When you first start investing, knowing when and where to put your cash can be difficult.
There are a number of schools of thought and endless platforms offering different solutions, not to mention the amount of get-rich-quick schemes that come and go in cycles – taking the first steps can be daunting.
So, we’ve put together this guide on getting started with investing for beginners (or anyone that’s a little rusty). For more info on all things investing, take a look at our Insights page.
What type of investments are there?
When you first start investing, it can be tricky to know which investments are suitable for you. After all, there are a number of different types of investments available for people looking to protect and grow their wealth over time.
Luckily, there are a range of different investments out there that align with different investor goals.
Whether you invest in stocks and shares on the markets, or you lend money to companies and governments in the form of bonds, there are numerous avenues available, each with their own pros and cons.
Then, you have options like exchange-traded funds (ETFs) or mutual funds which offer diversification – we’ll explain this later – right off the bat and tend to offer access to a number of different businesses, sectors or types of investments.
We specialise in ETFs at InvestEngine. You can read our full guide on what ETFs are, but essentially they’re easy-to-use, low cost, and (we think) the best option for building a portfolio in 2026.
Each investment type has different characteristics that are suitable for different types of investors. Understanding how they work is important when you’re investing.
What to consider when you invest
Before you start investing, there are a few key things you need to think about. Here are the most important ones:
1. Pay off any expensive debts
It’s important to remember that investing isn’t a get-rich-quick scheme. Sound investing is all about long-term growth.
Before you even get started with investing, though, it’s recommended that you make sure you’re not in immediate trouble if you lose your job, or some other unforeseen financial issue arises.
So, firstly, make sure you pay off any debts that are eating into your bottom line every month.
People tend to pay off things like student debt over the long-term, so this can be effectively factored into a wider financial plan. A mortgage, too, will need to be worked into the plan as an ongoing expense.
Expensive credit card debt, on the other hand, should be tackled before people start putting their money into the markets. It’s also a good idea to have a liquid rainy day fund, too. The general recommendation is to have three to six months of essential living expenses as a buffer.
2. Set your goals
A lot of us feel like we should be investing, but sometimes we’re not exactly sure what for.
Before you get started, it’s helpful to map out major milestones you’d like to hit – buying a house, saving for a wedding, etc. – so that you can plan your investing accordingly.
To get an idea of how goal setting can impact how much you invest a month, why not take a look at our regular investing calculator. Just put in your initial investment, how much you want to top up monthly and the timeframe, and you can see how much you could have at the end of your plan.
As we’ve established, your time horizon makes an enormous difference to the style of investing you should be doing. You can also plan to set aside a certain amount each month to help you reach your goals; planning is tricky if these goals aren’t clearly defined.
3. How much risk are you happy with?
Not everyone has the same attitude to the risk involved in investing. Perhaps you prefer more stable, slow growth, or maybe you like your investments with more risk and therefore more potential for higher returns.
Generally speaking, those investing for the long-term are able to take on more risk than those investing for, say, a couple of years. This is because, over a long enough time period, short-term fluctuations in the value of your investments doesn’t matter so much.
So, how much risk should you take on?
It depends. As we say, the longer you invest for, the more risk you can generally take on. However it also needs to suit your temperament; maybe don’t take on more risk if you’re likely to panic a bit if markets wobble (which they invariably do at times).
Equally, if you know you might need to access some of your investments in the short-term, you probably don’t want a huge amount of risk. The reason is that you want to avoid having to sell when markets are down. Chasing returns is obviously important, but so is reducing stress.
4. Pick the right provider
This is a vital, and often overlooked, difference maker when it comes to long-term investing. Choosing the right platform to invest with can have a serious impact on the value of your investments over time, even if you’re building your portfolio yourself.
Watch out for high fees. This is probably the biggest differentiator between investment platforms for most people.
We don’t charge any on our ISAs or our SIPPs, but a lot of platforms do and the costs can add up. In fact, all you pay with InvestEngine is the underlying costs for the ETFs (the assets that make up your portfolio), which are low.
As your portfolio (hopefully) grows, higher fees can significantly eat into returns. When you stretch the impact out over five or 10 years, the difference to the total can be shocking.
Also, make sure you won’t have to pay to access your cash early – again, you don’t with us – or give notice when you take money out. Every company will operate slightly differently, so it pays to do your research.
What is diversification?
One important concept to understand is diversification. Put simply, this is the process of spreading your investments out across numerous businesses, geographies, sectors or asset types to spread the risk attached to each one.
In theory, any losses made in one area can be offset by gains made in another. This is why, generally speaking, diversification is used as a risk management tool. It is, in simple terms, the opposite of putting all your eggs in one basket.
We see effective diversification as a crucial part of any long-term investment strategy. The beauty of using ETFs to build a portfolio is that, on the whole, they provide diversification right off the bat.
Take a look at our full explainer on how to build a portfolio using ETFs. Because they can hold thousands of companies in a single asset, the risk is spread and growth should, in theory, be relatively smooth.
How to build a portfolio
Building a portfolio of ETFs is all about choice. You can choose to invest in an ETF that reflects the performance of a particular market, like the US or the UK, or you can choose an ETF that reflects a sector like AI or energy.
For a lot of people, choosing a portfolio comes down to achieving a spread across the major world markets. So, for example, you might have an all-world tracker alongside an S&P 500 tracker (to cover the US) and a FTSE 100 tracker (to cover the UK).
As you can see in our rundown of the most popular ISA ETFs of 2025, the top three were all broad index trackers. These were:
- Vanguard’s S&P 500 (VUAG) – tracking the biggest US stock market
- Invesco’s FTSE All-World (FWRG) – tracking the global stock market
- Vanguard’s FTSE All-World (VWRP) – also tracking the global stock market
These aren’t recommendations, however. Choosing the specific ETFs you want in your portfolio comes down to personal preference and a bit of research.
Check whether or not the ETF pays an income, the underlying ETF fees, the number of companies it invests in, etc. It’s up to you to choose which industries and geographies you want to focus on.
The role diversification plays
The one key thing to consider is diversification, which we’ve already touched on. When selecting ETFs, it’s a good idea to check that there’s not too much overlap between your choices – most major tech ETFs are likely to contain one or all of Apple, Meta or Microsoft, for example.
Investors will often choose to spread their investments out geographically. Investing in one market – focusing on the FTSE, for example – opens you up to particular market stresses and additional risk in the event that something unique happens to that area.
This is, fortunately, less complicated than it sounds. Just get started on InvestEngine and you’ll see how easy it can be to set up a truly global portfolio in a matter of minutes.
A shorter investment time horizon means you’ll probably want more stable assets like bonds. A longer term investment can and probably should include more risky equities – it’s a balancing act.
Why should you invest?
So, you have enough information to consider getting started with an investment portfolio of your own. The question now might be why is it important to invest?
Investing is a vital part of long-term financial planning – it can help you to build your wealth, to meet your financial goals, to grow your cash against inflation, to save on taxes (in some cases) and to save for retirement.
You don’t need much to get started, either. With InvestEngine, the minimum investment is just £100, and you can set up a regular Savings Plan for those little-and-often top ups.
For the price of a few cups of coffee a week, you can start building your finances for the future and getting to grips with the world of investing.
Important information
Capital at risk. The value of your portfolio with InvestEngine can go down as well as up and you may get back less than you invest. ETF costs also apply.
This communication is provided for general information only and should not be construed as advice. If in doubt you may wish to consult a professional adviser for guidance.
Tax treatment depends on personal circumstances and is subject to change, and past performance is not a reliable indicator of future returns.