This is why you need to start investing in 2025 - and you don't need to be a millionaire

Ellie Austin-Williams
·4-min read
Hand putting coin into piggy bank on cream coloured background.
Invest in You (Getty Images)

You work hard for your money, so it's only natural that you want your cash to go as far as possible. Yes, saving for a rainy day is essential, but once you've got that covered, it's time to think about how to really make your money work for you. It's time to think about investing your money.

If the idea of investing often sets off confusion, overwhelm and fear, you're not on your own. A quick Google search for the word 'investor' continues to bring up outdated images of men in suits, but times have changed and here's the good news: investing is nowhere near as tricky as it might seem and the benefits may be bigger than you expect.

Here are five reasons why this is the year to start investing for your future.

Confident young Asian woman with smartphone looking out through window while sitting in a cafe having coffee. Making a personal financial plans and investment decisions.
Investing is no longer a man's world. It's nowhere near as tricky as it might seem and the benefits may be bigger than you expect (Getty Images)

Put your money to work

You show up every day and put in time and effort to earn your money, so it only makes sense to make your money work just as hard for you. Investing can require a mindset shift, as it’s a long-term strategy and there is an element of unpredictability that might require wrapping your head around.

Take Back Control

The key to remember is that money is simply a tool and not an end goal. Think of money as a tool which you can use effectively to create the lifestyle you want and make it work for you.

Risk can bring reward

Unless your savings account is earning interest at a rate above inflation, the reality is that your actual purchasing power decreases as years pass. Inflation is the rate at which prices increase over time and unless your bank balance increases at the same pace, your money will buy you less in five years than today.

Although a savings account gives you the knowledge of how much money you have, there is a risk that the value of that money erodes over time. When you invest, the value of your investments can go down as well as up and no returns are guaranteed, but the upside is that over the long term you benefit from the potential for far greater returns on your money than any savings account.

Man and woman hand consider on calculator expenses of family budget against home background. Lending purchase rental housing mortgage concept
Investing is a long-term strategy and there is an element of unpredictability that might require wrapping your head around (Getty Images)

You don't need to be a millionaire

One misconception about investing is that you need to have a load of cash in the bank to get started. Rewind two decades and investing was reserved for the rich, but with the emergence of digital investing platforms then anyone can start investing from the comfort of their own home.

Many apps give you the option to start investing with amounts as small as £1, and typically you can set up a direct debit to keep adding to your investment pot gradually. Before you know it, the money will be working behind the scenes for you without you having to lift a finger.

The sooner you start, the better

Time is your most valuable asset as an investor. Getting started now, no matter how much you have to invest, can reap rewards down the line. When you invest your money, you benefit from the effect of compounding.

Compound interest means that when you save money, as well as earning interest on the savings, you also earn interest on the interest itself. Initially, the impact of compounding may not seem significant but over many years it can be huge.

Remember, you can always increase the amount you invest later down the line.

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One misconception about investing is that you need to have a load of cash in the bank to get started (Getty Images)

Futureproof your retirement

The safety of final salary pension schemes enjoyed by previous generations is becoming a thing of the past, so it's up to us to work out how to fund our retirement down the line if we wish to stop working in the future.

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Along with changes to workplace pensions on offer, as a nation, we're living longer and we cannot rely on the state to fund our later years. Investing from a young age provides the best opportunity for your money to grow over time, riding out any fluctuations in the stock market and setting you up for a relaxing financial future.

Please note this article is for educational purposes only and does not constitute financial advice. For advice, please speak to an independent financial advisor.

Ellie Austin-Williams is the author of Money Talks, a Lifestyle Guide for financial wellbeing. Find her on Instagram at @thisgirltalksmoney.

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