I had some thoughts about my investing plans over the weekend. My first was that, until we buy our forever home, which we are planning to do in 2026, we really need our savings to stay in easy access bank accounts.
The one savings pot I won’t be touching when that time comes, however, is Aiyana’s. Since she was born, I’ve been saving the just under £100 she gets off of the government each month in an easy access account, which I plan to transfer over to her when she’s old enough to appreciate it and spend it wisely. I try not to dip into it at all: so far I’ve only used it to buy her a stack of used books at a time when I was a bit skint. For some reason I felt desperate to buy them... I think I felt like her book selection was rubbish and storytime was thus a disappointment… And while my mum has pointed out that I may need to start using it when she begins having to wear shoes, since she’ll need new pairs very frequently, I’ve decided it is the money I will use to invest for now. I don’t need easy access to it, and setting up Stop Sell orders means I won’t make any losses if a company I’ve invested it in goes down the pan.
One of the points I noted in Week 1 was that we should aim to reinvest the dividends we receive if we can so that we benefit from a cumulative effect, and that is what I am going to do. My ultimate goal is to invest enough on Aiyana’s behalf that she ends up with a steady income stream of dividends that could sustain her if it had to when she’s a fully grown adult, such as if she had to take time off after having a baby or wanted to stop working full-time in order to dive into pursuing her passion. I don’t even know enough about investing yet that I could say whether that is at all realistic, but all we can do in life is move forward with hope right?
This week I started by finding a list of the companies currently on the FTSE4Good UK Index. This was actually much trickier to do than anticipated; an answer on the Personal Finance & Money Stack Exchange was how I did so in the end. Even after I’d found the information, I couldn’t figure out how to work back towards the source. So I’ve resorted to searching “Indicative Index Weight” AND “FTSE4Good UK” on Google which brings it up. I also learned that companies that make up an index are called constituents or components.
I then opened a new Excel spreadsheet and wrote down the names of all those companies under the heading FTSE4Good UK. Next to that column, I wrote down all of those on the FTSE Small Cap, and then the FTSE Fledgling, which are listed on the IWeb website. I could instantly see that none of those in the FTSE4Good column were also in the Small Cap or Fledgling columns, so they must all be larger companies…
My next step is going to be looking up each individual company on those three lists using ADVFN’s Filter X, to see whether or not they meet my criteria:
Percentage change of adjusted EPS and dividend consistently positive and greater than inflation over the past five years;
Dividend cover consistently hovering around 2 to 3 over the past five years;
Prospective yield at least 10%;
Forward P/E around 15 or lower.
If they do, I’ll mark them on my spreadsheet by filling the cell in light green, and go from there.