4 min read
Wellbeing for individuals

Why you need to start investing!

Akshay Sandri

Investing can seem daunting to us. From a young age we are taught to save, save, save. But your money could be wasting away in your savings account. Investing your money is the best way to build wealth and provide financial stability for your future.

What is investing?

Investing, for most people, putting your cash into the stock markets and buying shares in one or more companies. 

When you buy a share in a company, you are investing in its future; you own a little piece of that company, making you a shareholder. You can then choose to sell this share at a later date to whomever wants to buy it. Ideally the company will do well and the share that you initially bought will go up in value by the time you want to sell it. 

Why you need to start investing!

1. Making your money work 

You spend hours of your life working hard, so make sure your money works just as hard too. Your savings account is likely offering you a pretty low interest rate; in fact, average savings rates fell to a historic low at the end of last year. Inflation and the Coronavirus Pandemic have had negative impacts for savings accounts, but investing in the right stocks or funds could see some great returns and make your money grow. Investing regularly provides the potential for much bigger returns than your savings account. 

2. Retirement Planning

Here at Maji we are all about retirement preparation and financial stability for your future. By investing and growing your money, you will increase your wealth over time. Investing is not a quick-fix, nor is it a risk-free way of building wealth. Responsible investing is a slow process, so the earlier you start, the greater your rewards will be later in life!

The gender pay gap and inequalities within the workforce already put women behind: research suggests that there is a gender pension gap of up to 40.3% and just 10% of women in the UK have stocks and shares. If women want to achieve their retirement goals, investing is a necessity. 

And for all genders, responsible investment will allow you to remain financially independent, even after you retire. 

3. Tax reductions 

Did you know that investing in stocks and shares via a pension is tax efficient? The UK Government offers tax rebates for certain types of investments, making investing even more attractive. For example, as a lower-rate taxpayer, you’ll get 20% tax relief on your pension, meaning that every £500 you put into your pension will only cost you £400. 

Stocks and shares ISAs are also tax efficient because you can put up to £20,000 into an ISA each tax year and won’t pay Income Tax on any interest you accrue. 


Even though we think investing your money is great, it is still a risk that needs to be considered carefully. MoneySavingExpert explains it well: ‘Investing in stock markets is a risk: while you could win small or win big, you could lose small or lose big – and end up empty – handed.’ However, they also remind us that ‘a reasonable and calm attitude’ can be a good foundation for making the most of your savings. 

Because business is ever-changing, and stock prices can vary, there is no absolute guarantee that your investment will grow. Short-term investment (e.g. day trading) can be particularly risky in this respect, especially when the market is volatile. But, over the long term, we know that the market tends towards growth. That’s why, as a beginner, it’s a good idea to look at investing for many years, if not decades, so sudden changes in the market are evened-out over time. Additionally, you may want to contribute your money gradually rather than all at once. In this way, investing becomes less of a gamble and more of a carefully-planned strategy to increase your savings over time. 

Although it might seem complicated, responsible investing could have real long-term benefits and help you see your wealth grow. If you’re not sure how to get started, remember you can send your questions to us through the Maji chat!

Photo by Austin on Unsplash

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