How Much Should You Invest Every Month?

Added: 2026-05-19

[00:00:00]If you would have invested £10,000 back in 1986, left it in the stock market, and never invested a single penny ever again, your account would be worth £1 million today. Now, while that's pretty cool, let's be honest, that's a ridiculous scenario and nothing like what investing is actually like in the real world. So, what I wanted to look at for you in this video was something that lots of people always ask about. How much money should you invest each month?

[00:00:27]Is there a right amount based on your age? And is it too late to start investing if you've not started already?

[00:00:33]I think you'll be surprised with what's possible and just how much money you could make if you look at investing in a different way. So, how much money should you invest every single month? Well, why don't we run the numbers and see? Okay, let's deal with this first point up front. I actually don't think this is a good question on its own. There's not a magical amount of money that is somehow the perfect amount to invest every time you get paid that is somehow going to guarantee that you become a millionaire or retire 20 years early. Investing doesn't work like that as we actually have no idea what the future holds. But not only that, everyone's situation is so different that there can be no one-sizefits-all solution to this problem. However, saying that, there are definitely some key points that apply no matter if you're investing £100 a month or many thousands. Firstly, let's just address the point that if you can put in more money to your investments and you get the same returns as someone else who puts in less money in, well, of course, you will end up with more money. That's just maths. £100 a month invested over 20 years with a return of 8% a year on average becomes just over £57,700.

[00:01:39]Whereas if you were to invest £200 a month, you end up with £115,520, which is exactly double the money. The more money you can put in, the larger your investments are going to grow.

[00:01:52]However, as we should all know by now, life just isn't that simple. And as much as I would love for everyone to be able to invest a fixed amount every month and do it from the moment they start working, this just isn't the case. Life gets in the way. We've got houses to save up for, student loans to pay off, and the list of bills that just never seems to end. I know from my own investing journey that it isn't as simple as everyone makes out. I've been in a position where I've invested a couple of hundred pounds a month to many thousands of pounds a month. And there's been plenty of times where I've not invested anything at all during the times when I wanted to buy a house or pay off extra debt that I finally wanted to get rid of. The point I wanted to make was that we're all different. So investing a set amount of money is not necessarily about hitting a certain number. It's more about finding a balance that you can stick with for the long term. Think about it like this.

[00:02:39]Most people in their 20s or even early 30s are in a totally different position than people in their late 30s, 40s, and 50s. In your early years, you're going to be much more junior in your career.

[00:02:50]You'll be earning less. You might be trying to save up for a house. And you've probably got student debt around your neck, too. If you can even manage to invest anything during those years, you're doing pretty well. And if you look at some of the stats that are out there, it points a really interesting picture. Generally, younger people have less disposable income and therefore they've got less invested when compared to people older who are typically earning more and already might own their homes as well. Now, obviously, if you can start investing sooner than later, you give yourself a massive head start, even if it's just £50 a month. That's not because £50 is suddenly going to make you a millionaire. is that the habit of investing every single month and just making it part of your everyday life is what I think is really important. You see, unless investing becomes a normal habit for you and something that you get used to, it's very easily something that you can easily give up on when times get tough and times will get tough at some point.

[00:03:43]Whether it's this year, next year, or 5 years from now, something will happen that makes you think twice. Anyway, putting all of that to one side, here's a good place to start. forget about a specific amount and focus on what you can afford to invest. For me, this means money that I do not need to use in my everyday life that any money that I might be needing in the next couple of years. Money you invest needs to be truly money that you do not need access to. As unless you're prepared to keep it invested for the long term, you're pretty much gambling and taking on way more risk than you realize. So, as a starting point, rather than focusing on the amount of money itself, think about what you can truly afford to invest in your current situation. Whatever amount that is will be the correct amount to invest because that number is always going to be personal to you. Whether that's 200 pound, 300 pound, 1,000, it doesn't really matter. It's the principle that matters here about investing money that you can afford to keep locked away. Ideally, that should be for a period of at least 5 years. But if you can extend that out to decades or more, you could really put yourself in a great position. Now, the reason that this part is so important is that investing for longer periods of time generally has much better outcomes than just investing during the short term.

[00:04:52]I've talked about research like this before, but have a look at this on screen now. This shows a 100red years worth of US stock market data and ask the question what your odds were of beating inflation with either cash or stocks. As you can see, if you invest for short periods of time, there's still a good chance that around 30 to 40% of the time, you could end up worse off.

[00:05:12]It's not like you're going to lose all your money, but just means you'll be worse off a little bit. But once you extend that out to many more years, things look a lot more favorable. Up to the point we get up to 20 years, there's never been a period of loss against inflation. And this is why it's so important to focus on long-term investing, no matter how much you can afford to invest every single month.

[00:05:32]Now, let's run some more numbers, but this time, I want to show you something really important. Many of you out there might think it's too late to start investing or that you wished you would have started this many decades ago.

[00:05:42]Believe me, that's exactly how I feel, too. But when I look back, it just wasn't realistic. I didn't have the disposable income. I had more debts to pay off, and I was still trying to buy things to impress people. When you're a bit older, hopefully you're a bit wiser, as well. And generally, you can turbocharge your investing later in life. Don't forget about using things like pensions where you can get a match from your employer and also additional tax relief if you end up as a higher or additional rate taxpayer. If you're smart about how you invest, you can actually beat someone who started much younger than you. So, let me show you exactly that situation right now. Here's the example. Person A starts investing really young at 20 and they invest about £300 a month from their £30,000 salary because they watched a video that says £300 a month is a great amount to invest over their career. They keep investing £300 a month no matter what. Even as they get pay rises and move up in their job by age 60, assuming an average growth rate of 8% a year, they have an investing portfolio we can all dream of, amounting to just over 1 million. Now, yes, this is not factoring in inflation, and 1 million pounds in 40 years is not going to buy the same as it does today, but don't worry about that for now, as this isn't the point that I wanted to make in this example. Now, person B is starting later on in life. Not old by any means, but they're going to start 15 years later than person A. However, this person is going to be very smart about their investing rather than just say they want to invest a set amount of money. They're going to try and invest 20% of their income. Now, maybe this is through a combination of pensions and stocks and shares ISAs and also some workplace contributions, too. Definitely making the most of all possible tax relief. They also earn more than person A as well, starting out making £60,000 a year. And as they make more money, they keep paying in around 20% of their income to their investments. Here's what person B ends up with, assuming the exact same rate of growth in their investing account. They have just over 1.2 million. So yes, they have taken over person A with 15 years less in the market. If we put both of them on the same chart together, here's what that looks like. And you can see that around age 50 is the point that person B actually starts to overtake person A. As you can see here though, person B has put in a lot more money. There's no escaping that fact. But the point I wanted to highlight was that there's no right or wrong amount of money to try and invest every month. The really important thing is making sure that you do it for as long as possible and try to harness the power of compounding on your investments. You see, the old saying that time in the market beats timing the market couldn't be any more true. In fact, let me just do one more scenario on this line and show you what happens if person A increases their investing along with their income. If they got a 3% pay rise each year and just invested 10% a year of their total income, here's what the graph would look like. Now, person A would actually be the winner overall because there's no guessing away from the fact that getting a 15-year head start with investing is going to give you a huge advantage. Now, if you are person A and you started investing at 20 years old, you'll have to let me know in the comment section below. So, as much as I love examples like this, it's always important to say that investing is not something that guarantees any kind of results and the returns are certainly not going to come in any straight line as well. If the past is anything to go by, during a multi-deade investing career, you're likely going to experience lots of dips, maybe a couple of crashes, and everything in between. So, do remember that. However, one thing you can control, no matter how you invest and what age you start, is to keep your costs as low as possible. So, whether that's using a tax-free investing account like a stocks and shares is or also investing into a pension where your employer puts in free money, keep your costs low. As well as that, make sure that whatever investing Apple platform you use also has nice low cost too as any money you pay in fees gets lost forever. For me, one of the places I've invested for many years is on Trading 212. They offer a free stocks and shares Iser, a cash Iser, and even very soon a self-invested personal pension. There's no trading fees or commissions, and you can also invest using fractional shares from as little as just £1. Now, if you want to open an account here yourself, you can get a free fractional share worth all the way up to £100. Just get registered and then put in at least1 pound and you're done. You can follow the QR code on screen now or just use the code Toby in the promo code section once you've downloaded the app. You can find it by pressing the three lines here and then scrolling down to promo codes over here. Hope you get a good one to get you started. Good luck. Now, one more thing I wanted to show you was this handy table to try and give you a bit of inspiration, food for thought about the power of longo investing. Have a look at this now. It should be really easy to read, and all you need to do is choose a monthly invested amount, for example, £300 a month, and then drop down to a number of years invested. Let's choose 30 years. And then we can find the cell that tells us that we could end up with £250,000 after this amount of time. Now, one key thing to say here is that this is taking inflation into account. And I'm basing this on getting 5% real returns per year rather than something like 8% nominal returns. So that £250,000 in 30 years time is the same as £250,000 right now. Without inflation, these numbers get huge. But I want to make things more realistic and it's much easier to frame money today as we all know what we can buy with it right now.

[00:10:57]There won't be any surprises here that if you put in more money and you do it for a long amount of time, you'll have more than another person, assuming you get the same returns. But the key thing I want to take away from this is seeing just how powerful the smaller sums of money are. If you truly get to do things long term, I love the fact that £50 a month for your investing career ends up at over £75,000.

[00:11:20]That would be a huge sum of money. And don't forget that it can still grow once you retire as well. If you want to have a look at some other lengths of time and other amounts of money, feel free to pause it or come back to this one.

[00:11:30]Anyway, a lot of people might watch a video like this and say, "Well, that's all well and good, but what if a market crash happens, right? Especially when I want to retire." Well, firstly, there's nothing you can do about a market crash.

[00:11:41]But you can do something about your own planning if you have a set date in mind and there's no reason why you could not have been preparing for this for quite a long time. Not everything needs to be invested. It could be moved to cash or some kind of money market fund and you could have been putting in more to a cash account rather than an investing account in preparation. Although this really is another video topic, I think it's really important to remember that even during retirement, most of your money is still going to be invested unless you're happy to know that inflation will eat up all of your cash or that you've somehow got way more than you actually need. I always think people see retirement as this one day and you have all of this money and then that's it. But really, it's a process and your investments are going to get drawn down upon a long period of time hopefully.

[00:12:23]So, you don't need the best luck in the world, although that might help. I just wanted to mention this as something that gets brought up now and again as if it's some kind of gotcha event when in reality it's just part of investing and nothing about inflation changes or why you want to invest in the first place.

[00:12:36]So, how much should you invest every month? My short answer at least will be as much as you can afford to, but don't get fixed on an exact number and try to be flexible. Start as early as you can, but don't think that you've missed the boat after some arbitrary age range. I don't think you're ever too late, personally, but you do have to work out what you're trying to do and have a bit of a plan. The final thing I will say is that do not neglect things like workplace pensions and getting free money from your employer. That is one of the single most powerful ways to grow your investments. And most people have almost no idea how they work, let alone what they're invested in. Now, I've done videos on all of those topics, so feel free to browse my channel a little bit later. Also, keep your cost low, keep it simple, and think long term. If you want to see what that might look like in practice in a real investing account, then feel free to watch this next video where I'm starting a brand new stocks and chairs ISO with £200 a month, taking you along with me every step of the way.

[00:13:31]I'll see you over there. And as always, happy investing.