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Are tech workers investing for their future? 

Personal investments app

Last year, reports revealed that starting salaries for tech workers in the UK are more than 60% higher than the average pay. In spite of the cost of living crisis, many tech employees are able to put away some of their earnings as savings, make personal investments and use financial planning to make the most of their income.

Employees in the tech sector are often already engaged in a culture of investment without having to actively seek it out; many tech companies offer employee equity schemes, and startup fundraising can introduce workers to concepts and trends around valuations, share prices and investment terms.

Nonetheless, anecdotal evidence suggests that even investment-literate tech workers struggle to find the right opportunities and investment routes, or are held back by a number of barriers like lack of financial knowledge and the time it takes to research options.

For some, the risk of investing can feel too high. Polly Arrowsmith, marketing and finance director at drone business Cyberpal who formerly ran her own tech business says she was surprised by little interest among her 18 employees about investing, which extended even to opting out of a company share scheme.

It’s easy to understand why, since market volatility can affect their overall compensation if company shares are a key part of the remuneration package. For those who do enroll, such schemes introduce employees to the value of holding stocks, and some workers will take that approach to their disposable income, dealing with risks from volatility by diversifying investments.

“Most people working in tech are fully aware of how important it is to invest their disposable income as early as possible, rather than turning their attention to financial planning later in their career and realising they have lost a lot of time,” says Felicia Hjertman, founder and CEO at investment platform TILLIT Invest.

“Even so, tech employees – like many others – can be held back by common barriers to investing, struggling to feel fully in control of their investment decisions, particularly when aiming to align their investments with their values.”

Investing in practice

Among the population generally, 37% hold investment products, according to the Financial Conduct Authority. The most common investment is direct equity holdings (21%) followed by stocks and shares ISAs (17%) and investment funds (9.3%).

Though there isn’t similar data available specifically for the tech sector, it’s reasonable to assume that while the overall proportion of those with any investments is higher – due to higher than average income – the breakdown of specific investment types is broadly similar.

Gaming journalist and founder of GameClubz, Vlad Susanu, invests specifically in tech and gaming companies, including buying stocks in big companies and backing promising startups.

He says: “Thanks to analysing new innovations in my job, I feel well-positioned to gauge potentially profitable investments. But things change constantly, so I keep researching too. Understanding emerging trends better equips me to fund projects shaping our future.”

But not everyone feels confident to translate their work into personal investments. Polly Arrowsmith shares that her partner, who also works in tech, is a “great stock picker but is fearful to invest”, using only a practice trading account which shows he would have made a 273% return if he’d actually invested.

To boost his confidence in investment decisions, Matt Cranfield, founder of YourSimpleHosting, turns to tools and resources which can enhance his own knowledge. 

“Figuring out investments can be complicated,” he says. “I use tools from financial experts and online platforms for real-time updates and to easily compare options. I also try to improve my knowledge over time. That guarantees that, as with my tech work, my decisions are based on data and forward-thinking considerations.”

Cranfield balances his desire to ‘put his money to work’ and invest for his retirement with the desire to ensure his investments support innovation, sustainability and fair leadership.

“Having different types of investments means my money is safe from big risks but also helps people and the economy,” he adds.

With a range of interests and expertise across the tech sector, approaches to investment are often directly related to tech workers’ personal experience.

“Of course, your approach to investing is personalised,” says Susanu. “Mine mirrors my background. But finding ways for wealth management to synergise with individual strengths and passions seems smart. It adds fulfillment which I think everyone can benefit from discovering in their own way.”

Overcoming barriers

A common challenge for busy tech workers is the time and resource it takes to make informed investment decisions. Susanna, a life coach and former customer success manager in tech, uses investment platform TILLIT Invest and says: “It’s given me more options and power in my hands to make well-informed decisions. The challenge is just creating time to make those decisions.”

For those like Susanna who nonetheless do put aside the time needed, they can experience ‘the paradox of choice’, says TILLIT’s Felicia Hjertman.

Another TILLIT user, Sara, who works in online marketing, explains: “The limited universe of funds has reduced the choice paralysis I struggled with for a long time, and the detailed but accessible descriptions of funds have been very helpful in building my confidence in investing.”

As of September 2022, there are over 5,579 funds, investment trusts and ETFs available to UK personal investors. The benefit is that with so many options, there’s almost certainly a good fit for someone looking for investment opportunities. But the problem is that the choice can be overwhelming and leave people feeling like they were not able to fully assess all the possible options, even when they do overcome decision paralysis and choose to invest.

TILLIT tackles this challenge by curating and selecting investment opportunities using the expertise of real fund managers. Not only does this reduce the choices by selecting only the best investment opportunities but it also enables TILLIT to provide education back to users – both on specific opportunities and investment strategies more generally.

“One of my favourite features is the interviews with fund managers, it allows you to get to know who is investing your money and see whether they align with your goals,” says TILLIT user Elliot, a technology transformation consultant.

“The educational content on each fund and other content, such as the recent guide to sustainable investing, have taught me a lot since opening my account with TILLIT.”

The “curated and explained” aspect of TILLIT’s platform helps resolve another barrier to decision-making: a lack of clarity when comparing different funds. Susanna adds: “The philosophy of providing customers with rich data about the various funds equips us as customers with valuable information to make smart investment decisions.”

Just like the tech workers who spoke to UKTN about their investment approaches, many others aren’t just looking to maximize returns, but also want to find investments which align with their values and ideas. 

This isn’t always easy when funds and products aren’t specifically labelled according to values or interests. Platforms like TILLIT’s make sure that the curation is also supported with the right user experience, allowing users to search and filter by interests and values and deep dive into each fund to truly understand how the investments are sustainable, for example.

Elliot explains that he chose TILLIT for this reason. “I was looking to move my investments to an investment platform that had an attractive UX, allowed me to choose the funds I invested in but also gave me easy-to-understand explanations of the funds and their objectives,” he says.

Polly, who is 56, feels that overcoming such barriers to investing is crucial, particularly in planning for retirement.

“I would really stress that Government pensions are not actually enough to live on,” she says. “It really is imperative that you do invest for your future, if you possibly can.”

For tech workers who want to do more with their disposable income, the curated platform TILLIT offers full control and understanding over investments and provides opportunities to invest for the future.

Learn more about TILLIT here

Sponsored by TILLIT.