Investing is a great way to grow your wealth and work toward your longer-term financial goals without depending solely on your monthly income. It’s far more productive and rewarding than simply leaving money to idle in a low-yield savings account, and it’s a great complement to a strong short-term financial plan.  

But investing can seem daunting – or even totally out of reach – to some people. Here are a few things worth knowing if you feel like you’re not cut out for investing. As trusted, independent financial advisors, we’re used to assuring first-time investors 

Know what other people are doing

For first-time investors, there’s often a lingering idea that only a select group of people consider themselves to actually be investors. It can feel like a black or white situation where you’re either a fully-fledged, professional investor, or you’re not.

In reality, the majority of the UK adult population holds some sort of investment. Already, in the first few months of 2024 alone, 51% of UK adults have invested. So, why do so many people feel like investing is outside their comfort zone? 

For one thing, there seems to be something of a generational gap. In 2023, for instance, 60% of Gen Z made some form of investment, whereas just 30% of Gen X and 37% of the Baby Boomer generation invested. 

This is a stark divide and is potentially explained (at least in part) by the fact that, in recent years, more and more investment apps and digital influencers have worked to make investing more accessible, easier, and trendier

The trouble is that these services tend to oversimplify the complex and nuanced world of investing, giving some people bad experiences that may deter them from investing ever again. It’s always better to look for tailored financial advice, whatever age you are. 

Still, realising how many people out there hold investments is a great way to make the entire subject feel more accessible and open to beginners. While there will always be right and wrong ways to invest, nobody is automatically precluded from investing just because they don’t feel they have a ‘head for numbers’ or a high-risk tolerance.

That brings us on to…

Understand your risk tolerance, and know that you can always work with it rather than against it

No two investors are exactly alike – and it’s not just their capital that sets them apart. Every investor has what’s known as a ‘risk tolerance – the amount of potential loss they are willing to accept in the pursuit of returns. Some investors – sometimes referred to as aggressive investors – have a particularly high-risk tolerance and don’t shy away from investment opportunities that would send even seasoned investors running. The reason they do this is simple: higher risk entails higher rewards, but only if those risks are averted. There’s more of a chance of failure and, as a result, lost money. 

Many new investors have a very low-risk tolerance. They’re not ready to put it all ‘on the line’, and may never be. There are many low-risk investment opportunities. Of course, sticking with low-risk investments means that your ROI will be lower, and likely take a lot longer to come to fruition.

Nevertheless, unless you’re trying to make a full-time living out of investing, you won’t need your investments to be constantly delivering high payouts. 

Know that it doesn’t need to drain your spare time

It’s a relatively common misconception that having an investment portfolio means sacrificing your free hours – spending the evenings hovering over a computer screen, watching graphs rise and fall in real time. 

While there are some investors out there who do spend their evenings and weekends doing just that, keeping such a close eye on investments is rarely a good thing to do – it means facing an emotional rollercoaster as value inevitably rises and falls, and sacrificing a lot of time for something that needn’t consume your waking hours. 

Discretionary fund management is the alternative. It means handing the reins over to someone who is experienced in investing, and who understands your financial goals. It means knowing that your money is in safe hands and that you can get on with life without feeling like you need to ‘check in’ every hour, on the hour. 

Think of investing as a more rewarding alternative to putting your money into a savings account. You don’t spend half your life wondering about the interest you’re accruing or visiting the bank to check your balance. In the same way, you don’t need to be preoccupied by your investments for the rest of your life. With a trustworthy financial advisor, you can put your money to work without committing half your time to managing it. 

Risk Warning: The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.