The big question, how much do I need to start investing? Many people don’t start investing because they think it is only for the rich, or big wall street guys, or just because they don’t have enough money to begin with. In this article, I am going to run through how much you need to start investing.
Regardless of how much money you have, nearly everyone can start investing, right away. Now, you may not even know where to begin with when it comes to investing, in that case, you can check out my other post, How do I Start Investing, it will run over some of thing things that can get your foot in the door of investing.
Anyway, back to the main point, how much do I need to start investing.
You can begin investing with as little as £1, yes, £1! There are a number of different companies who have no minimum deposit, which means you can basically start investing with as little as you want, after all, every little helps, right? Wealthify is one of these companies.
Think of it like this, for every £100 you invest now, in 35 years time, that £100 could be worth £2400, and that is just if your investment matches the stock markets historical performance.
You can also start investing monthly, like I do. Every month, using the 50/30/20 budget, I allocate 20% of my savings to investing, well, just over 20%. I spread my money over a number of different investments, which are outlined in my post, My Current Investments.
Most online investment companies will offer a direct debit, or standing order feature, meaning you can automate the process, like myself. Investing on a monthly basis has many advantages, you won’t forget to invest money, it can compound better due to monthly payments, you stick with your budgeted figure better if it is on auto pilot, as you will be less tempted to change the figure you want to invest.
You can also invest with a lump sum if you wish. I have a friend who does it this way, every time he has extra cash, he deposits it into his investment account. For me, this way is not as good as depositing monthly, as it is less consistent, and you may not be able to keep to your targets, but, if it is the only way you are able to invest money, by all means, do it! It is better than not investing at all.
So, the bottom line is, you can begin investing with less than the cost of a tank of fuel, wether it be with a robo advisor, or a high quality fund, the options are endless, but, make sure you start investing sooner, rather than later. Remember, check out my guide, how to invest.