Why investing isn’t just for the rich

Ever daydream about winning the lottery and what your life as a millionaire would look like? Or is that just me? Depressingly, the odds of winning stand at 1 in 45 million, and there is apparently more chance I’ll become a saint, find a four-leaf clover, or be crushed by a meteor. But I can still plan for a millionaire’ future…

Because what’s one thing all the wealthiest people in the world do? Invest. Whether it’s in stocks, real estate, or other assets, their money is usually somewhere making more money for them. So, my money should be making more for me too – you don’t have to be wealthy to start investing.

“The most important quality for an investor is temperament, not intellect.” — Warren Buffett

Why should I invest?

Investing is key to building long term wealth. And with all the different apps, platforms and websites available, you don’t need a lot to get started. New investors can begin with as little as £10. And it’s smart to start ASAP. Because no matter how much (or little) you’re investing, time will help it grow, thanks to our ‘friend’ compounded returns.

You can start investing with very little, but you also want to invest as much as you can. To figure out what that amount might be, check in with your budget. Once all your living expenses and necessities have been taken care of, what do you have left for fun and future finances? Because while fun today is important, remember, in the future you will want to have fun too. Another good rule of thumb is to only invest money you don’t expect to need in the next five years or so – shorter-term savings can be put into cash.

Read: 10 steps to start investing

What should I invest in?

A well-diversified portfolio is key. That is, a healthy mix of different types of investments to up the chances that you’re always holding a winner. Aka, not putting all your eggs in one basket.

New investors might consider a multi-asset fund such as Jupiter Merlin Income Portfolio. And if you want your investments to do good while they’re (hopefully) doing well, consider sustainable or impact investing, with a fund such as Liontrust Sustainable Future Global Growth. Think of it like voting with your investment dollars.

Read: how to pick a fund and prosper

Investing in things you know and understand is another great way to feel more connected with your investments and keep a keen interest. With household names like Microsoft and Visa in its top 10 holdings*, Morgan Stanley Global Brands is an option. Likewise, Schroder Asian Alpha Plus has over 33%* in technology stocks with big names like Samsung, Alibaba Group Holding and Tencent Holdings. Looking to stick closer to home? Janus Henderson European Focus has holdings in Nestle and ASML*, one of the largest semiconductor suppliers in the world.

*Source: fund factsheet, 30 April 2022

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.