Top tips for investing your money

Have a look at our top tips on what to think about when starting to invest.

1. Goals

Be clear about what you’re investing for. Investing is generally most appropriate for medium and long-term goals (at least five years). If you want access to your money before that, you might want to think about saving instead.

2. Payments

Before you start investing, first make sure that you can afford your essential living costs, as well as any debts. It’s also a good idea to make sure you have some savings to cover emergencies.

3. Investment risk

Have a think about how much risk you feel comfortable taking with your money. You should also consider your other financial commitments when deciding how much risk to take. If you don’t want to or can’t take any risk with your money, then investing may not be for you right now.

4. Timescale

The longer your money is invested, the more opportunity it has to grow in value and reach your goal. Each year, not only will the money you invest potentially grow in value, you’ll also potentially get growth on any previous growth. This is commonly known as ‘compounding’ and, over longer time periods, it can make a significant difference to the value of your investments.

Read our blog post: What Einstein tells us – reinvest your income >

It’s important to remember though that the value of your investments can fall, and you may get back less than you invested.

5. What you’ll get back

The final value of your investments will depend on three main factors - how much you pay in, how your investments perform and how long you’re invested for. Generally speaking, the more you pay in, the better your investments perform and the longer you can keep your money invested, the more you're likely to get back at the end.

Top tips for investing your money

Remember though that the value of your investments can fall as well as rise, and they may be worth less than you paid in, even over longer time periods.

6. Mix it up

Putting all your money in one type of investment can be a risky strategy. You can help reduce that risk by spreading your money across a mix of investment types and countries. Different investments are affected by different factors - economics, interest rates,  politics, conflicts, even weather events. What’s positive for one investment can be negative for another, meaning when one rises another may fall.

Read our blog post: The importance of diversification and correlation in investments >

7. Be tax efficient

You can do this by putting your money into your pension or using up your ISA allowance.

Find out more about tax efficient savings and investments >

8. Review, review, review

Make time to regularly review your investments to check they’re on track to meet your goals.

Find out more about managing your investments >


The information contained here should not be regarded as financial advice. The right option for you will depend on individual circumstances.

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