Is £300 enough to start investing? Yes – here’s why

Lots of people have some vague idea they would like to start investing as a way to build wealth. But for many people, the idea never translates into action. There can be different reasons, but a common one is that people reckon they do not have enough money to start investing.

That is understandable. Life can be expensive and sometimes even a small amount of money for investing could be hard to gather.

But the good news is that it does not necessarily take a lot of money to start investing. Here is how someone could do it with a spare £300.

Pros and cons of starting small

One thing to watch regarding investing a small amount of money is the minimum fees and costs. They could eat up a disproportionately large amount of £300. So choosing the right share-dealing account, Stocks and Shares ISA or trading app is important.

It can also be more difficult to keep a portfolio diversified when investing £300 than with a much bigger amount, but it is possible.

While these points are worth considering, there are also benefits to starting on a small scale. It can mean someone gets going much quicker – and any beginners’ mistakes are cheaper than when much larger amounts are at stake.

Making a plan to invest

Setting up an ISA. or other way to buy shares, is a necessary step. But there are other things to do before actually starting investing.

Learning about how the stock market works is one. For example, valuing shares is an important part of investing so getting to grips with this is important. It also makes sense to think about what exactly you want to achieve and how you hope to try to achieve it.

For example, some investors are focused on earning passive income from dividends, while others are growth-focused and on the lookout for the next Nvidia or Tesla.

One share to consider

When starting to invest – and later on too – I think it is important to try and stick to what you know. One share I think is worth considering in today’s market for both its growth and income prospects is Hollywood Bowl (LSE: BOWL).

The current dividend yield of 5.6% certainly grabs my attention. It means that £100 invested ought to earn £5.60 a year in dividends (although dividends are never guaranteed). But Hollywood Bowl has proven it can be highly cash generative, potentially supporting future dividend increases.

I think that could also help support future business growth. Hollywood Bowl has expansion opportunities in its home UK market, as well as in the Canada where it has been growing.

That international expansion risks distracting management from the core business. Another risk I see is weaker consumer confidence eating into discretionary leisure spending.

From a long-term perspective though, I see Hollywood Bowl an attractive prospect from both a growth and an income perspective.

What income stock do we like better than Hollywood Bowl Group Plc right now?

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