How to Start Investing with £100

One of the biggest myths about investing is that you need thousands of pounds to get started. You don't. In fact, starting small and early is often better than waiting until you have a large sum.

Why Start Small?

The magic of compound interest means that time in the market matters more than the amount you invest. £100 invested today could be worth more than £200 invested in 10 years.

Let's look at the numbers:

• £100 invested monthly at 7% return
• After 10 years: £17,409
• After 20 years: £52,093
• After 30 years: £121,997

Step 1: Build Your Safety Net First

Before investing, make sure you have:

• An emergency fund (3-6 months of expenses)
• No high-interest debt (credit cards, etc.)

Investing while paying 20% interest on a credit card doesn't make mathematical sense.

Step 2: Understand Your Options

With £100, you have several options:

ISAs (Individual Savings Accounts)

• Tax-free growth and withdrawals
• £20,000 annual allowance
• Stocks and Shares ISA for long-term investing

Investment Platforms

Many platforms now offer no minimum investment:

• Regular investing from £25/month
• Fractional shares (own part of expensive shares)
• Low-cost index funds

Step 3: Choose Your Investment Type

For beginners, I recommend:

Index Funds: Track the market without trying to beat it

• Low fees (often under 0.3%)
• Instant diversification
• No need to pick individual stocks

Global Tracker Funds: Invest in companies worldwide

• Spread risk across countries
• Benefit from global growth

Step 4: Set Up Regular Investing

Rather than timing the market, invest regularly:

• "Pound cost averaging" smooths out market ups and downs
• Automatic monthly investments remove emotion from decisions
• Consistency beats timing

Common Beginner Mistakes to Avoid

1. Checking your portfolio daily - Investments are for the long term
2. Panic selling during dips - Market drops are normal
3. Chasing past performance - Yesterday's winners aren't always tomorrow's
4. Ignoring fees - Small fees compound over time

Your Action Plan

1. Check you have an emergency fund
2. Open a Stocks and Shares ISA
3. Choose a low-cost global index fund
4. Set up a £100 monthly direct debit
5. Forget about it for 10+ years

Want personalised guidance? As regulated advisers, we can help you choose investments suited to your goals and risk tolerance.