When you’re ready to invest, one of the first things that probably comes to mind is “how much?” Is there a right amount to start with?
The good thing is that there’s no set amount you need to be investing to get started. Any amount is better than no amount at all. These days you can start with as little as £1 or as much as you can afford to.
But, there are a couple of things to think about before investing. It’s important to understand:
- what your goals are
- when you’re going to need to access your money
If your coach has built you a money plan, you’ll see exactly how much is right for you to invest. But it’s a good idea to think about the following questions on your investing journey:
- What are your goals? Can you put them on a timeline? Are they 12 months away? Or are they coming up in the next 2 to 5 years? Are they 10 years away?
Investing is best for the goals that are more than 5 years away.
If your goals are less than 5 years away, then it’s best to keep this money in cash and optimise your savings to ensure maximum interest instead. This is because the stock market fluctuates and it can be a bit risky to rely on investments in the short term.
If your goals are more than 5 years away, investing is a great option as it’s one of the best ways to grow your wealth in the medium to long term. Generally, the longer the timeframe you have for investing, the better.
- Do you have money set aside in an emergency fund?
If you already have money set aside for emergencies, you can invest what you have left at the end of the month.
If you don’t have an emergency fund yet, you might like to put some money towards that because it’s best to have one set up before investing.
- What do you have left over in your budget at the end of the month? This is money that you can invest.
If you have a money plan, Propeller will tell you exactly how much you can invest.
- Are there parts of your budget you could trim back to invest for future you?
If you want to focus on growing your money for the future, you might want to review your budget. Check to see if there’s anything you’re spending money on that isn’t bringing you joy. If you find some extra money, consider investing it so it can grow.
