Where do you want your money invested in?
The economic crisis generally caused great uncertainty. Many investors are therefore wondering how they can invest their own money profitably and securely. Also the following question arises: Should one rather save money or invest?
Even in 2018, the development of interest rates is not really promising. High interest rates are therefore unlikely for conservative forms of saving. Inflation, on the other hand, causes money to depreciate. Money that is saved on the current account is therefore becoming less and less. Therefore, the topic of finances should not be taken lightly. The following is a brief overview of the situation:
Why invest money?
You should also be aware of the purpose for which you want to invest money. A good and correct money strategy can be developed by being aware of what expenses are to be expected in the future. Motives for investing money are, for example:
- Investing in real estate: Dream of your own house. A house of your own can take up a large part of your budget. Well considered should be here: What location should the apartment or house be in? This not only has a direct effect on costs but also contributes to the value development of the property.
- Retirement provision and security: Having security for yourself and your family should be the cornerstone. If you also want to treat yourself to something in old age and have a little luxury, you should put money aside for this in earlier years.
- Education of the children: A good start in life for the children? This also requires money, which should be included in the planning.
- Asset accumulation: The motivation for wealth accumulation can either be to increase the family’s wealth or to create more wealth for future generations.
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Investing money – is it really that easy?
Of course it is possible that you need money for different projects. For example, you want to build your own home in five years or you want to give the children a semester abroad in 20 years.
Financially meaningful planning
First of all, you should plan how much budget is required for the individual projects. It is also important to know exactly when the money is needed. Here it can be useful to record a timeline. This offers a good overview, if one assigns the individual financial means to the respective projects and times directly.
How can you increase your money?
If you have distributed your capital to individual projects, you can consider in which financial products you can invest your money sensibly. The following is a brief overview:
- Current account: The advantage here is that the money is always available. But this is also a disadvantage because the money is not fixed. Also the interest rates are very low and due to the inflation there is even a negative interest rate, so that the money de facto becomes less over the years.
- Savings book: The savings book usually has a fixed interest rate. It is therefore better suited for investing money than a current account.
- Building saving contract: Here you receive a state subsidy (building saving premium). Furthermore, a bauspar contract is characterised by higher interest rates than a savings book. The minimum term of 6 years offers a high level of security.
- Overnight money: Here one has relatively high interest rates and at the same time also higher interest values than with building saving. In case of interest rate fluctuations or if you need money, you can dispose of the money at any time. Nevertheless the overnight money is rather unsuitable for regular payment transactions.
- Time deposit: Time deposits offer a high level of security. With falling interest rates, you have an interest guarantee. This means that the interest rates are linked to the agreed term.
- Shares: With shares, you have the opportunity to make high profits. At the same time, however, the risks here are correspondingly high.
- Funds: High profits are possible here. By spreading the risk, you have a lower risk here than with equities. Nevertheless, the risk is still relatively high.
- Gold, silver and other commodities: Gold, silver and other commodities are tax free. In contrast to paper money, here you have a long-term hedge.
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It is also important not to be guided by emotions when investing. It is therefore advisable to make a comparison so that you can actually choose the best financial solutions. What makes sense for one does not automatically make sense for the other. Rather it depends here also on the individual type, as well as the goal. Do you, for example, want to make high profits and are willing to take a risk in return, or do you want to hedge for the long term?
If you don’t want to save long, but want to make a larger purchase right away, such as a car, a renovation or a property, then the credit calculator can be helpful. Here you can calculate the most favorable conditions and immediately apply for the loan.