HOW TO BE A FIRST-TIME INVESTOR: SIMON LAMBERT ON WHY YOU SHOULDN'T LET FEAR HOLD YOU BACK

I might lose money, I don't like gambling with my cash, I've not got a big enough sum yet, it's too complicated and I don't understand what to do.

These are some of the reasons I've heard over the years for why people don't want to invest.

My view when it comes to saving and investing is that it should be entirely your choice which one you do, but I'd strongly advocate the latter if you want to build your wealth.

There are lots of studies that show investing is the best way to generate inflation-beating returns over the long term - read my guide: Why investing matters to find out more about this.

Yes, investing does bring the risk of losing money – as well as making gains - but many are happy to do other things that ensure a loss.

Buy a new or second-hand car, a £600 smartphone, or a Christmas tree and you are guaranteed to lose money.

Meanwhile, investing isn't like gambling because it's not a bet where you lose all your money if it doesn't go your way.

If you spread your risk with a broad stock market fund, you will find that even in major stock market crashes, maximum top to bottom losses total around 30 to 40 per cent.

And even if you get caught out buying at the absolute top, you will only make that loss if you sell out at the bottom. 

Hold your nerve and wait for markets to rebound and you are likely to find your paper losses trimmed substantially - and if you are patient enough, they may one day turn into gains.

The Covid crash was the greatest example of this. It was an overused word at the time but the pandemic and the lockdowns were genuinely unprecedented and that sent share prices tumbling.

Yet, the US stock market, which makes up 60 per cent of the global market, nosedived 32 per cent in just over a month from mid February 2020 but had then regained all its losses by September that year. 

One way to minimise the potential pain of a market crash acts as an argument against the 'I don't have a big enough sum yet' reason for not investing.

Broadly speaking, you should not invest until you have any debts other than your mortgage paid off and a healthy emergency fund built up in readily available cash.

But once you have done that, it can be a mistake to then try to build up a large lump sum to invest.

Wait until then and stick it all in at once and you are at risk of the market suddenly dropping and hitting your entire pot. Whereas, starting small and drip-feeding money in can put you at less risk of suffering a big financial shock from a downturn.

Regular investing in this way also commits you to putting your money to work and means that you are buying even when the market is down, and thus taking advantage when share prices are cheaper. It's something known as pound cost averaging, explained here. 

There is also no need for investing to be complicated. 

In fact, nowadays it can be phenomenally simple and cheap.

Investment platforms offer ready-made investments that will spread your money around the world, adjusted for your willingness to take risk.

Meanwhile, there are funds like Vanguard's Life Strategy and BlackRock's My Map range that offer the opportunity to do this in one place.

Read our guide to investing for beginners to learn more and have a look at some of the investment platforms and what they offer. And read our 50 best funds guide, where experts reveal their favoured reliable and robust investments.

Also read our guide to the best stocks and shares Isas to understand why investing in a tax-free wrapper is important.

Investing also doesn't need to be an all or nothing affair. You aren't either a saver or an investor, you can be both.

If you don't invest but can afford to and are thinking I will give it a try, here's my tip for 2026: just put a bit of your money into investments. 

For every £100 you put aside, maybe save £80 in cash and invest £20 in a simple stock market fund.

See how it goes and if you like it, you can dial things up a bit more.

To get rich by saving in cash you need to do almost all the work, invest and you can get the stock market to do most of it for you.

2025-12-11T10:07:21Z