Disclaimer: I’m aware this is a sensitive topic. To be clear I’m not an expert or a financial advisor. Anything I say should not be taken as financial advice. This is my own personal experience of investing in the UK.

Mr Money-Side Up

There are a lot of myths out there when it comes to investing and many of them are self-imagined. I wrote this article to help remove one particular barrier to investing. This is the myth that you need to be wealthy or have a lot of money to invest. Here are 5 reasons anyone with less than £100 can invest in the stock market.

1. The Minimum Amount Is As Low As £25 To Invest

Investing does not need to be expensive. You do not need £100,000 to buy into a fund, or even a £1,000. In under 5 minutes I found an account on Fidelity Investment finder which requires an initial payment of just £25 to set up the account. This is the Fidelity Index US Fund P Accumulation and is fund designed to track the US S&P 500.

The S&P 500 stock market index comprises of 505 common stocks issued by 500 large-cap companies traded on the American stock exchange. It covers approximatly 80% of the American equity market with the more valuable comanies accounting for relativey more of the index.

Therefore, with just £25 a month and an ongoing fund charge of just 0.06%, you can start buying into a fund which covers the majority of the US stock market.

2. You Don’t Need To Pay A Financial Advisor To Invest

You don’t need a fancy degree in wealth management or to spend money hiring a financial advisor. You can set up an account with a well-established company such as Fidelity in under 30 minutes.

If you are feeling particularly overwhelmed by the number of fund options then I would recommend the Fidelity Pathfinder. In less than two steps you can have a fund selected, based on your risk tolerence and cost focus.

If you would like to read some of the basic principles of investing in the stock market, you can read my article: Where To Start In The Scary World Of Investing: Simple First Steps To Get Started.

3. You Don’t Need Expensive Software To Buy & Sell Stocks

There are many people online that create a complex environment for investors. They advertise or recommend complex software to track the latest trends or help you pick stocks based on all kinds of different factors.

In my opinion, keep it simple. Invest in index funds and review the performance reasonably infrequently, as the more frequently you check, the more likely you are to see a decline in it’s value.

If you would like to read more about this, and my other rules for investing in the stock market you can read the following article: My 10 golden rules for survival in the stock market.

4. How Much Should Beginners Invest In Stocks?

A common question is: “How much money should you invest to begin with?” My answer is specifically related to index fund investing because my account has a £50 minimum investment, which can be paid in monthly, quaterly, 6 monthly or annually. This can be paused or deferred with the click of a button. Beyond this, it is entirely up to you, your finances and financial goals.

This answer, of course, does not relate to purchasing individual stock. In these instances purchasing just one stock can vary greatly. For example, try to purchase a Berkshire Hathaway stock is will set you back $305,085 per share (as of 07.08.2019).

5. Do I Need To Time The Stock Market Or Strike Lucky?

Time in the market is more important than timing the market. You don’t need to find the next hot stock, industry, or geographical location.

You just need to play the law of averages and be confident that the stock market will continue, as always to go up. Historically the S&P 500, for example, has returned 10% since it’s initial conception in 1926.

This growth is in spite of the boom and bust cycles and various negative global events, including two world wars. Indicating that you don’t need perfect economic conditions to get strong positive returns.

Therefore the game is simple, pick a diversified fund and invest for the long-term.

Final Thoughts On Why Anyone Can Invest

I believe anyone can invest. In fact, the late Jack Bogle poineered index investing to be accessible to ordinary people. Therefore, you don’t need to have a high income or a super-sized lump sum to invest.

The every day person can start small and attempt to invest even a minimal amount of money. However, the long term result of this can be an exponential increase in wealth due to the effects of stock market returns and compounding over time.

The returns you can receive from buying into an index fund are unlikely to be any less than if you were to pay extortionate fees to a fund manager. So keep the costs low and this will further help you to achieve better results from investing.