A beginner’s guide to investing for every decade of your life – turn £25 a month into £67k & top funds picked by experts

WANT to get rich? Investing is your best shot – unless you win the lottery, of course. The trick is to start as early as possible so your money has longer to grow, but it’s NEVER too late. We’ve compiled the ultimate beginner’s guide to investing whatever your age – including the EXACT investments you should consider. Investing while you’re young could help you build up a pot worth thousands of pounds Credit: Getty As you get older, your priorities will change – and so will your investment strategy Credit: Getty Ideally, you should start investing as soon as you can because your money has time to grow through the magic of compounding. Compounding is essentially a snowball effect – once you start earning returns on your investments, those returns will generate their own returns. This turbo-boosts your savings. If you started investing £25 a month in your 20s, with an average return of 5%, you’d have a huge £66,716 by age 70. But if you started in your 50s, you’d have £10,276 by the same age – which is £56,440 less. Investing will usually make your money work harder than it would if you stashed it in savings. The average easy-access savings rate is around 3%. If you had saved £25 a month in your 20s, you’d have £34,733 by 70 – £31,983 less than what you could bank by investing. But you can start investing whatever age – don’t worry if you feel like you’ve missed the boat, you haven’t. Know the risks IF you have enough money in your emergency fund and are ready to invest then the returns can be huge. But remember, the stock market can fall as well as rise. The FTSE 100 fell by more than 10% this year after US President Donald Trump announced plans to introduce tariffs on goods imported to the US from other countries. Jason Hollands explains: “When the news headlines about the economy are downbeat and markets are falling or paralysed by uncertainty, many people shy away from investing altogether. “However, these often prove to be the best times to put money into the stock market, as you end up buying shares when they are cheap. “Regular investing helps keep you doing this through thick and thin.” Dips in the stock market are only a problem if you need to access your money immediately. If you are investing for the long term then the market will usually bounce back before you need to access your funds. Rises and falls in the market are called “volatility” and usually happen every few years. Always remember, you need to be prepared to lose any money you invest. Don’t invest any cash that you know you’ll need within the next five years – for example, if you’re building up a house deposit. Before you start… set up an ISA The best place to start investing is a Stocks and Shares ISA. This allows you to invest your cash into the stock market tax-free, and you can save up to £20,000 a year into the account. You can start investing with just £1. Stocks and Shares ISAs are offered by several major banks including NatWest, HSBC, Barclays and Lloyds Bank, although you’ll need a current account with them. Otherwise, you can use an investment platform such as AJ Bell, Hargreaves Lansdown or Fidelity. Just watch out for fees – every bank and investment platform sets its own fees, and these should be made clear to you when you open an account. These pay for the costs of running the account and fund, investment manager fee, administration costs and legal fees. You can use websites such as moneyfactscompare.co.uk and Forbes to compare ISA providers and their fees. 20s How much you could have by 70 if you started investing £25 a month: £66,716 In your 20s, time is on your side so it’s a great time to start investing. You don’t need to start off with loads – just £25 a month could earn you almost £67k by the time you’re 70. Your first step is to make sure you’re enrolled in a workplace pension and are maximising your employer contributions. This might seem strange, but when you save into a pension, you ARE investing. Your money is invested in lots of different things – stocks and shares (when you own a tiny slice of a company), bonds (government loans) and other sorts of assets too. You contribute a minimum of 4% of your pay into your pension, while your employer adds at least 3% and you’ll get 1% in Government tax relief. When you increase your pension contributions, your employer will often match them. Once your pension is sorted, you can focus on investing into your Stocks and Shares ISA. If you won’t need the money for at least five years, you can generally afford to take more investment risk. That’s because your money will usually have spent enough time in the market to recover from any dips. But you should still have a diversified portfolio, which means having your investments spread out across different companies, sectors and regions. Sarah Coles, head of personal finance at AJ Bell, says an easy starting point for new investors is a global equity tracker fund. These essentially buy small slices of thousands of major companies across the world. Sarah recommends the Vanguard FTSE All-World ETF, which is available on popular investment platforms like Vanguard, Fidelity and Hargreaves Lansdown. It is mostly invested in US companies, including Nvidia, Apple, Microsoft and Amazon. It’s had a strong average yearly return of 11.39% over the last five years. If you want to try something more adventurous – and you’re prepared to invest for the long-term – you could try an emerging markets fund like Lazards Emerging Markets, or an Asian fund like Invesco Asian. A fund lets you invest in lots of different companies at once. Both of these funds are more adventurous as they’re investing in the markets of developing countries, which means you can see bigger price swings up and down. Lazards Emerging Markets has had an average yearly return of 15.35% over the last five years, while Invesco Asian has had 13.09% returns. 30s How much you could have by 70 if you started investing £25 a month: £38,151 As you enter your 30s, you might be more financially squeezed as mortgages, children and other commitments compete for your income. But you can keep on top of your investing goals by separating out money you’ll need in the shorter term and money that can stay invested for decades. Ed Monk, pensions and investment expert at Fidelity International, says: “Money you may need within the next few years, such as a house deposit, is very different from pension money that could remain invested for another three decades. “Being too cautious with genuinely long-term money can be a risk in itself, because inflation can erode the spending power of cash over time.” If you’ve got money set aside for the long-term, you could still choose a few more adventurous investments – as long as you still have a diversified portfolio. Sarah says you could try the abrdn Global Smaller Companies, which is a fund investing, as the name suggests, in smaller companies across the world. Companies it invests in include SharkNinja, Encompass Health Corp and Wintrust Financial Corp. Over the last five years, it’s had an average yearly return of -3.62%. Although this is a loss, remember that past performance is not a reliable indicator of future returns. If you’re willing to stick out your investment for the long run, Sarah says these types of investments “tend to be more volatile but offer greater growth potential”. You could maximise your investment growth further by increasing how much you invest per month if you’re given a pay rise. Winston Ruddick, senior consultant in Broadstone’s financial planning team, says: “Even modest increases now can still make a significant difference to the amount you accumulate over the decades before you retire.” 40s How much you could have by 70 if you started investing £25 a month: £20,806 Your 40s are when you might start thinking more about how your finances will look in retirement. Ian Futcher, financial planner at Quilter, says: “Many investors assume they should automatically dial down risk in their forties, but that’s not always the case. “Someone planning to retire in their late sixties could still have nearly three decades before they need to draw significantly on their investments, as well as many years in retirement itself.” How much risk you take depends on exactly when you think you’ll need the money for retirement or other goals. But you’ll probably want a balanced investment portfolio, which means having a mix of high-growth options and stable investments. You can try some of the higher risk investments we suggested for your 20s and 30s alongside a more stable option like the IFSL Evenlode Income. This investment fund focuses on high-quality UK companies which can generate steady income. Companies it invests in include Unilever, Experian, Diageo and Reckitt Benckiser. It’s had an average annual return of 4.13% over the last five years. Winston adds that your 40s are a good time for a “serious financial health check”. For example, you should also consider upping your pension contributions if possible and make sure your investment portfolio has not become too heavily concentrated in a particular company or sector. 50s How much you could have by 70 if you started investing £25 a month: £10,276 Getting into your 50s, you should have a better idea of your retirement plan. Take stock of your pension pots and investments, check when you expect to retire, and how much money you think you’ll need each year. For a minimum standard of living in retirement, you need £13,900 a year for one person or £22,500 a year for a couple, according to Pensions UK. For a more comfortable retirement, which would include a yearly trip abroad and a small car, you would need £32,700 a year for one person or £45,400 a year for two people. You might be thinking about reducing your investment risk now as you’re coming up for retirement. You could try less risky investments such as bonds or gilts. Bonds are essentially investments where you lend money to a government or company in exchange for regular interest payments – and gilts are bonds issued by the UK Government. Sarah suggests the Amundi Core UK Govt Bd ETF, which tracks UK Government bonds. This has had an average five-year return of -4.92% although this is largely because of the bond market crash in 2022, which caused UK Government bonds to drop over 25% to 30% in a single year. You should also check whether your pension is automatically moving into lower-risk assets as you approach retirement. Ed says: “Many older pension strategies were designed around people buying an annuity at 65. “If instead you expect to remain invested and draw an income gradually, your investment horizon could still be 20 or 30 years.” Moving too much into cash or other low-risk assets too early could leave your savings exposed to inflation. 60s How much you could have by 70 if you started investing £25 a month: £3,882 Once you’ve retired, you’ll likely start drawing from your investments. But your strategy from now should depend on whether you’re planning to withdraw it all very soon, or whether you plan to stay invested in retirement and withdraw the money over time. You can normally take up to 25% out of your pension pot tax-free. Sarah says if you need the money soon, you should cut your investment risk. “Failing to do this would leave you hostage to fortune because stock markets can be volatile, particularly over the short term,” she said. You could choose a less risky option such as the Royal London Short-Term Money Market, which is a money market fund. These are low-risk funds that pool your cash into ultra-short-term, safe investments – such as lending your money to the UK Government and leading global banks. The Royal London Short-Term Money Market has an average yearly return of 3.68% over the last five years. Before you take money out of your pension or other investments, make sure you look at how much income you need, which accounts it makes sense to draw from, and the potential tax implications. You can get free pension advice from Pension Wise, or speak to a financial adviser. How my investment plan turned £3k into £80k WHEN Eric Woodward spent £3,000 on a savvy investment, he never dreamed it would be worth £80,000 a decade later. Eric, a retired financial services worker, who lives in St Albans, decided to invest his cash in the Guinness Global Equity Income Fund after reading about it. It is run by expert fund managers who pick the companies they think will perform best. Eric liked that the fund was invested in companies around the world in countries including the UK, US, France and China. Eric decided to invest £3,000 and now adds around £500 to it every month. He has around 30 investments in total, including other funds and shares in big tech companies including Microsoft, JPMorgan and Goldman Sachs. But he’s held the Guinness Global Equity Income Fund for the longest. “It’s an investment you don’t need to worry about,” he told The Sun last year. “I review my investments around once every three months, but I’m still happy with the fund.”