Three levels…
Start simple, go further if you want.

Everything here is built around three layers, each resting on the one before. You can stop at the first and still do better than most people paying for advice. The other two are there for when you want more.

Crawl

The Foundation

Free

One low-cost fund that owns the biggest companies in America. Add when you can. Then leave it alone. For most people, that's the whole job — and the ceiling they never need to go past.

See Level 1: The Foundation →

Walk

Diversify

Paid

The foundation, plus a few carefully chosen funds for different parts of the world and economy. A little more return, a little less risk.

See Level 2: Walk →

Run

Outsized returns

Paid

Individual companies, bought when nobody wants them, held until everyone does. Using Warren Buffett's methods to beat the market.

See Level 3: Run →

The three levels explained

Managing your own money can be very simple. Start with the foundation — this alone will get you better results than most people will get using professional advisers. The reason for this is twofold — firstly most advisers and fund managers don't beat the market, and secondly fees, although they look small at just a couple of percent, actually have a MASSIVE effect on your returns. This is all explained in this article.

Level one

The foundation is very simple, and it works, but do not underestimate the psychological effect of seeing your investment go up and down every day. If you are not used to this, you will find it difficult at first, especially if you are used only to savings accounts or Cash ISAs where the balance only ever goes up.

Over time the foundation will easily outpace savings or Cash ISAs, but it is not a straight line — there are wiggles along the way. This is a normal part of investing, and you know it is going to happen, but nevertheless it's disconcerting when you see it for the first time with your own money.

Over time, you will learn to ignore the noise and focus on the long-term returns. Once you've got used to that, and are comfortable with seeing the daily fluctuations in your investments, you might want to go further. This is what the next two levels are about, and they are entirely optional. You can stay with just the foundation level and be comfortable in knowing that your investments are outgrowing savings accounts, Cash ISAs, and funds managed by professional advisers.

Level two

Or if you want to get a bit more advanced, you can start to diversify your investments. This is level two. You can start to invest in other markets, such as Asia, Europe or Worldwide. You can also invest in particular sectors which are expected to have strong growth such as Healthcare, Materials, or Energy. In level two, I show you what I am currently investing in, and how those investments are performing.

The goal of level two is to reduce risk by diversifying, so that if one market or sector takes a tumble, your whole portfolio doesn't. Also we look to increase our returns by investing in sectors or markets that we hope to grow faster than the foundation. So level two is about reducing risk and increasing returns, but it is a little more complicated than level one, which is why I suggest you start with level one and get comfortable with that before moving to level two or three. How long this will take is up to you — it could be two weeks, two months, or two years, or maybe you will stay with the foundation forever. It's all about your personal appetites for risk and returns.

In the foundation, our aim is to capture the market returns at the lowest possible cost. Typically, over the long term, this will return us about 10% per year. Compounded over several years, this can add up to a significant sum. Compounded over a longer time, say 30 years, this can grow to quite a huge amount of money! Level two takes this a step further and hopefully reduces the drawdowns in the bad times, and gives us a little extra growth from sectors that grow faster than the wider market.

Level three

Level three takes this a step further. Here we are seeking to generate above market returns, by investing in undervalued stocks that we expect to double or triple over the next two to three years. This growth potential is one of the criteria for the stocks we invest in. Clearly when this works, it delivers much more than the 10% per year we expect from the general market (as our recent Intel trade which closed for nearly 5X our investment in 9 months showed), but this is considerably more risky. These are individual companies rather than whole markets or sectors, so whilst the rewards can be far higher, so are the risks. For that reason, this is something I only do with a part of my portfolio, and it is on top of levels one and two. This is the gravy, not the meat and potatoes.

One rule that saves you a fortune in tax

Wherever you can, fill your ISA first — everything inside grows tax-free. Then a SIPP, where the government tops up what you pay in. Then, once those are used up, an ordinary investment account, where you simply pay tax on the gains. Same investments either way — you just pay the least tax possible. How to use your allowances →

Free where it matters most. Paid for the detail.

Level 1 is free and complete — it's all most people will ever need. Levels 2 and 3 are the paid subscription, where I show the exact funds, the individual companies, what I'm buying and selling, and how it's performing.

Step 1 alone will get you better returns than most professionals will, and way better than savings or Cash ISAs.

Start at the bottom. Climb when you're ready.

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