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Getting started with investing – common questions

Investing doesn’t have to be complicated. But it’s normal to have questions when you’re starting out.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Investing doesn’t have to be complicated. But it’s normal to have lots of questions when you’re starting out.

We answer five of the most common, and highlight ways for you to learn more about getting started with investing.

This isn’t personal advice. If you’re not sure if an investment is right for you, seek advice.

What does investing money involve?

Investing involves spreading your money across different areas to help it grow over the long term. But unlike the security offered by cash, investments can fall as well as rise in value, so you could get back less than you invest.

Here are some of the main ways to invest your money:

  • Shares – you’re buying a part of a company, in exchange for a share in how it performs. They trade live on a stock exchange, where different companies are bought and sold.

  • Bonds – issued by companies or governments, to help them finance their processes. In simple terms, you’re buying a portion of their debt – in exchange for an interest payment and your money back at the end.

  • Property – sometimes called real estate. It often refers to commercial instead of residential property.

  • Funds – individual investors give their money to a fund manager – who invests all the money, choosing investments on everyone’s behalf based on the fund’s objectives. They aim to grow the money over time, produce an income or a combination of both. You’ll pay a fee to own a ‘unit’ in a fund, in exchange for the manager’s expertise and time spent investing your money.

    Guide to investing in funds

Learn more about how investing money works, and why you might want to consider it as an option.

How to get started with investing

How risky is investing?

Investing comes with risk. We know that investments go up and down in value, so unlike the security offered by cash there’s always a chance you could get back less than you put in.

But not all investments are the same and some are riskier than others. Potential returns, and the amount of risk involved in achieving these, will depend on where you choose to invest, and how long you’re prepared to invest for.

For example, investing all of your money in one small, newly started company would be considered higher risk than spreading your money across a number of different businesses, in different sectors and regions of the world. This is known as diversification.

The likelihood of positive returns is also increased by staying invested for longer. This is why we say investing is for the long term. It’s hard to predict the stock market’s rises and falls in the short term. But investing for at least five years helps give you time to ride out any ups and downs, and gives you a better chance of making money overall – though it’s never guaranteed.

Learn more about how much risk is healthy, and the different types of risk involved with investing.

WATCH OUR VIDEO ON RISK

Do I need a lot of money to get started?

It’s a common misconception that you need lots of money to start investing.

In fact, you can start building your pot from just £25 a month. Adding money every month is a flexible and easy way to grow your money. You can choose your investments or add the money as cash and pick them later. And once your monthly savings is set up, you can change where you invest, the amount you contribute, or tell us to stop your payments at any time.

See how to set up a monthly investment, or try our calculator to see how much your savings could be worth in future.

LEARN MORE ABOUT INVESTING VIA DIRECT DEBIT

Which investment account should I choose?

If you feel like you’re ready to take your first steps with investing, you’ll need to open an account. But with different options to choose from, it can be difficult to know where to start.

We offer a range of investment accounts, as the right one for you will depend on your goals. Whether you're building a pension pot or just saving for the future, we can help you find the one which suits you best.

Try our handy filter to learn more about our accounts, and narrow your options.

COMPARE ACCOUNTS

Can anyone help me to get started?

If you have any questions about getting started with investing, we’re here to help.

Maybe there’s a concept or piece of jargon you don’t understand, or just some details you’d like to check before you get going. Get in touch and we’ll always try to give you a simple explanation, or point you in the right direction. There’s no such thing as a stupid question.

Or if you’re looking for more detailed help, we offer financial advice on your terms. Book a call back or learn more about the ways we can help.

FIND OUT MORE ABOUT FINANCIAL ADVICE

LEARN MORE ABOUT GETTING STARTED WITH INVESTING


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    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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