Jordan-Invest: Making Your Money Work for You: The Basics of Getting Started with Investing

Wednesday, May 28, 2025

Making Your Money Work for You: The Basics of Getting Started with Investing

Have you ever wondered how some people grow their money without working extra hours?

The answer often lies in something called investing. You don’t need to be rich, wear a suit, or watch financial news every day to get started. In fact, investing is something anyone can do—even with small amounts of money.

This article will walk you through what investing is, why it matters, how to start, and how to stay on track. We’ll keep things simple and practical, so by the end, you’ll have the confidence to take your first steps.

Think of investing as planting seeds. Instead of spending all your money today, you put some of it into things that can grow over time. These things might be stocks (shares of companies), property, or even lending money through bonds. Your goal is to earn more money in the future—just like a tree eventually gives you fruit.

Unlike saving (where you simply store money in a bank account), investing involves some risk. But with risk comes the chance of greater rewards. The key is learning how to manage that risk.

1. Why Should You Invest?

If you just keep money in a savings account, it grows very slowly—maybe 1% a year. But prices for things like food, rent, and transport usually go up over time. This is called inflation. If your money doesn’t grow faster than inflation, it slowly loses value.

Investing gives your money the chance to grow faster than inflation. It helps you build wealth over time so you can reach goals like:

· Buying a home

· Starting a business

· Sending your kids to university

· Retiring comfortably

Even small investments, made regularly, can grow into something meaningful.

Meet Cynthia:

Cynthia is 28 years old and works as a graphic designer. She wants to save for the future but doesn’t know where to begin. She decides to start investing £50 a month in a fund that holds many different company shares. She sets this up automatically from her bank account.

Over time, Cynthia doesn’t try to pick the best stocks or watch the market every day. She just keeps investing her £50 each month. Ten years later, thanks to the power of compounding (earning money on top of the money you’ve already earned), Cynthia has built a small but growing investment pot that’s helped her feel more secure about the future.

2. Types of Investments

Let’s look at a few common ways to invest:

A. Stocks (Shares)

When you buy a stock, you own a small part of a company. If the company does well, the value of your stock can go up. You might also receive payments called dividends.

B. Bonds

A bond is like a loan. You lend money to a company or government, and they pay you back later—with interest. Bonds are usually safer than stocks but grow more slowly.

C. Funds (Mutual Funds or ETFs)

Funds gather money from many people to buy a mix of stocks or bonds. This helps reduce risk. You don’t have to pick individual companies—experts do it for you.

D. Property

Buying property to rent out can be another way to invest. It often needs more money upfront, but it can bring regular income and grow in value.

3. Starting is easier than you think

Here’s a step-by-step plan:

Step 1: Set a Goal

Ask yourself what you’re investing for. Retirement? A house? Your child’s education? Your goal will guide how you invest.

Step 2: Build a Safety Net First

Before investing, save up an emergency fund—at least 3 to 6 months’ worth of living costs in a savings account. This protects you if something unexpected happens.

Step 3: Choose Where to Invest

You can open an investment account through banks, apps, or online platforms. In the UK, you might choose a Stocks and Shares ISA (Individual Savings Account) which allows your investments to grow tax-free.

Step 4: Start Small and Regularly

You don’t need a big lump sum. Start with as little as £25–£50 per month. What matters most is being consistent.

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4. Make It Easy: Automate Your Savings

One of the smartest things you can do is set up automatic transfers from your current account to your investment or savings account each month. This way, you save without having to think about it.

Think of it like paying a bill—to your future self. If your salary arrives on the 1st, schedule a transfer for the 2nd. You won’t miss the money, and over time, your savings will grow steadily.

5. Be Patient and Think Long-Term

Markets go up and down. That’s normal. But over time, they tend to rise. Don’t panic when you see a dip. Stay calm and keep going. Investing is a marathon, not a sprint.

The best time to start investing was yesterday. The second-best time is today.

Frequently Asked Questions

1. How much money do I need to start investing?

You can start with as little as £25–£50 per month, depending on the platform you choose.

2. What’s the difference between saving and investing?

Saving means storing your money (usually in a bank account), while investing means growing your money by putting it into things like stocks or funds.

3. Is investing risky?

All investments carry some risk. But you can reduce it by investing in a mix of assets and holding them for the long term.

4. How do I know what to invest in?

If you’re not sure, consider a fund that spreads your money across many companies. This helps reduce risk.

5. Can I lose all my money?

It’s unlikely if you’re investing in diversified funds and not putting all your money into one company. Still, no investment is 100% safe.

6. What is compound interest?

It’s when you earn money not only on your original investment but also on the money your investment has already earned. It helps your money grow faster over time.

7. Should I pay off debt before investing?

It depends. If your debt has a high interest rate (like credit cards), it’s better to pay that off first. Low-interest debt, like some student loans, might be okay to keep while investing.

8. Can I take my money out anytime?

Yes, but some investments may take a few days to sell, and the value may be lower if the market is down. That’s why it’s important to invest money you won’t need immediately.

9. What’s a fund?

A fund pools money from many investors to buy a collection of stocks or bonds. It’s managed by professionals and helps spread out risk.

10. What does “set up automatic transfers” mean?

It means scheduling your bank to move money regularly—like £50 every month—from your main account into your savings or investment account without needing to do it manually each time.

Final Thought

Investing isn’t just for rich people or financial experts. It’s for anyone who wants to grow their money and plan for a better future. Start small, be consistent, and remember—you don’t have to be perfect. You just have to get started.