP Overnight Rate Swap (SONIA)	XSTR.L

Distributions from this ETF are treated as interest for UK tax purposes, not as dividends — inside an ISA they're tax-free either way.

💡 Savings account or money-market ETF? For simplicity, it's best to stick to these two options, without being drawn in by the complexity of bonds or high-yield accounts with less transparent terms. A practical way to choose: look at the Bank of England base rate — the higher it is, the more competitive money-market ETFs tend to be; the lower it is, the more a plain savings account may suit.

Module 3 — ETFs · UK

Where to open an account

Hargreaves Lansdown

ISA + SIPP + GIA · UK's largest platform · full-service research and support

Freetrade

ISA + SIPP + GIA · simple mobile-first app · commission-free share dealing

Trading 212

ISA + GIA · zero platform fee · zero dealing commission

This isn't an exclusive recommendation — always compare costs and services based on your own needs.

If you'd rather stay with your usual bank instead of opening an account with one of the brokers above, note that the largest UK banking groups — HSBC, Barclays, Lloyds Banking Group, NatWest Group and Santander UK — now generally let you invest independently in ETFs through their online banking platform. This is a solid option especially for beginners who prefer the convenience of a single trusted institution. The trade-off is usually higher trading fees and/or custody account charges than the specialised brokers compared above. If this route interests you, check directly in the "Investments" section of your online banking for the terms applied and the availability of accumulating UCITS ETFs.

Module 3 — ETFs

Investor Profile Questionnaire (MiFID)

Before you can start investing, your broker or bank will ask you to complete a mandatory questionnaire (required under the EU MiFID II framework, or equivalent investor-protection rules in your country). It isn't a test to pass, but a tool for your protection: it helps them understand who you are as an investor and offer you products suited to your profile. Answer honestly — answering "strategically" to get a more aggressive profile exposes you to risks you may not actually be prepared for.

🎓

A. Knowledge and experience — your hands-on experience with past investments and your basic theoretical knowledge (e.g. volatility, diversification).

💼

B. Financial situation — income, overall net worth, existing debts and whether you have an emergency fund.

🎯

C. Objectives and risk tolerance — time horizon, reaction to potential losses, and the main goal of the investment.

Based on your answers, the broker assigns you a profile (e.g. conservative, balanced, dynamic) that may restrict access to complex products (derivatives, leveraged certificates) if your declared knowledge/experience is deemed insufficient. Simple UCITS ETFs — the ones this strategy is built on — are considered "non-complex" instruments and remain accessible almost always, even with a conservative profile.

Module 3 — ETFs · UK

Investment taxation

Tax principles applicable to ETFs in the UK. Rules change over time: always verify official sources before making decisions.

💹

Capital Gains Tax (CGT) — since October 2024 rates increased: 18% basic rate, 24% higher/additional rate. Applies on gains above the £3,000 annual allowance.

🌿

Stocks & Shares ISA — the most efficient wrapper. Gains and dividends completely tax-free. £20,000/year limit. No limit on accumulated wealth. Transferable between providers.

💷

Dividends outside an ISA — £500/year allowance tax-free. Above that: 10.75% basic rate, 35.75% higher rate, 39.35% additional rate (2026/27 rates, raised by 2 points from 6 April 2026).

🏛️

SIPP — tax relief on contributions. Accessible from age 57, with a 25% tax-free lump sum. Gains grow tax-free within it.

📉

Losses — offsettable against gains of the same tax year. Excess carried forward indefinitely. "Bed and breakfast" rule: don't repurchase the same holding within 30 days.

✅

Optimisation — use the ISA wrapper first, up to the annual allowance. Make use of the £3,000 CGT allowance by selling and rebuying within an ISA ("bed & ISA").

⚠️ Indicative information. Tax rules change — always verify official sources before making decisions. Does not constitute tax advice.

Module 3 — ETFs

Psychological risk — the invisible enemy of returns

The best strategy is the one you can stick to in difficult moments.

📊

Investing is not trading. The less you do, the better you do.

📅

Don't check your portfolio every day. Your horizon is measured in decades, not days.

🔍

Don't constantly chase the best instrument. Simplicity is a strategy, not a compromise.

🚫

Don't follow the trends of the moment. Following trends has a cost: buying high and selling low.

💰

Don't sell in crashes — use Cash as your ally. Crashes are not a threat for those with cash ready: they are an opportunity.

🧪

If you get passionate about finance, accept it — but set a limit. The 95% works for you over the long term. The 5% learns.

🗂️

Separate portfolios by goal — don't mix everything together. Clarity of goals is the best antidote to fear.

⚠️ This content is for educational purposes only and does not constitute personalised financial advice. All investment decisions are the sole responsibility of the investor.

Before we wrap up

Your first steps

1

Work out your net worth and set a monthly budget.

2

Build your emergency fund, if you don't already have one.

3

Decide which broker or bank to use for your first investments, and open an account if needed.

4

Define your goals and build the right portfolio, with an Equities/Cash allocation suited to your time horizon.

5

If the goal calls for it, put the available capital to work by buying the right amounts of Equities and Cash — if it's a significant amount, spread the entry over 6-12 months.

6

If the goal calls for it, set up monthly regular investing and a rebalancing schedule (every 3-6 months).

7

If the goal calls for it, set up a monthly or quarterly withdrawal/income from the Cash portion and a rebalancing schedule (every 3-6 months).

You've completed the course

The Basics, the Strategy, ETFs

Keep exploring the deep-dive guides and simulation tools on simpleinvest.eu, to build and follow your strategy over time.

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Three modules, in order

The Basics

Net worth

Net worth, stage by stage

The budget

The budget, stage by stage

Saving

The emergency fund

What investing really means

🎲 Speculation

🌊 Investing

Why Invest

Your goals

Your personal projects

Returns

Market swings

ETFs

✓ Strengths

⚠ Weaknesses

The most common alternatives in the UK

ETFs or Property?

The Strategy

Your financial journey

Why this strategy — and not another

Who it's suited to

✓ Suits you if you…

⚠ Less suited if you…

How much Equities and how much Cash

The initial capital

Recurring investments — pound-cost averaging

Income and decumulation

Rebalancing: when and how

When the market falls: the checklist

The big picture

ETFs

Global Equities: MSCI World ETFs

The Cash component: SONIA ETFs

Where to open an account

Investor Profile Questionnaire (MiFID)

Investment taxation

Psychological risk — the invisible enemy of returns

Your first steps

The Basics, the Strategy, ETFs

Simple
Investing