As a child I always wanted to be a farmer. I spent hours at the bottom of our garden watching tractors pass by, dreaming about driving one. At ten, I plucked up the courage to ask a farmer if I could help during the holidays. I never thought about pay. I mucked out cow sheds, stacked bales, and helped milk the cows. It was heavy work. At the end of the summer, to my surprise, I was handed a cheque for £30. It worked out at less than a pound a day, but I was delighted.
More importantly, it sparked something in me: an interest in money and the desire to earn more. I began cutting lawns, working on other farms (this time properly remunerated), and doing a paper round. Each evening, I carefully logged my hours in a notebook and ticked them off when paid.
People of a certain age will remember the NatWest ceramic piggy banks. Open a children’s account, and you would become a proud owner of the baby pig Woody. As your savings grew, you earned more pigs, culminating in Sir Nathaniel Westminster once you hit £100. I flew past this, more focused on my money-making activities than schoolwork.
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At 12, I had built up a decent savings pot and started wondering how to make it grow further. That’s where my love of investing began.
It was the late Eighties and early Nineties, the heyday of Margaret Thatcher’s privatisations. Alongside farming, I loved listening to the news (we didn’t have a TV), and I kept hearing how ordinary people could buy into companies and make money.
I asked my dad to set up a share account on my behalf. The first shares I bought were the various electricity and water companies. There was no deep analysis involved, but buying those shares helped me to understand the basics.
You owned a piece of a company; if it made profits, it paid dividends. Back then, dividends arrived as cheques in the post — they felt much more real than they do now. Shares often rose in value, and sometimes other companies bought them out, bringing another cheque.
As a small boy, Alex wanted to work with animals but his first stint on a farm left him determined to earn more money
I also invested in businesses I knew. I used to cut the lawn for a wealthy businessman in my village who was the chairman of a listed company. Seeing his big house, I figured he knew what he was doing so I bought some of his firm’s shares. A year later, it was taken over, and I made what felt like a fortune.
My best percentage gain was in GW Pharmaceuticals, which made medicines from cannabis. I bought stocks in my early twenties for just £100. More than 20 years later, after a move from the Alternative Investment Market to the Nasdaq, a takeover and numerous ups and downs, I sold them. My £100 had turned into about £7,500. If only I had put in more!
I also have a long list of “great ideas at the time” that turned out not so well. One that stands out is an investment in African minerals that I made in my late thirties. My holding shot up almost immediately — I think at one point it was worth three or four times my investment. Then, just as rapidly, it went to zero and never recovered.
The game changer
But by far my most life-changing investment was in the investment firm Hargreaves Lansdown — the only company I have worked for, other than my own, Wealth Club. It made me a millionaire.
At 22, I answered an advert in the Bristol Evening Post: “Unemployed graduates wanted for 3-month contract in stockbroking back office.”
At the time Hargreaves Lansdown was a private company with 170 staff. I landed a role at the bottom but quickly rose through the ranks. Within a year or two, all employees were invited into share schemes. You could pay in monthly, and after five years withdraw the cash or convert it to shares. I participated in all the schemes that ran in my 14 years there and took other opportunities to buy more — I even remortgaged my house to do so.
When Hargreaves Lansdown floated in 2007, those who had joined the schemes (whatever their role in the company) became wealthy — some made tens of thousands, some hundreds of thousands and some many millions.
Now, I keep things simple
I’ve been investing for nearly four decades, and I’ve never really stopped. My portfolio has grown beyond shares and funds to include start-ups through venture capital trusts and enterprise investment schemes, as well as private equity and property.
My style has changed, though. In my early years, I enjoyed scouting out individual shares. But over time I found I owned too many, and I simply didn’t have the time or energy to keep on top of them.
These days my approach is simpler. I focus mostly on funds, and recently moved a chunk of my portfolio into a managed service run by my company, Wealth Club, which was designed with people like me in mind. It saves me time and keeps things disciplined.
So, what’s my advice for people thinking about investing for the first time? First, don’t overthink it — just start. Don’t worry about risk too much. You shouldn’t be betting the house on it. Buy a few shares in companies you know, with small amounts. Or buy a couple of funds. If you want help, platforms offer model portfolios to save you choosing. Once you’ve bought something, keep an eye on it. Log in, watch values rise and fall, see dividends arrive, read the news about the businesses you own. Soon it will click, and you should feel ready to invest more. It really isn’t difficult.
If you steadily build a portfolio of funds or shares, investing bit by bit over the years, you’ll almost certainly come out ahead. At its core, you are simply investing in businesses. Over time, economies grow, companies become more profitable, and those profits return to shareholders through dividends or rising share prices — often both. Yes, there will be failures, but that’s part of investing. Unless you believe that the entire economic system is doomed to collapse and never recover, you should be investing. Of course, do all of this in an Isa or a pension to shield your returns from the taxman.
Talking of pensions, put as much in as possible and start as soon as you can. The tax relief is great, and if you’re employed, your employer contributes too. And the thing many people dislike about pensions — that you usually can’t access them until you are 55 (57 from April 2028) — could well be their best feature. It means that you can’t spend it and you should have a decent pot for retirement.
Finally, if your employer offers some sort of share save scheme, take it. They’re usually low-risk for employees and if it goes well — and there are numerous examples of this — you could be made for life.
Alex Davies is the founder and chief executive of Wealth Club, an online investment service for high-net-worth and sophisticated investors
