How much does it take to start investing in the stock market?

The robust image that many people have of city businesses can mean that for a first-time investor, even thinking about this question can seem intimidating.

In reality, however, someone can start investing with more or less any spare money they have. Let’s say someone has £20 a week to spare. Here’s how they could utilize it to start buying shares.

It’s a myth that investing requires a lot of money

Some types of investments require high initial costs.

As many shares cost just a few pounds or even less, this is not the case when investing on the stock market.

Starting miniature can provide some benefits, such as being able to start your business immediately without having to wait years to save capital and, hopefully, a lower cost for beginner mistakes compared to if there was more involved.

What about diversification?

Spreading your risk by owning different stocks is a plain but effective risk management strategy. And £20 a week is over £1,000. pounds per year. This is enough for someone to diversify into several different stocks.

One possible disadvantage for someone looking to start investing with modest sums is the impact of minimal fees and transaction costs.

This is one of the reasons why it pays to look into choosing a stock trading account, stock exchange and shares ISA or trading app.

Thinking large – miniature

Diversification is not the only way someone may decide to start investing using the same approach they would take if they had more money at their disposal.

It’s another thing to build a portfolio of high-quality stocks that hopefully offer the potential for long-term financial gains (whether through capital appreciation, dividends, or both).

When I think about how to find stocks to buy, I follow the approach of billionaire investor Warren Buffett.

In other words, stick to what you know and understand, look for companies that appear to have sustainable competitive advantages, and try not to overpay for stocks.

One action to consider

One UK stock that investors should consider is an example of this type of approach FTSE100 financial services company Standard life (LSE: SDLF).

The pensions specialist operates in a market area that is characterized by high entry barriers due to the complicated regulatory environment.

A enormous, long-term customer base, robust brands and deep knowledge of financial markets are also things that I think could potentially lend a hand it do well.

Standard Life intends to boost its dividend per share each year. In addition, the dividend yield is 7.1%.

In layman’s terms, this means that £100 invested today will hopefully yield a dividend of £7.10 per year, even without taking into account any growth. It’s over double FTSE 100 average.

But no company’s dividends are ever guaranteed. Weak consumer sentiment and a lack of spare cash could cause some policyholders to sluggish contributions to their pensions, which could hurt Standard Life’s earnings.

However, as a long-term investor, I like the prospects of this proven blue-chip company and consider it worth considering.

Is it worth investing £5,000 in Standard Life now?

If investing expert Mark Rogers and his team have stock advice, it can pay to listen. After all, Twelfth Magpie’s flagship Share Advisor newsletter, which it has run for almost a decade, provides thousands of paying members with the best share recommendations from across the UK and US markets.

Mark believes there are 6 standout stocks that investors should consider buying right now. Want to see if Standard Life is on the list?

Christopher Ruane does not hold any position in the companies mentioned.