Why should I invest?

Investing can be a great way to build a better future for yourself, your loved ones and even the world we live in. Yet many people hesitate, held back by the perception that it’s too risky, too complicated or simply not for them. However, like everything, the more you understand it, the more confident your decisions become.

Before we get into the how behind investing – like how to open an account or how to choose which funds to invest in – it’s worth pausing to ask yourself why. Why invest at all? What’s the real value? And why should it matter to you?

Here are three reasons why you might consider investing.

1. Make your money work harder

At its core, investing is about putting your money to work so it grows over time and helps you take control of your financial future. By investing in the stockmarket, your money has the potential not just to keep up with inflation, but to outpace it, preserving its value.

Thanks to the power of compounding (where your returns start earning returns) even small, regular investments can grow significantly over time. As the saying goes: It’s not about timing the market, it’s about time in the market. In other words, don’t wait for the “perfect” moment to invest. Start early, stay consistent and let time do its work.

2. Turn long-term goals into reality

Whether you’re saving for a first home, planning for your children’s future or working towards an early retirement, investing helps turn those long-term goals into achievable realties.

To put it into perspective: if you saved £500 a month in a regular bank account with no interest, it would take over 160 years to reach £1 million. But if you invested that same amount in the stockmarket and earned an average annual return of 8%, you could reach that £1 million in just over 33 years. That’s the power of compounding in action.

In essence, investing can help accelerate your journey toward financial freedom and build lasting wealth for you and future generations.

3. Support causes that matter

Investing isn’t just about personal gain; it’s also a way to support the kind of world you want to live in. More and more people are choosing to align their investments with their values through responsible investing, also known as ESG (Environmental, Social and Governance) investing.

This means putting your money into companies and funds that are working toward positive change – whether that’s advancing clean energy, promoting gender equality or supporting ethical labour practices. Just like you might choose sustainable products or support local businesses, you can make investment choices that reflect what matters most to you.

Explore the range of M&G sustainability products and strategies.

Before you invest

The main benefits of investing are likely to show over the long term, so before you invest it’s worth making sure your immediate finances are in good shape. This includes clearing any short-term debt, such as credit cards and overdrafts, as the interest rate you pay on these are likely to be much higher than the rate of return on any investment you make.

You should also build an emergency cash fund to ensure you're financially prepared for life's unexpected twists and turns. Events like redundancy, health issues or changes in personal circumstances can arise suddenly. As a general rule of thumb, aim to keep three to six months’ worth of essential expenses in an accessible savings account.

If you’re unsure whether investing is right for you, it’s worth speaking to a financial adviser. They can help you make informed decisions based on your personal goals and financial situation. You can find an adviser on our Get financial advice page.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The views expressed in this article should not be taken as a recommendation, advice or forecast.