As financial advisers, we often hear people say, “I’ll start investing when I earn more,” or “Investing is too complicated for me.” While these concerns are common, delaying your entry into investing could mean missing out on opportunities to grow your wealth and achieve financial independence. Today, I want to break down why starting your investment journey now is one of the wisest decisions you can make, regardless of your current financial situation.

1. The Power of Compounding

Albert Einstein called compound interest the “eighth wonder of the world”. Simply put, compounding allows your money to grow over time as your investment gains generate additional gains. The earlier you start, the more time your money has to work for you.

Here’s a straightforward example:

• If you invest £4,000 a year starting at age 25 and earn an average annual return of 7%, you could have over £800,000 by age 65.
• If you wait until 35 to start, that same annual investment would grow to only about £400,000.

Time is the secret ingredient, and the sooner you begin, the more significant your results will be. (Equally, it is never too late.)

2. Inflation Doesn’t Wait

Inflation erodes the purchasing power of your money over time. What £100 buys today might only get you £80 worth of goods in 10 years. Investing in assets like shares, bonds or property can help you keep pace with or even outpace inflation, ensuring your money retains its value.

Keeping your savings solely in a traditional savings account may feel safe, but with interest rates often below inflation, you’re effectively losing money in the long term.

3. You Don’t Need to Be Wealthy to Start

One of the biggest myths about investing is that you need a lot of money to begin. Today, you can start investing with as little as £50 or £100, thanks to advancements like fractional shares and apps that cater to new investors. Many platforms allow you to set up automated contributions, making it easier to stay consistent even with a modest budget.

Remember, the amount matters less than the habit. Building the discipline to invest regularly will pay off over time.

4. Diversification Minimises Risk

Worried about losing money? It’s a valid concern, but there are strategies to manage risk. Diversification – spreading your investments across different asset classes like shares, bonds and property – helps protect you from the ups and downs of any single market.

Additionally, the longer your investment horizon, the less risky investing becomes. Historically, markets have shown an upward trajectory over extended periods, despite occasional downturns.

As financial advisers, we can help you select an investment to match your objectives and the level of risk you are willing to take.

5. Achieve Your Financial Goals

Investing is not just about building wealth; it’s about achieving your life goals. Whether it’s buying a home, funding your children’s education or retiring comfortably, investing provides a roadmap to reach these milestones. By starting now, you can set realistic goals and make steady progress towards them.

Final Thoughts

By investing now, you’re taking control of your financial future and putting yourself on the path to financial freedom. It doesn’t matter whether you’re 25 or 85; the best time to start investing was yesterday. The second-best time is today.

If you’re unsure where to begin, consider consulting a financial adviser who can help you develop a personalised strategy based on your goals, risk tolerance and current financial situation. Remember, the key is to start – even small steps can lead to significant outcomes over time.

Your eventual income may depend on the size of fund when accessed, interest rates and legislation.