Holly Black: This week’s reader asks, I only have £20 a month to invest, should I bother? Yes, yes, and yes, this has to be one of the most common misconceptions about investing. You don’t need loads of money to start investing, you start investing so you’ll have loads of money in the future.
Now I’m a bit of a geek, my favourite website in the world is a compound interest calculator. And this is a really great tool that shows you how your money grows over time. And spoiler alert, the earlier you start the better.
So as an example, take that £20 a month start investing it at age 20. If it grows at 5% a year, you’ll have more than £40,000 by the time you retire at age 65. And if you increase that amount in line with inflation, so it’s £20 a month in the first year, £20.40 a month, the next year and so on. You’ll have more than £55,000 by the time you retire. Not bad right?