Ask any 20-something what investments they have and the answer is likely to be a stony silence – wages are low, the cost of living is high and many young people are being scared off the idea of investment by the mainstream media. The chances are that they don’t think they can afford to invest and that it’s something for rich people, but the truth is much more complex.

The nature of long-term investments means that they will offer the greatest reward when held for the longest possible amount of time, so small investments made as a young person can pay big dividends later in life.

Much of the fear also stems from the prospect of risk – the idea of losing money is all the more frightening if you don’t have much of it in the first place, but volatile markets are actually a good thing for someone in their 20s, with a long investment time frame.

If there’s no hurry to cash in on investments, you can buy stocks for relatively little, and watch them make money for years, even decades. Although the stock market will naturally crash periodically, if you’re in it for the long haul, it matters far less – returns will be greater in the long run thanks to dividend reinvestment and compounding returns.

For many young people earning less money than their parents might have done, saving to buy a home or just struggling to keep their head above water, adding another outgoing might seem foolish, but investing doesn’t need to be expensive. Even investing small sums regularly can provide excellent returns in the long run.

Framing it as a future payout, even an investment of £100 each month earning 8% per annum could become a tidy lump sum of £18,000 in ten years, earning £6,000, significantly more than you would make on a high-street bank account.

Of course, capital is always at risk when making investments, but if you’re a young person who wants to make your money work hard for you, it might be a risk that’s worth taking.


Horse racing is a huge, multi-billion pound industry in the UK. Investing in racehorses (‘bloodstock’) is something that even smaller investors might want to consider.


Getting started in bloodstock investment

There are a number of enterprise investment schemes (EIS) that are one of the main routes into investment in bloodstock, allowing investors to invest in a portfolio of bloodstock assets, managed by a team of industry experts. Use one of the many UK bloodstock agencies to source suitable investment opportunities for you.

Bloodstock investment is extremely volatile. Your horse could enter the starting stalls valued at £500,000, but it could finish the race worth £1 million or even £25,000, depending on the result. So, is there a lower risk way of investing in the ‘Sport of Kings’?


Investing in breeding stock

A less volatile investment would be to put money into thoroughbred breeding stock.

Horses that race on the flat are often left ‘entire’, meaning that they can be used for breeding purposes when their racing career ends. Stallions with a good racing pedigree can be worth hundreds of thousands of pounds as breeding stock, as can their offspring. Each time the stallion ‘serves’ a mare, the mare’s owner is charged a fee, and the very top breeding sires can command covering fees of several hundred thousand pounds.

Broodmares are female horses who have already finished their racing career and are now exclusively used for breeding. A good quality broodmare that is put to a top racing stallion can produce foals worth hundreds of thousands of pounds, which are then sold as yearlings. This can be a good way of bringing a solid return on your investment with a lower risk.


Tax implications

Because there are plenty of racehorses that are sold at a loss, rather than a profit, HMRC regard the balance of probability as a net loss and consequently, racehorse ownership is outside the scope of tax.


In conclusion

If you fancy investing in something a little different, you might want to consider putting some money into bloodstock. Be sure to use one of the specialist UK bloodstock agencies for information on investing and remember that the value of your investment can go down as well as up, depending on its performance.