Why Invest?
And why not investing is your biggest financial risk…..
Over the long run, staying out of the stock market is one of the riskiest financial decisions you can make. Let’s look at the numbers. Since 1926, global stocks have returned about 10–11% per year before inflation (around 7% in real terms). Cash in a bank account has barely kept pace with inflation, meaning your real purchasing power has slowly eroded. Bonds have done better than cash, but still lag stocks by several percentage points each year. That gap sounds small. It isn’t.
This is the magic of compounding – the most powerful force in wealth creation.
£100,000 invested at 7% real return (a relatively conservative stock-market assumption) becomes ~£760,000 in 30 years. The same £100,000 left in cash, earning 0% after inflation, is still £100,000 in today’s money. You have given up two-thirds of a million pounds simply by doing nothing.
Compounding works quietly. In the first decade you barely notice it. By the third decade it feels like a rocket. Inflation is the silent thief that makes investing non-optional. At 2–3% inflation (the Bank of England’s target), today’s £1 million buys what £415,000 did thirty years ago. If you want your money to work for you instead of slowly disappearing, you have to own pieces of growing businesses – i.e. shares.
But isn’t the stock market risky?
Yes – in the short term. In any given year the market can fall 30% or more. That feels terrible. Since 1926, the S&P 500 has experienced 13 bear markets (drops of 20% or more), but has always recovered, with the average recovery taking just over 4 years. Over decades, the direction is relentlessly upward because profitable companies reinvest, innovate, and grow. The long-term chart of the stock market is not a straight line; it’s a line with scary dips that, when viewed from far enough away, look like minor blips on a journey.
The biggest risk most people face is not a market crash. It’s the risk of reaching retirement with too little money because they never got started, or because they paid decades of fees that quietly ate half their potential wealth.
You don’t need to be a genius to capture most of the market’s return. You need three things:
A decision to start (today, not “one day”).
An overarching investment strategy. This could be as simple as buying low-cost, well diversified index trackers, or a more sophisticated approach requiring a more rigorous approach to security selection.
The discipline to leave it alone for decades.
At Y invest, we don’t want to manage your money. We want to give you the knowledge, the tools, and the confidence to take control – and then step back while you keep more of what you earn.
