When I first started investing, I honestly didn’t have a plan. I was constantly reacting to the markets, throwing in more money when stocks were climbing and pulling back when they dipped. I was doing exactly what you’re not supposed to do—buying high and, sadly, missing the opportunity to buy low. My portfolio didn’t have any real direction, and I wasn’t making much progress toward my financial goals.
Fast-forward to today, and things look pretty different. I’ve adopted a much more disciplined approach—one that I wish I had figured out sooner. Now, I stick to a plan where I invest a set percentage of my income each month. Currently, I invest more than 10%, but if I could go back and do it all over again, I’d start with 10% and build from there.
In this post, I want to share my experience of how investing just 10% of your income can make a big difference over time. I’ll talk about the mistakes I made, the lessons I learned, and how you can get started—even if you’re new to investing.
My early mistakes
I think most beginners, like me, get caught up in the ups and downs of the market. When stocks are going up, it feels good to invest more. And when they go down, the instinct is to stop and protect what you have.
But this kind of reactive behaviour means you’re doing the opposite of what successful investors do—you’re buying when things are expensive and missing out when they’re cheap.
Looking back, I can see how short-sighted that was.
If I’d stuck to a consistent plan early on, I wouldn’t have made those emotional mistakes. But hey, hindsight is always 20/20, right? What I’ve learned is that investing isn’t about reacting to the market or trying to time it. It’s about having a set strategy that keeps you focused on the long term, no matter what the market is doing.
Why 10% is a good starting point
Setting aside 10% of your income for investing might sound like a lot at first, but trust me, it’s a solid starting point for a couple of reasons.
First off, it’s manageable. Even if you’re working with a tight budget, you can almost always find a way to cut out a few unnecessary expenses to free up that 10%. Think about how much money we spend on little things like takeaways, coffees, or impulse buys. Once you take a closer look at your spending, you’ll likely find that 10% is possible without too much sacrifice.
Second, 10% is enough to actually make a difference. Small monthly contributions can really add up, especially when you factor in compound interest and market growth. Starting with 10% helps you build the habit, and as you see your investments grow, it gets easier to stick with it. Plus, once your financial situation improves, you can always bump up that percentage.
Personally, I now invest more than 10% of my income, and that’s only because I’ve seen how powerful it can be. But if I were starting today, 10% would be my go-to.
Let’s be real: psychologically, investing 10% of your income each month isn’t always a walk in the park. You have to prioritise your future self over the temptation of spending that money now. And, believe me, it’s not easy.
It’s tempting to spend that money on something fun or flashy, like a vacation or new shoes. But I’ve learned that long-term investing is far more rewarding than the instant gratification of spending.
At times, it felt like I was living paycheck to paycheck, even though I wasn’t doing badly financially. The reason? Most of my money was tied up in various investment and savings platforms, leaving just enough in my current account for the essentials: unexpected expenses, monthly credit card bills, and my mortgage.
Investing is as much a mental game as it is a financial one. You have to keep reminding yourself that every dollar you invest today is working for you in the future. It’s not money lost; it’s money that’s growing. And that mindset takes time to build.
Choosing the right investment strategy
When I decided to stick to investing a set percentage of my income, I started using a strategy called dollar-cost averaging. Basically, it means you invest the same amount of money at regular intervals—like every month—regardless of whether the market is up or down. The idea is that over time, you end up buying more when prices are low and less when they’re high, which smooths out the bumps in the market.
I only started using this strategy a bit over a year ago, but I wish I had learned about it sooner. It takes a lot of the emotion out of investing and helps me stay focused, even when the markets are swinging wildly.
I also make sure to diversify my investments. Right now, my portfolio includes a mix of stocks, ETFs, real estate, crypto, and bonds. Diversification is key because it helps manage risk. By spreading my money across different types of investments, I’m not overly dependent on any one thing. For example, when the stock market is volatile, my bonds or real estate investments can provide some stability.
This approach gives me peace of mind. No single investment makes or breaks my portfolio, and I can let the ups and downs happen without stressing out because I know my strategy is built for the long term.
Advice for beginners
One of the hardest parts of investing is that you don’t see the results right away. You put aside 10% of your income, but there’s no immediate reward. Unlike buying something tangible that you can enjoy, investing is a slow game. It’s easy to get discouraged if you’re used to quick wins, but I’ve learned that the best results come from playing the long game.
The money I invest today is money I won’t touch for at least 10 years, maybe even longer. It’s not about short-term gains; it’s about building a secure financial future. And the longer I’ve stuck with this mindset, the more comfortable I’ve become with it. I’ve started to appreciate the slow, steady growth of my portfolio.
If you’re considering starting to invest but are hesitant to commit to 10% of your income, my advice is to start anyway — even if you start smaller. The key is to build the habit. Maybe you can’t do 10% right away because of other financial obligations like a mortgage or student loans. In that case, start with 5% or even 2%. The most important thing is to begin.
It’s a common misconception that if you don’t have a lot of money, investing isn’t worth it. But that’s not true. Every little bit counts, and the earlier you start, the more time your investments have to grow. Did you see the graph above that shows what happens with $200 invested every month for 15 years? It snowballs over time!
Conclusion
Investing 10% of your income might seem worthless or unachievable, but it’s an incredibly powerful way to build wealth over time. The key is consistency and a long-term mindset. Whether you’re starting with a modest portfolio or you’re ready to dive into diversified investments, the most important step is just to start.
My own journey from inconsistent investing to a disciplined 10% (and beyond) has transformed my financial health. I hope my story inspires you to take the leap, stay committed, and watch your wealth grow. Remember, you’re investing in your future, and that’s something worth prioritising.
