We all have to start our investing journey somewhere. It’s difficult to envisage today but even billionaire investors like Warren Buffett once didn’t know the first thing about stocks.
Fortunately there’s never been a better time to start investing than today. Yet large numbers of people are still reluctant to get on board the investing train. This means they could be missing out on the chance to make some serious money with their hard-saved cash.
“I don’t know where to start”
New research from AJ Bell’s investing app Dodl illustrates how reluctant Brits remain to invest for wealth.
According to its survey, a sizeable two-thirds of UK adults don’t have an investment account like a Stocks and Shares ISA or a pension that they manage themselves.
This is despite almost all (95%) of these people saying that they have money to invest. The average amount of savings such individuals had to work with came in at a healthy £3,016.
Dodl said that of the two-thirds of people who didn’t have an investment account, their main reasons for not owning one were:
| Reason | % of respondents |
| “I don’t know where to start” | 37% |
| “It’s too complicated” | 18% |
| “I don’t know what to invest in” | 14% |
| “I can’t afford to” | 9% |
| “I don’t know who to trust” | 5% |
Investing can deliver BIG returns
Parking one’s cash in something like an easy access cash account instead of investing it can be an expensive mistake.
Emma Keywood, senior product manager at Dodl, comments that “although interest rates being paid on cash are increasing, they are still low in real terms and are significantly below inflation”.
Dodl says that an easy access account with a 1.5% interest rate would turn £3,016 into £4,062 over a period of 20 years.
By comparison, that £3,016 could be turned into a far-superior £8,002 instead if put in an investment account instead, Dodl says. That’s based on a 5% investment return each year after charges.
Why I buy UK shares
Getting started with investing can be daunting. Understanding how markets work, setting up an investment account, and then finding the best stocks to buy can be time-consuming and complicated work.
But those Dodl figures show that the hard work can be worth it. Investing in UK shares has long proved to be an effective way for people to generate long-term wealth.
It’s why I invest almost all of my spare cash in my own Stocks and Shares ISA. It might be a bit riskier than just stashing my money in a cash account, sure. But the superior returns I could enjoy make investing in UK shares a much better option for me.
And as I said at the top of the piece, there’s never been a better time to start investing in stocks. There’s a wealth of information out there from experts like The Motley Fool to help me on my journey.