You've been toying with the idea of investing your money for a while now? Why it is so important to start early and why it is better to do little wrong early than to do a lot of things right later.

1. The worst thing you can do is nothing at all

Investing money, saving, providing for the future, investing - almost everyone has already dealt with these topics at some time or another, regardless of the intensity. But why is it so often just a matter of keeping busy and why do so many people postpone this important topic until "later"?

2. Your money loses value daily

First of all, there are enormous differences in the quality of financial products and choosing the right products is a complex issue. Nevertheless, with a globally diversified portfolio of stocks and bonds, you are always better off than if you do nothing at all. The reason for this is inflation.

3. Risks can be controlled very well

The money that you have on your accounts today without interest loses value from day to day. Although 100 € will still be 100 € in a year, you will probably be able to buy less goods for this 100 € in a year than today. This is also called purchasing power. By the way, this so-called inflation is measured using a shopping basket of everyday consumer goods. The inflation in Germany is in the long-term average of about 2%. What does this mean in concrete terms? If you have €10,000 in your current account today, in 10 years this will only correspond to a purchasing power of about €8,200. A loss of 1,800 €.

4. Very lucrative on average

Now you may think: 1.800 € loss is still better than losing the whole 10.000 €. And our experience also shows that fear of losses is one of the most common concerns of investors when it comes to investing. But how big is the risk of losses really? It is a fact that investments are associated with risks. But that is not bad at all, because you are well remunerated for taking these risks. You can reduce the risk extremely by splitting your investment sum over different securities (diversification) and keeping the securities for a longer period of time. Historically, there has never been a 10-year period in which a broadly diversified portfolio of stocks and bonds has yielded a negative return. Therefore, while it is not impossible to lose money over a 10-year period with a broadly diversified portfolio, it is extremely unlikely.

5. Easy and transparent

But what return can I realistically expect if I do not leave my money on the account but invest it? Historically, equity investments have generated between 7-9% return per year, depending on the period and market. After 10 years, the 10,000 euros have thus grown to an average of 21,700 euros. What can you expect after 10 years if you save an additional 100 € per month? In this case you can expect an average of almost 40,000 € after 10 years. As you can see, capital market investments are very lucrative in the long term.‌

6. Starting small works well

For many people, investing sounds complicated and is a topic that only professionals should deal with. The reality looks different: Investing money independently is extremely easy and professional asset managers perform worse than the market on average. Through cheap and transparent financial products (so-called ETFs) you can easily and cheaply participate in global market growth.

7. Conclusion

Many people believe that investing is only worthwhile if you have already saved some money. The fact is: even with small amounts, considerable results can be achieved. For example, if you save only 25 € 40 years per month from your first day of work until retirement, your assets will grow to an average of 81,000 € by the time you retire.Investing money is extremely important and anyone who can put even a little money aside each month should do so. Nowadays, investing money is extremely easy and transparent and you can achieve great results from only 25 € per month.

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