Think you don’t earn enough to save and invest? Read this now

Piggy bank next to a financial report
Piggy bank next to a financial report

UK investing statistics are rather concerning. While the majority of people across Britain do acknowledge that investing is important, the proportion of the population that is actually investing on a regular basis is very low. For example, last year research from found that only 35% of British men held an investment in the UK, while for women, the figure fell to just 21%.

There are a number of reasons why investing rates are so low across the country. And one explanation that we often hear from those who are not doing it is that they believe that they don’t actually earn enough money to save and invest. They think investing is for the wealthy, and only possible on a six-figure salary.

I want to dispel that particular myth and I’m going to explain how it’s possible to start investing with an upfront sum of just £100 and then less than £6 per week.

£5.77 per week

If you think you need to be earning an enormous salary to start investing, you’d be wrong. Due to advances in technology, investing has changed a lot in the last 15 years or so, and it’s now possible to get started in the investing space with very small amounts of money.

For example, at Hargreaves Lansdown – the UK’s largest investment platform – you can put your money in a fund (a portfolio of many companies that is run by a fund manager) with a lump sum of just £100. It’s also possible to set up a monthly direct debit to contribute to your investment from as little as £25 per month, which equates to around £5.77 per week – roughly the price of a sandwich and a coffee.

Investments can grow quickly

Could this make a difference to your finances over time? Absolutely – you’d be surprised just how quickly a small investment can grow. For example, assuming a growth rate of 8% per year (which is roughly the rate that the stock market returns on average over the long run) a £100 initial investment and a £25 monthly top-up could grow to around £2,000 after just five years, according to my calculations. Not a bad result from an outlay of just over a fiver a week! Boost the monthly direct debit to the equivalent of £10 a week, and you could be looking at an investment value of nearly £3,500 after five years.

The bottom line

The bottom line, when it comes to investing, is that you don’t have to be earning a huge salary, or have a considerable cash sum set aside to get started. The investing landscape has changed dramatically in recent years and today, it’s possible to set up an investment account, and begin building up your investment, with a very small amount of money. That money will grow even if you can’t afford to increase the weekly amounts by much in the future.

Could you spare £5.77 per week to set yourself up financially for the future?

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