A Simple Investing Strategy You Can Start Today

Welcome to Financial Fluency - your monthly guide to mastering financial English, learning how money works, and making confident financial choices.

In this issue:

• A Look at the Markets: Performance May 2026

• A Simple Investing Strategy You Can Start Today

• Proverb of the Day

• We value your feedback

• Expression of the Day: Seasons of your Life

• Interactive Quiz

• Whenever you are ready, here is how I can help you

A Look at the Markets: Performance May 2026

Vanguard FTSE All-World ETF (Accumulating)

A very good month for the Vanguard FTSE All-World ETF (Acc) with a gain of 5.43% in euros. Markets appear to be pricing in a resolution to the conflict in the Middle East. It is worth noting that this reflects the market's interpretation of current events and the political climate - it does not mean that a resolution is guaranteed.

iShares Core S&P 500 UCITS ETF (Accumulating)

A similar return for the iShares Core S&P 500 UCITS ETF (Acc) with a gain of 4.70% in euros. As with the FTSE All-World, the performance reflects the market's optimism around a potential resolution to the Middle East conflict.

Vanguard EUR Corporate Bond ETF (Accumulating)

A good month for the Vanguard EUR Corporate Bond ETF (Acc) with a gain of 1.02% in euros. As always, we expect far less volatility from this ETF compared to equities. In that context, a monthly return of 1.02% is a very good performance.

Bitcoin Monthly Performance $BTC ( ▲ 2.7% )  

A negative month for Bitcoin with a loss of approximately 3% in US dollars which is well within normal Bitcoin volatility. Some traders may see a bullish sign that Bitcoin traded above $80,000 for a few days in May, its first time at that level since February this year. Whether this proves to be a meaningful recovery or a temporary move remains to be seen.

A Simple Investing Strategy You Can Start Today

Why the first 10 years do the heavy lifting

Every morning, millions of Europeans spend €3 or more on a croissant and cappuccino without a second thought.

What if that same small daily amount was quietly building a retirement fund in the background? This month, I will show you a complete investing strategy you can start today.

You may be surprised by the results, but the most important message is the significance of the first 10 years.

Assumptions

As with all calculations like this, we need to establish a few assumptions.

We will continue where we left off last month with our 25 year old at the start of their investment journey, having made an initial €1,000 investment. For simplicity, and because Bitcoin's short history makes long-term projections unreliable, we will assume a 100% global ETF portfolio. Our chosen index is the FTSE All-World index. The Vanguard ETF we discussed last month tracks this closely. While the Vanguard ETF itself has limited history, the index it follows has a well-established long-term record.

We will assume an annual return of 8%, based on the FTSE All-World index's long-term historical average. This is a conservative but realistic figure that already includes dividend reinvestment. As with all investments, past performance is not a guarantee of future results.

We will assume our 25 year old makes monthly contributions of €100 for 40 years, taking them to around retirement age.

The Calculation

We do not need to go into the exact mathematics here, though they are straightforward if you want to explore them further. It is much easier to use an online investment calculator or an app called 10bii, which is available for both iPhone and Android.

Using the assumptions above, the result is striking.

A €1,000 initial investment plus €100 per month, at an average annual return of 8% over 40 years, produces a portfolio value of €373,374.

The First 10 Years

Let us return to our 25 year old and split the 40 year calculation into two parts.

If our 25 year old invests €1,000 plus €100 per month for the first 10 years only, and then leaves that money untouched for a further 30 years, the portfolio grows to €224,338.

If they then continue investing €100 per month for the remaining 30 years but start from zero, that second pot grows to only €149,035.

Together, these two figures add up to €373,374 - exactly matching our 40 year calculation.

The Best Time to Start is Now

The figures above reveal the importance of starting your investing journey early.

During the first 10 years, just €1,000 and €100 a month grow to €224,338 by retirement. That is 60% of the final portfolio, generated in the first ten years - just one quarter of the total journey. The remaining 30 years of contributions produce only 40%. Due to the power of compounding, early investments have a disproportionate effect on the final value.

I know that many of our readers are not 25 years old. But there is a Chinese proverb that captures this perfectly: "The best time to plant a tree was 20 years ago. The second best time is now."

How Much is Enough?

There are some simple assumptions you can make to estimate the size of retirement portfolio you need.

Work through these four steps. First, decide how much annual income you need before tax. For this example, we will use €50,000. Second, subtract any expected state pension. We will assume €10,000, leaving an income gap of €40,000. Third, apply the 4% rule -- a widely used guideline suggesting you can withdraw 4% of your portfolio's value each year and it will continue to grow enough to compensate for inflation. Dividing €40,000 by 0.04 gives a target portfolio of €1,000,000. Fourth, use an investment calculator to work out the monthly contributions needed to reach that target.

If you are investing over 40 years, there is a simpler shortcut. Divide your target by the €373,374 we calculated earlier to find your multiplier, then multiply our investment assumptions by that figure:

€1,000,000 ÷ €373,374 = 2.68

• Initial investment: €1,000 x 2.68 = €2,680

• Monthly contribution: €100 x 2.68 = €268 per month

In other words, scale the same strategy to reach your personal target.

A word of caution: the 4% rule is a guideline, not a guarantee. Tax rules, market conditions, and personal circumstances vary significantly. As always, none of this is financial advice.

A Word on Inflation

These figures look impressive until you take into account inflation.

In reality, you will almost certainly not invest the same €100 per month over 40 years. As your wages rise (hopefully!) with inflation, you should aim to increase your monthly contributions proportionally - investing the same percentage of your income rather than the same fixed amount. This naturally protects the real value of your portfolio over time.

It is also worth remembering that different seasons of your life will bring different financial pressures and opportunities. There will be years when you can invest more, and years when €100 a month feels ambitious.

The key is consistency over perfection.

As always, none of this is financial advice. Everyone should invest according to their personal circumstances, risk tolerance and financial goals.

Proverb of the Day

Origin: This proverb is widely attributed to Chinese wisdom, though the exact source is debated. It may have origins in African proverbial tradition as well. Whatever its precise origin, the message has travelled across cultures for generations.

Meaning: The proverb acknowledges two things simultaneously -- that delay has a cost, and that delay is never a reason to give up. The first sentence carries a gentle regret; the second immediately replaces it with optimism and action.

Business English usage: In professional contexts, this proverb is used to encourage action after a period of hesitation or missed opportunity. "We should have entered the Asian market five years ago, but as they say, the best time to plant a tree was 20 years ago. The second best time is now."

Investing context: I am benefiting from this now because I still own shares that my parents bought in the 1970s and never sold. And one day, I hope to receive income from my own retirement portfolio but still pass the capital on to my children.

We Value Your Feedback!

Your opinion helps us improve and lets you suggest topics or ask Business English questions for future issues.

Expression of the Day: Seasons of Your Life

Seasons of your life - expression - the different phases or periods of your life, each with its own characteristics, priorities, financial pressures, and opportunities; used to describe how circumstances change naturally over time.

Context and Usage: Just as the four seasons bring predictable but different conditions, the seasons of your life describe the natural phases we all move through - education, early career, raising a family, peak earning years, and retirement. In business and financial English, this expression recognises that needs, priorities, and resources change over time.

Note: This is a metaphorical expression. The "seasons" do not correspond to specific ages - everyone's life follows a different rhythm. In financial planning, recognising which season you are in helps you make more realistic decisions about saving, investing, and spending.

Common Collocations:

Different seasons of your life - the varying phases and circumstances over time
Your investment strategy should adapt to the different seasons of your life, from aggressive growth in your twenties to capital preservation approaching retirement.

Current season of your life - the phase you are in right now
Your current season of your life - raising young children and paying a mortgage - may limit how much you can invest each month.

Business Example: The financial advisor reminded her client that career ambitions, family commitments, and retirement planning all belong to different seasons of life, and that no single strategy fits every phase.

Interactive Quiz

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Disclaimer:

This newsletter is for informational and educational purposes only and should not be construed as financial advice. The information contained herein is generic and does not take into account your individual financial circumstances. You should always consult with a qualified financial professional before making any investment or financial decisions.

Additionally, the authors and/or publishers of this newsletter may hold investments in securities or other financial instruments mentioned herein. These are included for illustrative purposes only and should not be taken as a recommendation to buy or sell such securities or financial instruments.