Investing needs a rebrand. There are all sorts of myths floating around which put people off it. But investing can be a powerful tool to help you grow your money for the future.
It’s time we tackled the rumours head on and revealed the facts.
Myth 1 – You need to be a stock market pro
One of the most common investing myths is that you need expert-level knowledge of the stock market before taking the plunge. This makes investing seem inaccessible to most of us – particularly if we don’t have training or experience in financial markets.
While there’s no harm in educating yourself, you don't need to be a stock market pro to start investing yourself. Think of investing as a journey that’s open to us all – regardless of our background or expertise.
In fact, there are many investment options out there that don’t need you to have in-depth knowledge of individual stocks or complex market analysis. That’s the case with us.
Your money’s in expert hands
With us, your money’s managed by BlackRock, one of the world’s largest fund managers. They know the stock markets inside out. And it’s their job to take care of the money you invest, with the aim of getting you a return.
You choose between 3 ready-made investment options (called funds) based on how much risk you’re happy to take. And the experts do the rest.
Learn along the way
Although the hard work’s done for you when you invest with us, it’s still good to know what’s happening with your money. Our bite-sized topics let you grow your investing know-how as you go – helping you understand key elements of investing, and feel more confident about your money.
Myth 2 – You need lots of money to invest
Another myth about investing is that you need to be rich to invest. This is far from the truth. It’s important to debunk this one because it discourages many people from getting started.
Absolutely anyone can invest, no matter how much money they have. There’s no set answer to how much money you need to start investing. It's important to be able to invest your money for a long time - so don't invest money you might need soon. But that doesn't mean you need to be rich. Want to start small? With us, you can invest with as little as £1.
Of course, it’s important to think about whether you have enough money set aside for emergencies. Think about building a savings safety net with us first. We go into more detail about what you should consider before you invest in our blog, How do I know if investing is for me?
But don't let the myth of needing lots of money hold you back – you can take that first step, no matter how small your investment may be.
Myth 3 – You’ll lose all your money
Investing does come with risk. The value of your investments could go down as well as up. And you could get back less than you put in.
But that doesn’t mean you’re guaranteed to lose all your hard-earned money. Equally, there’s no guarantee you’ll invest money and get rich either.
You decide how much risk you’re willing to take
Investing offers you the chance to choose how much risk you take, based on your own preferences and goals. That’s why we offer 3 investment options with different levels of risk. You choose the option you’re most comfortable with.
An investment may come with lower risk and more stability, but potentially lower returns too. And investments that are considered higher risk can come with potentially higher returns – but there’s also a greater chance that you could get back less than you invested too. It’s about deciding what level of risk you’re happy to take to reach your goals.
While risk is a natural part of investing – and there’s a chance you could lose money – you have the power to choose how much risk you want to take.
Myth 4 – It’s expensive to invest
Another misconception is that investing comes with a hefty price tag. But the investment landscape has evolved to make investing possible for all sorts of budgets.
Our fees are transparent from the very beginning. You’ll pay 0.59% of your total investment value per year in fees – a 0.14% fee to the fund manager and a 0.45% fee to us. £1,000 invested? You’d pay 48p a month (if there was no growth or withdrawals). And if you’re a Perks or Max customer, the fee you pay to us will be 0.35% to us, and 0.14% to the fund manager.
Investing isn’t solely reserved for the rich – even small contributions could result in big returns over time.
Myth 5 – You have to get financial advice to invest
Getting financial advice can certainly be helpful. Especially if your financial situation is a little tricky or you’re simply unsure of what to do with your money. But that doesn't mean you have to get advice if you want to start investing.
Consider investing in a fund
A fund pools together lots of investors’ money. And it invests in multiple things. This way, if one thing goes down in value, others might go up – improving the chance of your investment doing well overall. It’s known as diversifying. This is what happens when you invest with us.
You choose 1 of 3 funds, based on how much risk you're comfortable with. And each of them invests your money so it's spread across lots of different things.
Although this isn’t a substitute for the tailored advice a financial adviser can offer, it can be reassuring to know there’s logic behind where your money’s going.
Myth 6 – You’re too young to invest
Your age shouldn’t be a barrier when it comes to investing. With us, you can open an Investment Pot if you’re 18 or over.
Investing early gives you an advantage because the sooner you start, the longer your money has to grow.
Interest on interest? Now that’s interesting
The sooner you start investing, the more time your money has to benefit from compounding. That’s when you earn a return on your investments – and then those returns make you more returns too.
More time to bounce back
When you’re investing for the long term, you’re likely to see your investment value dip from time to time. But if you start investing from a young age and don’t plan to touch your money for a while, your investments have plenty of time to try and recover from short-term dips in value.
As the saying goes, the best time to start investing was yesterday. The second best time is now.
So if you’re ever wondering whether you’re too young to invest, you’re not.
The value of your investments could go up or down and you could get back less than you put in. This isn’t financial advice. If you’d like some, it’s best to speak to a financial adviser. iShares® and BlackRock® are trademarks of BlackRock, used under licence. BlackRock has no obligation or liability in connection with any product or service offered by Monzo.
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