Investing for beginners can be daunting but can be a great way to grow wealth and over time, it can beat cash savings.
We speak to Kalpana Fitzpatrick, author of Invest Now - and digital editor of our sister site Moneyweek - and what you need to know. And how it's easier than you might think.
Investing for beginners
When is the best time for people to start investing?
I often get told by people that they are not ready to invest because they do not have a lot of money or that it is for people with loads of financial knowledge.
But, investing doesn't actually require large sums of money and neither does it require you to be a financial whizz. You can start investing with as little as £1 and with the likes of robo-advisers (platforms that make all the investment decisions for you) you can invest with ease.
The main thing is to start early so that your investments have time to grow - it can take a good 5 to ten years to let your money grow. On that note, only ever invest money that you do not plan to use for the next 10 years or so as investing is for the long-term future.
Before you invest, make sure you:
- Have emergency savings first
- Paid off debt like credit card or loans
- Understanding that investing will see your money go both down and up in value, but stay invested and over time, you should see an upside.
People associate investing with gambling, how do they both differ?
This is a common myth that stops people from investing.
When you invest, you are not making a bet in hope of a win or loss probability.
You are investing with a company that is trying to grow and when it does, you benefit.
What are the best and worst investments you’ve made?
I think investing can be a learning curve, and unfortunately, when I started I didn't have a book to learn from - so it took me a lot longer to learn and get going. My mistake was really not to have started sooner.
Anyone who can afford to stash a small amount away each month should invest it because you will significantly benefit from compound interest over time.
And right now, with high inflation, even with interest rates rising, your cash is losing value, so investing is a must.
How do you find time to manage your investments on top of a full-time job? Is this manageable by anyone?
This is another myth - you do not need to manage investments on a day to day basis - leave that to traders.
I explain in my book how to pick an investment provider and the types of funds you can invest in.
Dumb question, but in your book you say that investing is a path to achieving your financial goals, what are financial goals? and what is realistic for most people?
It's not a dumb question! Everyone is different. Some people want to retire early or have a more comfortable retirement, for others it is buying a bigger home or maybe even moving abroad. It could be that you're saving for your children or grandchildren even.
For me, it’s security and not always having to work for money, because when I invest, my money is working for me.
Fitzpatrick’s book Invest Now: The Simple Guide to Boosting Your Finances, Heligo Books, is available on Amazon and other bookshops now.
Look After My Bills Newsletter
Get the best money-saving tips, tricks and deals sent straight to your inbox every week. Make sense of your money in partnership with The Money Edit.
Vaishali graduated in journalism from Leeds University. She has gained experience writing local stories around Leeds and Leicester, which includes writing for a university publication and Leicester Mercury.
She has also done some marketing and copywriting for businesses.
When she is not writing about personal finance, Vaishali likes to travel and she's a foodie.
Octopus Energy relaunches energy tracker deal – we explain what you need to know and if it could save you money
If you’re an Octopus Energy customer, you may be able to save on your energy bills with the relaunch of its tracker deal. We look at how it works
By Sue Hayward Published
Three energy firms pay £8m in switching compensation - has your provider paid out?
More than 100,000 customers have received compensation after changing providers, but is now a good time to switch energy suppliers?
By Tom Higgins Published
How to invest in property - without actually owning any
We explain how to invest in property without having to actually own any bricks and mortar
By Marc Shoffman Published
Investment trends 2022 - where the experts will be putting their money
Here are the investment trends for 2022 and where the experts are looking to invest their cash in the New Year
By Ruth Emery Published