Tip 1: Pay off debts first, then invest money
There are few high interest investments that allow a higher return than you pay interest on an existing loan . That is why it is usually worthwhile to first pay off existing debts and then invest your money. By the way: the overdraft facility is also a loan. Here, an average of almost 10% interest is due.
Tip 2: Your risk increases with the size of the return
Many investors want to achieve the highest possible profit. This is possible, for example, with stocks or funds. However, this also increases the risk. Because these securities can also crash and lose their value. Or to put it another way: with an investment with low profits, your risk decreases.
The following overview summarizes the forms of investment described above under the aspect of security.
Which form of investment is a safe investment?
| Safe investment | Less secure investment |
| Savings book | shares |
| Time deposit and overnight deposit account | Funds |
| Child accounts | Foreign currency account |
| ETFs | Derivatives |
| Real estate and equity crowdfunding | Certificates |
| Bonds and Pfandbriefe | Real assets such as art, antiques, musical instruments |
| Cooperative shares | Invest in FinTechs |
| gold | Bitcoins |
Tip 3: A broad diversification of your investments protects against losses
For example, if you invest money in stocks and make losses in the process, you can offset this loss with gains from other investments. If you are one of those investors who want to take a medium risk, then dividing your investment into thirds is a good option. So around a third each in equity funds, fixed-term deposits and overnight money.
Tip 4: patience often pays off
There are frequent fluctuations, for example on the stock markets. If you wait and see, possible losses can be made up over the years.
Tip 5: don’t invest more than 10% of your income
With a gross income of € 4,000, that’s € 400. If the amount of money invested is too high, you will lack money for everyday life. There is a risk that you will no longer be able to meet your regular expenses.
Tip 6: think of a hidden reserve
There can be unforeseen expenses at any time. That is why experts recommend a reserve of around 3-6 months’ salary that you can reach at any time.
Tip 7: Pay attention to the additional costs of your investment
For some types of investment such as equity funds, administration costs are due. These can eat up part of your profit. But even low costs, such as account management fees , can reduce the profit on your investment. It is best to always keep an eye on these additional costs.
Tip 8: Those who invest early can make more profit
The subject of investments is often not yet important for young people. The motto is: First complete an apprenticeship or degree, then get started in your job and start a family. That’s why many don’t start investing their money until their late 30s or mid-40s. But then a few years have already been given away in which money invested can yield interest. Those who have the opportunity to invest at a young age are ahead of the curve, especially when it comes to long-term investments.
Tip 9: Take into account your specific life situation
Do you want children? Are you planning to build a house? Do you have a fixed-term employment contract? Depending on the situation you are in, other forms of investment are useful. If you are not sure how much your income will be in six months, it is risky to choose long-term investments.
Tip 10: A robo-advisor can be useful
How do I best invest my money? Finding the right investment strategy is difficult, especially for young and inexperienced investors. So-called robo-advisors , ie internet-based system robots, can help you. You do not determine your investment strategy personally; instead, based on specific questions, you are advised to invest in a robo-advisor such as easyfolio, whitebox or cashboard. However, as an investor, you have to pay fees.
