How investing changed my life

Investing involves exchanging cash for financial assets (such as bonds, shares, fund units, etc.) or real assets (such as property) which is very different to savings!

The average growth rate in the stock market is 7% per year (way higher than any % a high street bank will give you!)

In my early days, I’d be scared of investing because I didn’t want to lose my money (known as: loss aversion in behavioural science) but the more I read, the more I understood – the chances of your money disappearing completely is less than 1% and if you diversify well, even lower!

Trust me – everyone feels that way initially!

The moment I realised the power of exchanging my hard-earned cash for assets which would appreciate in value and give me a capital gain, as well as income which funds my lifestyle, it was a gamechanger.

“So, I buy something, it goes up in value and I can sell it for higher tomorrow? YES, PLEASE.”

I’m not saying investing will solve all your problems but what I am saying is that take your risks early in life – the closer to retirement, the less risks you are able to take with your money. Why not focus on the upward potential rather than the risk?

I remember when I was 18 and realised that if I kept my money in the bank, the bank would pay me interest for it – I remember thinking, free money? Why would I NOT?

Well, when I realised that investing was what most rich people did in a really savvy way, I knew I needed to know more.

A couple of years later and 10s of personal finance books later, I can’t advocate for investing early enough – especially women!

There’s a gender pay gap we are all aware about – what less people know, is that it means women end up with significantly lower pension pots than their male counterparts. Also, women take more breaks during their career also leading to lower pension pots. Now, I know you’re thinking, pensions? *yawn* “I’m here to read about investing…”

BUT your pensions are invested, every month you put money into a ‘fund’ which receives your pension money (‘monthly contribution’) and pension fund managers buy assets instead of holding cash. Therefore, pension funds are some of the most influential institutional investors out there – they manage A LOT of money.

Also, not only do women earn less and retire with less money, we live LONGER so we need to spread that money over more years.

Learning about investing changed my life – it empowered me to take control of my finances and stop ‘hoping things would work out’ but making sure they did.

Are you ready to start?