Jasmine Birtles
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Are You Ready to Start Investing? 5 Questions to Ask Yourself First
Ruby Layram
2nd Oct 2025
Investing sounds exciting, doesn’t it? The idea of making your money work harder while you sit back with a cuppa has real appeal. But before you jump in, it’s worth asking yourself a few simple questions.
Because here’s the thing, investing can grow your wealth, but only if you’re prepared. Rushing in without a plan is a bit like booking a holiday without checking if you’ve got a passport.
So, let’s keep it simple. Here are 5 questions to ask yourself before you make your first investment.
1. Do I Have an Emergency Fund?
Investing is for the money you don’t need right away.
Life, however, has a habit of throwing us curveballs. The car breaks down, the boiler packs up, or the dog needs an emergency trip to the vet.
Tip: Aim to have at least 3–6 months of essential expenses tucked away in an easy-access savings account. That way, you won’t need to dip into your investments when life happens.
2. Am I Carrying High-Interest Debt?
There’s no point chasing 7% returns in the stock market if your credit card is charging you 25% interest. Paying off high-interest debt is often the best investment you can make.
Also read: Good debt vs bad debt: What you need to know!
Tip: Clear expensive debts first. Then you can invest with a clean slate and keep more of your gains.
3. What’s My Timeframe?
Are you saving for a house in two years? Or are you building a retirement pot you won’t touch for decades? Your timeframe matters because it tells you how much risk you can take.
Short-term (under 5 years): Stick to safer options like savings accounts or bonds.
Long-term (5+ years): You can afford to take on more risk with stocks, funds, or ETFs.
4. How Much Risk Can I Handle?
Be honest, how would you feel if your investments dropped 10% in a month? If the thought makes you panic, you might want a more cautious approach. If you’d see it as a buying opportunity, you could handle more volatility.
Tip: Start with a balanced mix, a combination of stocks, bonds, or diversified funds, and adjust as you learn what feels right for you.
5. Do I Understand What I’m Investing In?
Rule number one is never invest in something you don’t understand.
If you can’t explain (in plain English) how an investment makes money, it’s not the right place to start.
Tip: Begin with simple, broad investments like index funds or ETFs that spread your money across hundreds of companies. They’re cost-effective, less risky than betting on one stock, and a brilliant way to learn.
Getting Started
If you can confidently answer these five questions, congratulations, you’re ready to invest!
- Open an account with a low-cost investment platform (check fees carefully).
- Start small. Even £25 a month can build into something significant over time.
- Automate your contributions so investing becomes a habit.
Final Thoughts
Investing isn’t about timing the market or chasing the latest fad. It’s about being prepared, starting small, and staying consistent. Ask yourself these five questions, get your foundations in place, and you’ll set yourself up for long-term success.
Because the best time to start investing? Yesterday. The second-best? Today.
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here, including opinions, commentary, suggestions or strategies, are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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