A Comprehensive Guide to Investing for Beginners in the UK

The year 2023 makes you despair: supply bottlenecks, energy crisis, inflation and rising interest rates – who would want to invest money there? Too much uncertainty, too many crises – the reflex to keep your hard-earned money together right now is only human, but not necessarily sensible!

“If you are young, then fall on your knees and pray for the next crash.” – once said a well-known economist William Bernstein about investing.

The fact is that the next crisis will come, but that doesn’t matter. We’re honestly looking forward to it, because we will be prepared! That’s why, today, we’ll discuss the basics of investing, its importance, platforms and the amount of money to start with.

What Is Investing?

Anyone who wants to invest money these days has an infinite number of options: Stocks, funds, real estate or interest-bearing products such as savings accounts, bonds, overnight money or time deposits. For beginners it is easy to lose track of this and then go to the advisor at the bank around the corner. Often they come out with overpriced investment products. 

With a little initiative, however, it is not difficult for newbies to invest money simply and well on their own. In this way, assets in low-interest savings accounts can be prevented from yielding hardly any return, or money can be unnecessarily poured into costly investments.

Investing, broadly, is putting money to work for some time in some sort of project or undertaking to generate positive returns (i.e., profits that exceed the amount of the initial investment). It is the act of allocating resources, usually capital (i.e., money), with the expectation of generating an income, profit, or gains.

Types of Investing

Financial resources are used to acquire assets. The subdivision of fixed assets into tangible assets, financial assets and intangible assets makes it possible to classify investments according to the type of asset on the asset side of the balance sheet.

In addition, a further subdivision of the object can be made. Here, a distinction is made between the different motivations of the investment decision.

Why Investing Is Important

Why Investing Is Important

In the following section, we will take a brief look at the three most important advantages that you will gain in connection, when you want to start investing, for example, in CFD:

We will go into each of the three advantages separately to show you an example of CFD that has countless positive sides and should be considered by everyone.

Best Investment Platforms for Beginners

An online broker is not a nice-smelling man in a suit with a tied tie who tries to sell shares with a friendly smile but is ultimately the extended arm of the customer interested in finance. In other words, the online broker is ultimately a platform that provides access to the financial market. Even though the financial market has been available to private individuals for quite some time, it is still necessary to act through the intermediary – and that should just be the best online broker. Let’s take a closer look at some of the best platforms for investing for beginners.



Anyone who plans to start investing their savings in such a way that over time a fortune is created and inflation does not “eat up” everything in conjunction with the zero interest rate policy is well advised to take a look at the provider Capital.com. This is quite a well-known broker, which is often referred to as recommendable in the industry. But is the broker, which has existed since 2016, really a recommendable provider or should one rather be cautious after a closer look?

Capital.com pros

Capital.com cons

Capital.com was founded in April 2016 – so the broker has been around for about six years. Capital.com employs around 100 people. The company is based in Limassol – on the island of Cyprus and therefore within the European Union.

Is Capital.com reputable? Yes. Because Capital.com is a perfect place to start investing and is regulated by the Financial Conduct Authority (the FCA, the British regulator), the Cyprus Securities and Exchange Commission (the CySEC, the Cypriot financial regulator) the Australian ASIC, the FSA (Seychelles) and the SCB (Bahamas), there is no evidence that questionable strategies or even fraudulent machinations are being pursued here.



Who deals with securities, because one has no more desire for the low as zero interest rate policy of the European Central Bank, the ECB, then you will probably come across the provider eToro. But what eToro experiences can be found on the Internet? Because popularity, in the end, says nothing about whether the holistic eToro rating is positive or not in the end.

eToro pros

eToro cons

The fact that eToro is reputable cannot be disputed. When investing your money, there are no eToro experiences that are about fraudulent schemes being pursued here. In addition, there are no hidden eToro fees or questionable eToro costs. Furthermore, one must not forget that eToro is regulated. Because the broker is based on the island of Cyprus, the Cyprus Securities and Exchange Commission takes care of compliance with all rules and regulations. CySEC is one of the most well-known as well as the strictest financial regulators. Furthermore, eToro keeps customer funds separate from the company’s assets. This guarantees maximum protection of customer deposits in the event of insolvency.

Trade Republic

Trade Republic

Trade Republic is a smart broker to start investing with and that not only convinces you with favourable trading opportunities but also provides a very wide variety of assets and trading options. There are over 6,500 securities here, as well as around 500 savings plans and numerous ETFs. The offer provided here may well be categorised as excellent.

Trade Republic pros

Trade Republic and cons

One should already know in the course of looking at the payment methods that Trade Republic is reputable. But if you need some more proof, you should look into regulations like deposit insurance. Trade Republic is managed by Trade Republic Bank GmbH. The bank is regulated. Behind it is the German Federal Financial Supervisory Authority – BaFin. The liquid assets are managed by Solarisbank. The deposit insurance amounts to 100,000 euros. That Trade Republic is reputable cannot be doubted. Neither the Trade Republic reviews nor the one or other Trade Republic testimonials would have given any indication that it is a questionable provider.

How Much Money Should a Beginner Have Before Investing?

Investing may not be difficult as a rule. Once the question has been answered as to what to invest in and a securities account has already been opened with an online broker, it is then necessary to clarify how much money should be invested. Of course, the question depends on how much money is a) freely available and b) how much the stock costs.

A tip for investing: You should only ever invest freely available money – regardless of whether you are doing it with a one-off amount or want to buy shares regularly, for example as part of a savings plan. Because if you speculate that the money will increase within a few weeks, but there is a correction, you must assume that a loss has occurred here due to the current situation. However, the loss will only be realised if the money is sold in the course of the correction. If one would need the money at that time, then the snapshot becomes a loss – but if one has the opportunity to leave the money untouched, then one can wait for another upswing so that the loss becomes a profit.

So, since there is no guarantee, you should only put your free money where your mouth is when it comes to putting your money for something. For example, buying shares may also be possible without any problems: If one has capitalised the account with the broker, one looks for the appropriate enterprise and looks at the share price. Then one decides how much money is to be invested. For example, if a share costs 20 euros and you want to invest 500 euros, then you will receive 25 shares – without taking into account various fees. If you confirm the transaction, the 25 shares are booked to the securities account for the best investment.

Another great example is when you’ve already invested money, but have lost. The last strong correction could be observed, for example, in the course of the coronavirus crisis. At the beginning of the COVID-19 pandemic, the DAX, the German stock index, was at almost 14,000 points – within a few days it went below 9,000 points. However, the DAX was able to recover within a year and rose to over 15,000 points for the first time. So anyone who was trying investing in stocks here in the course of the crash or correction was able to enjoy attractive gains after a year.


If you follow the most important basic rules, you can manage your finances yourself and confidently do without a bank advisor. A portfolio of overnight money, fixed-term deposits and equity funds is a good basis for this. Finanztip recommends dividing the investment into four sections:

When putting together your investment, you must think carefully about what you are investing money for and how comfortable you feel with the individual asset classes. Your work situation and the investments you have already made also play a role. For an equity fund, for example, you should think long-term; overnight money, on the other hand, is suitable for parking money in the short term.


For newbies venturing into investing in the UK, selecting the right platform is crucial. Hargreaves Lansdown stands out due to its user-friendly interface and extensive options. It provides access to a variety of funds, shares, and trusts. AJ Bell Youinvest offers a simple interface and comprehensive research tools. Interactive Investor is notable for its diverse investment choices and reduced fees for frequent traders. Nutmeg, a robo-advisor, caters to novices by automating portfolio management. Meanwhile, Trading 212’s commission-free structure and intuitive app suit those just starting. Consider factors like fees, available assets, educational resources, and ease of navigation when picking a platform that aligns with your investment goals.

In most traditional investment scenarios, such as buying shares of a company or investing in bonds, the maximum potential loss is limited to the initial amount. If a stock’s value plummets to zero, you’ve lost what you initially invested. However, trading with borrowed funds (margin trading) or using complex financial instruments like options and futures can expose you to losses beyond your initial investment. These strategies leverage investments, amplifying both gains and losses. To mitigate the risk of losing more than your investment, it’s wise to focus on diversified, long-term investment strategies rather than speculative and high-leverage approaches.

Certainly, investing in stocks can yield substantial profits, but it’s important to acknowledge the associated risks. Stocks offer the potential for significant gains due to the growth of companies over time, dividend payments, and market appreciation. However, stock prices are volatile and subject to market fluctuations, impacting potential returns. Achieving substantial gains requires careful research, a long-term investment horizon, and the ability to withstand market downturns. Diversification across multiple stocks and sectors can help manage risk. While there’s no assurance of making a lot of money in stocks, a disciplined approach, patience, and continuous learning can enhance the probability of favourable returns over the long run.

Researching investments is a critical step in making informed choices. Begin by understanding your financial goals, risk tolerance, and investment horizon. Study company financial statements, including income statements, balance sheets, and cash flow statements. Analyse industry trends, competitive advantages, and growth prospects. Utilise financial news, reputable websites, and stock screeners to gather information. Evaluate a company’s management quality and its ability to innovate and adapt. Consider macroeconomic factors that could impact your chosen investments. Diversification across various sectors and asset classes is essential to spread risk. Stay updated on market news and continuously refine your investment strategy based on changing circumstances.

The initial amount a beginner should invest depends on individual financial circumstances and goals. While there’s no fixed rule, it’s generally recommended to start with an amount you’re comfortable with and won’t need in the short term. Investing is a long-term endeavour, and consistency matters more than the initial sum. A common suggestion is, to begin with at least £500 to create a diversified portfolio across different assets. Starting small allows you to learn and gain experience without significant financial risk. As your knowledge and confidence grow, you can gradually increase your investment. Regular contributions, even if they’re small, can make a substantial impact over time through the power of compounding. Remember that everyone’s financial situation is unique, so assess your own circumstances before determining your initial investment amount.