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how can I start investing with just £100 a month

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by

Wojciech
in
Wojciech

Wojciech

Diploma for Financial Advisers
Diploma in Accounting
Member of London Institute of Banking and Finance

When you think about investing, you might assume it requires thousands of pounds to get started. How can I start investing with just £100 a month? In this guide, we’ll show you how to make the most of your money and grow it over time, even on a modest budget.

Why Start Investing?

Investing is one of the best ways to grow your wealth over time. While saving money in a regular bank account is a great habit, the interest rates are often too low to keep up with inflation. By investing, you can aim for higher returns and work towards your financial goals, whether it’s buying a house, funding your retirement, or achieving financial freedom.

How to Start Investing with Just £100 a Month

  1. Set Clear Goals Before you invest, think about what you’re investing for. Are you saving for retirement, a rainy-day fund, or a big purchase? Knowing your goal will help you choose the right type of investment.
  2. Choose an Investment Platform There are many online platforms in the UK that allow you to start investing with as little as £25. Look for a platform that offers low fees, a user-friendly interface, and a variety of investment options. Examples include:
    • Vanguard
    • Hargreaves Lansdown
    • AJ Bell
  3. Consider Index Funds or ETFs Index funds and ETFs (Exchange-Traded Funds) are excellent choices for beginners. They’re affordable, diversified, and managed passively, which means lower fees. For example, an index fund might track the performance of the FTSE 100 or S&P 500, giving you exposure to a wide range of companies.
  4. Automate Your Investments Most investment platforms allow you to set up automatic monthly payments. By investing your £100 every month, you’ll benefit from pound-cost averaging. This means you’ll buy more shares when prices are low and fewer when they’re high, which can help smooth out market fluctuations.
  5. Diversify Your Portfolio Don’t put all your eggs in one basket. Spread your investments across different industries and regions to reduce risk. Many platforms offer ready-made portfolios tailored to different risk levels, making diversification simple for beginners.

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Keep These Tips in Mind

  • Start Early: The earlier you start investing, the more time your money has to grow. Compounding—earning returns on your returns—can significantly boost your wealth over the long term.
  • Stay Consistent: Markets can go up and down, but staying consistent with your monthly investments will help you ride out the highs and lows.
  • Review and Adjust: Periodically review your investments to ensure they align with your goals. As your financial situation changes, you may want to increase your contributions or adjust your portfolio.

The Bottom Line

Starting small can lead to big results over time. With just £100 a month, you can begin your investment journey and build a brighter financial future. Remember, the key is consistency and patience. If you’re ready to take the first step, why not explore some investment platforms today?

How can I start investing with just £100 a month? It’s simpler than you think. Set your goals, choose a platform, and start investing in your future—one small step at a time.

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