Investing – an explorer’s guide

Investing can feel like taking a journey to a new country. It’s generally a good idea to make some preparations first, so getting your hands on a travellers’ guide can help. 

If you’re about to set off, here’s our (quick-ish) guide to navigating your way around investment land and making the most of it as you go. 

About investment land

Investment land is one of opportunity and choice, where there’s always something new to see and do with your money. 

Taking a journey can be financially rewarding, but it’s also possible to lose money in the process. So we wouldn’t recommend going without learning some basics about the language, rules and culture of investment land, and having at least one destination in mind. 

The language

The language you will often hear in investment land is financial jargon, so if you don’t speak it you may find it helpful to have a financial jargon-to-plain English dictionary to hand. You will find many available online. Here’s an example for some key phrases.

Asset class A group of investments with similar traits. Some of the most common asset classes include bonds, shares and property.
Distribution An income you can earn from funds.
Diversification Spreading your money across different investments. This helps manage risks when investing. Diversifying by asset class is one option. You can also diversify by sector, geographical region and (in the case of funds) investment style.
Dividend An income you can earn from shares.
Equities Another name for shares.
Fund A way of combining your money with that of others to benefit from the expertise of a professional fund manager. Read our article on funds for more. 
Sector A particular industry or area of the economy you can invest in. For example, technology, energy, healthcare.
Style The way a fund invests. The two main styles are active and passive, but there are lots of variations in each, especially for active investing. 

The rules

There are quite a lot of them for investment companies to follow, most of which are there to protect you. Some of the more important rules are about the information you have to be given before investing. This aims to help you understand the risks you are taking and to compare the ins and outs of different investments, including any costs you might have to pay.

For anyone thinking of investing in a fund, it’s particularly worth getting your hands on the Key Investor Information Document (KIID) or Key information Document (KID) depending on the type of fund it is. You can get this from the fund management company. Don’t commit your money to a fund without reading its KIID or KID or you might not understand what you are getting into. 

Learn about comparing funds

The culture 

Investment companies are always keen to help you make the most of your journey. But the rules in place for your protection can put limits on how they do that. Unless you pay someone to give you advice, expect the focus to be on facts and figures to help you make up your own mind.

Risk ratings

Describing the different risk levels associated with different types of investment, to help you get a feel for what you’re likely to be comfortable with.

Investment shortlists

Coming up with shortlists of potential investments at different risk levels that meet certain standards set by the investment company’s chosen experts.


Tools and calculators

Providing tools to help give you an idea of what you might get back from your investment in different scenarios (although what these tell you is never guaranteed). You’ll find one from Santander at the end of this page.

What’s popular

Telling you what investments are popular with other investors. This can be interesting but be aware that what’s suitable for others isn’t necessarily suitable for you, and there can be dangers in following the herd. 

Your destination

Your investment journey will be better for having a good idea of the destination you want to reach. If you’re not sure what the money you’ve invested will be used for, it could be hard to know where to start. This can be specific, such as for the trip of a lifetime or for your child’s or grandchild’s education, or a little more general, such as building up a decent pot of money for later life. 

Your exact goal will always be personal to you. The most important thing is that you do have some kind of end goal to focus on. This will likely shape all of your investment plans, from how much to invest and for how long, to what you invest in and how much risk you choose to take with your money. 

About setting goals

Your modes of transport

Once you’ve got a destination in mind, the mode of transport (that is, the actual investments) you choose to get there can have a big effect on your ability to reach your end goal. Here are some examples to help explain.

Some investments are riskier than others 

As a general rule the more risk you take the greater the potential rewards, but also the greater the potential losses. It helps when choosing your investments if you have an idea of where on a sliding scale of risk you’re likely to be most comfortable.

There’s a standard scale you can use to compare options if you’re investing through a fund. You can find this in the fund’s KIID or KID, depending on the type of fund it is. 


The scale you’ll find in a KIID is worked out differently to that you’ll find in a KID, so it’s best to make sure you are comparing like with like if you can. But if that isn’t possible it should still help give you the general idea.

Some investments will cost you more in charges than others

Any charges you pay will eat into the amount of money you get back from your investments, so you’ll want to decide if you think they’re worth it in the long run. As in all walks of life, shopping around can make a big difference. You’ll usually pay more for funds that are actively managed than for funds that just track a particular market or index (like the FTSE 100, for example). 

Different investments can help you achieve different things 

Some types of investment are designed to generate an income. Others are more about getting you to your final destination as quickly as possible by focusing on growing your money. 

Tip: With a fund you can often choose between a version that pays out any income it earns you, or to a version that always puts the income back to help grow your investment in it. Look out for income (‘inc’) and accumulation (‘acc’) versions of the same fund. The income version pays out and the accumulation version puts any income from the fund back in.  

Keep your plans under review

Once you’ve got a clear destination and have chosen your mode of transport you’re ready to go. When your journey is underway it’s usually better in the long-run to keep focused on your destination and not get too distracted by anything along the way (the ups and downs triggered by an unexpected election result, for example).

Sometimes plans do have to change though, perhaps if there are unforeseen events, you decide on a different destination after all or find your original mode of transport really isn’t working for you anymore and that you could do better elsewhere.  

Enjoy the journey

Investing is all about making the most of your money. It’s something anyone with money available can potentially do. That includes savings that aren’t paying enough interest to keep up with rising prices and you want to see working harder.

Yes, investment values can go down as well as up and you could get back less than you put in, but investing could also make a positive difference to your financial future.


Investment calculator

Estimate how your investments could perform using our calculator below.

Please enter a number between 5 - 20 years.

Minimum 5 years

Please add an amount between £0 - £5000000 or enter zero.

Please add an amount between £0 - £5000000.

Minimum £0 (a value of zero is allowed if you opt for a regular monthly payment)

Please add an amount between £0 - £5000000 or enter zero.

Please add an amount between £0 - £5000000.

Minimum £0 (a value of zero is allowed if you opt for a lump sum only investment)

The total amount invested over 5 years is £0,000

What could your investments be worth

If they grow by 1.5% per year £0,000

If they grow by 4.5% per year £0,000

If they grow by 7.5% per year £0,000

These calculations are for illustration purposes and are not guaranteed and are not a reliable indicator of future performance. The total charges assumed in the calculations above are 1.35% per year.

We have assumed average total charges of 1.35% per year within the calculator.  This is made up of the Investment Hub Platform Service Fee at its maximum level of 0.35% per year, plus an assumed total fund charge of 1% per year. This is the average fund charge for a Santander Asset Management (UK) Fund. It is important to check the actual charges for an individual fund as well as the Platform Service Fee that applies to your level of investment. There is a reduction in the Platform Service Fee when the value of your investments are above £50,000. 

We have assumed monthly payments are received in advance.

This calculator does not take into account any potential tax that may be payable on the returns you receive and does not provide any advice. If you are unsure what level of returns you would need, you should speak to a financial adviser, before making any decisions.