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Where will I invest my time now Love Island has finished?!

Alex Neilson, Investment Manager, Investec Click & Invest asks what should the Love Island winners do with their sudden windfall of cash:

Topic: Investing

Jack and Dani’s victory came as a surprise to precisely 0 of the 3.6 million people who tuned in to the final last night. Their win seemed inevitable ever since Jack’s liberation from the friend zone six weeks ago. Less certain, though, is the question of what to do with the prize money. Yesterday the couple left the villa £50,000 better off, raising the question of how best to make use of a sudden windfall. Save it? Go on holiday? Perhaps, after their conversation about moving in together, Jani will put it towards a deposit for a hideaway of their own? Or – and for a lot of people this is the last option they think of – they could invest.

If you already have a house, or aren’t quite ready to buy one, investing in the stock market can be a great way to make your money work. It’s true that investing involves risk, but it’s not gambling, as many people seem to think. Investing is about finding a level of risk appropriate for each person and building a portfolio around that. If taking risks with your money makes you ‘prang out’, as the boys in the villa like to say, then make safer investments. Though always be aware that riskier investments have the potential to reward you with greater returns.

Take the first winners of the £50,000 prize four years ago. If they had dropped it into a savings account giving you the average savings rate and not touched it, it would now be worth £52,604. If they had taken the same sum and invested it into a portfolio mirroring the MSCI (Morgan Stanley Capital International) All Countries World Index it would now be worth £85,005*, however it is worth remembering that this portfolio would be considered high risk and therefore 100% invested in stocks and shares.

But for many non-investors, the question is more fundamental than working out your appetite for risk. Those unfamiliar with the world of investing often ask: do you know which investments are risky and which are safe? Here we arrive at the main barrier for most people (and especially millennials like Jack and Dani) – they have no idea what to invest in.

In recent years, a number of online investment platforms have tried to plug this knowledge gap. These ‘robo-advisers’ help you invest in the stock market through apps and easy-to-use websites. Some robo-advisers, such as Investec Click & Invest, manage your portfolio for you so you know your money is in safe hands.

So, Jack and Dani: though reality TV fame is notoriously short-lived, investing in the stock market is a great way to derive lasting benefit from your Love Island adventure. It’s something Dani would do well to consider, before Jack blows the lot on a new set of porcelain veneers.

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