Why invest

Investing your savings in the stock market is a counterintuitive activity. Not only because succeeding in this field often requires behaving very differently from how we would if we wanted to learn a sport or a profession. But also, and above all, because for some psychological reason, when we think about investing, we tend to believe it's an activity reserved for the very wealthy or the very experienced. While investing helps very wealthy people become wealthier (provided they have a minimum level of competence or a good — and honest, I'd add — adviser), paradoxically, investing your savings helps ordinary investors more — the very people who actually invest the least and are furthest removed from this world.

Here's an example: £150 a month invested for 30 years with an annual return of 9.02% (the historical performance of the MSCI World index since 1987) returns roughly £276,000 — a figure that can make a real difference in our lives, whether to top up our future pension, pay off our mortgage, or perhaps work less in the future. For someone who's already a millionaire, it wouldn't change anything. 9.02% will sound like too high a return, you'll say: even at 4% we'd get around £104,000, which wouldn't change Warren Buffett's life, but probably would change the average investor's.

Source: own calculations. Simulation with a constant monthly contribution of £150, simplified annual return, 30-year time horizon.

A still-fragmented picture across Europe

Compared to when I started working in this industry, particularly in ETFs, back in 2018, the situation has improved, although it remains fragmented across Europe. In the UK, around 35% of the population has invested in the stock market at some point (source: FCA, official 2025 figure — other estimates, using a broader definition, put it as high as 41%), helped in part by the widespread availability of Individual Savings Accounts (ISAs). In Germany, around 19.9% of the population own shares, equity funds or ETFs (14.1 million people, source: Deutsches Aktieninstitut, official 2025 figure) — ETF savings plans (ETF-Sparpläne) have played an important role in bringing Germans into this world, making Germany the leading ETF market in Continental Europe. In France, around 17% of French people hold equity investments (source: AMF; only 2.5% of the population made at least one stock market transaction in 2024), often through the tax-advantaged PEA account (Plan d'Épargne en Actions). In Italy and Spain, a great many investors still invest through products offered by banks, such as mutual funds.

Why investing matters, especially for us ordinary mortals

There's a charming Italian song from the 1940s called "Mille lire al mese" ("A Thousand Lire a Month"). In short, without boring you too much: in 1940s Italy, the average Italian would apparently have been happy living on fifty cents a month. I don't know exactly how people lived in those years (wartime hardship aside), but with fifty cents you could pay rent, take the odd trip, do your shopping, and lead a dignified life. Fifty cents in 2026, in Rome, is the price of a third of a coffee. In Berlin, fifty cents won't even get you through the door of a café to ask for one.

We all need to invest our savings because we want to avoid a future, 40 years from now, where our average salary today wouldn't even buy a third of a coffee. Investing your savings is necessary because it protects you against the rising cost of goods and services over time — inflation. The main goal we should have when investing is to keep our purchasing power unchanged over time. And there's no better way to do that than by investing in the stock market.