How to start investing

If you feel like you are not saving any money, try starting with a suitable sum, for example 20–30 euros, every month and increase the sum when you feel the time is right. You should not be overambitious when saving or investing. If you start saving with a very large regular sum, it may put such a strain on your daily finances that saving will feel like too much of a burden. Here, as in other areas of life, you should remember to act with moderation and enjoy life.

Get going early

There is no reason to wait for the next salary raise – you should start saving now so that you will not regret postponing your saving decision a few years later. The earlier you start, the smaller regular sums you have to save in order to reach your arget. Over a number of years, your savings will add up slowly and accrue compound interest. 

As the developments of investment markets cannot be foreseen, there is no use in postponing your investments until the cheapest moment for buying shares, for example. The most important thing is to start early because investments will accrue compound interest and compound returns. For instance, the capital you invest will double in about seven years if the return level of your investment is ten per cent.

Saving in a bank account is the easiest way to start

Start saving in a bank account and you will notice how nice it is to have money saved for a rainy day. Once you become used to saving, you can plan new and more profitable ways of saving. Investment funds are very suitable for regular savers. A fund investor can set a certain sum to be transferred automatically – for instance, every month – from his or her account to a fund.

Investing will usually make you more knowledgeable and interested in financial affairs, and subsequently more interested in managing your personal finances. In time, saving can even become a hobby.

Make a long-term plan

It is easier for you to stick to your saving plan if it has a clear goal. Think about what you are aiming to achieve and set goals for yourself.

It is important to 

  • decide on the saving period 
  • recognise your risk tolerance 
  • diversify your investments.

You should consider the saving period because different types of investments are suitable for periods of various lengths. Your risk tolerance affects the types of investments you choose. Diversification, which means the distribution of investments over different types of assets, can affect the risk involved in your entire investment portfolio.

Even with an amount such as 10,000 euros, it is recommended that you divide it over several investments to spread the risk. Investment funds, for example, are good diversification tools. Large sums should not be invested in one go, as the investment risk should also be spread over time.