The Power of Putting Your Money to Work

Most of us know we should be setting money aside for the future. I’ve always known that’s important — but for a long time, I wasn’t sure where that money should go. Should I keep it in cash? Should I invest it?

For me, the answer is both — but for very different reasons.

Savings: My Financial Safety Net

Cash savings are my first line of defence against life’s surprises — the broken boiler, the car that won’t start, or an unexpected gap in income.

I aim to keep three to six months’ worth of expenses in an easy-access account. This isn’t about making big returns; it’s about knowing I can handle the unexpected without selling long-term investments or taking on debt.

Of course, I know cash has a drawback: inflation. Even with interest, the value of my savings can be eroded over time, meaning that in real terms, my money might buy less in the future than it does today.

Investing: Growing My Wealth Over Time

For me, investing is about putting money to work over the medium to long term — five, ten, or even twenty years — with the aim of generating returns that outpace inflation.

This could mean:

• Buying shares in companies.
• Lending to governments or businesses through bonds.
• Pooling money with others via investment funds.

I know investments carry risk — their value can rise and fall — but with time, that risk becomes more manageable. Historically, long-term investors have seen stronger returns than savers.

A major reason for that growth is compounding. When I reinvest my returns, those returns start generating their own earnings. Over decades, that “growth on growth” can have a dramatic effect.

Starting Small Still Works

I used to think investing was only for the wealthy, but I’ve learned that even small amounts can grow significantly.

For example*:

• • £25 invested weekly for 30 years = £39,000 total contributions.
  • At an average annual return of 4.5%, this could grow to £81,000.
  • That’s £42,000 in growth — more than double the amount I put in*

The lesson for me is that the most important factors aren’t timing the market perfectly, but staying consistent and giving my money time to grow.

Managing My Risks

No investment is risk-free, but I can use smart strategies to manage those risks:

• Diversification — spreading my money across shares, bonds, property, and regions so I’m not relying on any one thing.
• Time horizon — knowing that investing for 20 years gives me more time to recover from downturns than investing for just 3 years.

The longer I stay invested, the better my chances of benefiting from the market’s long-term upward trend.

Finding My Balance

For me, it’s not about choosing between saving and investing — it’s about combining them:

• Savings give me stability.
• Investments give me growth.

The right mix depends on my goals, timeframes, and comfort with risk. Starting early gives me the best chance to build a resilient, rewarding financial future.

Why I Value Financial Advice

According to research by the International Longevity Centre (ILC), people who took professional financial advice between 2001 and 2006 were, on average, £48,000 better off in pensions and financial assets a decade later than those who didn’t.**

The benefits were even greater for people with less disposable income — and higher still for those who sought advice more than once. Over ten years, the combined gains from financial advice were estimated to be around 2,400% greater than the cost of that advice.

In Short

Savings keep me safe. Investments help me grow. Together, they give me the best chance of achieving my goals — and the peace of mind that comes from knowing my money is working as hard as I do.

If you want help understanding the principles of investing and compounding, please get in touch via clio.livingston@sjpp.co.uk or 07404 287911.

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up.  You may get back less than you invested.


Investing does not provide the security of capital associated with a deposit account with a bank or building society.

*These figures are examples only and they are not guaranteed - they are not minimum and maximum amounts. What you get back depends on how your investment grows and the tax treatment of the investment. You could get back more or less than this.