How to invest £100, £1,000 and £10,000

How much money you have to invest can influence how you invest it. If you have £100, you might take one approach, a different approach with £1,000 and yet another with £10,000.

Article updated: 27 April 2020 2:00pm Author: Michael Baxter

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First golden rule — ISA

The first golden rule, wherever possible, invest via an ISA — with an annual limit of £20,000, it matters not whether you have £100, £1,000, or £10,000, you can invest via an ISA and have any dividends or capital gains tax free.

Second rule — time

The second golden rule of investing is that time makes a difference. If you can double your money every five years, within 20 years £100 becomes £1,600. Within 40 years it becomes £25,000.

Third rule — why

The third golden rule: work out why you are investing. If want to be rich and you only have £100 to invest as a one-off, be prepared for a long wait. If you start when you are 20 and on the assumption that you double your money every five years, then you will have to wait until you are about 85 before you have a million.

If you want to leave a sum of money for your great grandchildren when your children are still quite young, then £100 could go quite a long way.

Or if you are blessed with unnatural longevity — I don’t know, you are a vampire or something, and want to plan 100 years ahead, then it will be quite surprising by how much £100 can grow.

If, by contrast, you can afford £100 every month, then that makes quite the difference. Again, assuming you can double your money every five years, and you start at 20, then you will reach a million by the time you are around 48.

Not so realistic

Then again doubling your money every five years is not so easy. The FTSE 100 has, assuming dividends are reinvested, doubled on average every 18 years or so (after inflation) since it was founded.

If on the other hand, you had invested £100 in Apple back in 2003, your money would now be worth £27,000 or so.

Fourth rule: risk

That takes me to the fourth rule, your risk.

If you are willing to take a risk, and would not cry yourself to sleep if you lost £100, then by all means find a company you really like, plough your money into it, say lots of prayers, and wait. Who knows, if you are lucky it may make you rich — one day.

If you want to reduce your risk, then diversification is the way you do that. But diversifying your investment when you have got £100 is not so practical, charges will eat into your money.

The best way around that is to invest in a fund or ETF, which automatically gives you some diversification.

I would say that if you have £100 to invest as a one-off, and you don’t want to risk losing it, then instead you might want to look at a quite different approach.

You can be really savvy and invest in companies that offer shareholder perks. Buy one unit of Adnams B Shares, for example and get a 15 per cent discount for purchases from Adnams Stores, via home delivery and online. 

Alternatively, if the hundred pound exists for a specific short term need, like paying a small tax bill, I would say a savings account is the way to go.

The £1,000 investor

If you have £1,000 to invest, then two major differences set in. Once again, assuming this is a one-off investment and you can double your money every five years — which to reiterate, is quite an ambitious target — then, your £1,000 gives you a 17 years or so head start. Maybe you could invest for your grandchildren rather than great grandchildren.

Alternatively, if you have very young kids, you could invest it and hope that 18 years later it could help fund college education.

The big difference though between having £1,000 to invest and £100 is diversification. All of a sudden it becomes practical to invest in more than one company — although charges can eat into your money if only invest a few hundred pounds into each company.

Of course, if you have a £1,000 a month to invest then opportunities open up.

You could create strong diversification that way, and even if your growth rate is much lower than that assumed above, such as a more realistic five per cent a year, then it would take around 35 years to reach your million.

The £10,000 investor

If you have £10,000 to invest, then you have the option of superior diversification and the potential to hit any target amount much more quickly.

A doubling every five years would mean you could turn your £10,000 into a million within 28 years or so.

If you realise a more realistic five per cent a year, and you invest your money when your child is born, it will be worth around £20,000 when they are 18 — a big chunk of college education paid for.

Funding retirement

There is another way to look at. If the purpose of your investment is to fund retirement, and you assume a more realistic five per cent a year return after inflation, and you feel you need £1 million in 2020 prices for this retirement, then this will mean:

  • That with £100 you will need 189 years.
  • With £1000 you will need 142 years.
  • With £10,000 you will need 95 years.

With £100 a month, you will need 77 years to reach a million pounds in 2020 prices, with £1,000 a month you will need 34 years.

To reach your million after say 15 years, you will need around £4,000 a month. To emphasis, this assumes five per cent a year return, after inflation.


These views are those of the author alone and do not necessarily reflect the view of The Share Centre, its officers and employees

Michael Baxter portrait photo
Michael Baxter

Economics Commentator

Michael is an economics, investment and technology writer, known for his entertaining style. He has previously been a full-time investor, founder of a technology company which was floated on the NASDAQ, and a director of a PR company specialising in IT.

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