We are often confronted with the topic of investing and investing money, through advertising from banks, contributions on social media, our private environment, where one or the other is already investing money, or through the media, which report on increasing poverty in old age. And yes, our pension will probably not be enough and just saving no longer seems to be the only way to make provisions for retirement or to achieve our financial goals and wishes. Investing seems attractive there.

That's why we want to start investing money, but we usually don't even know how. We simply lack knowledge. Many feel the same way. And when we finally overcome and inform ourselves, we quickly find ourselves overwhelmed by the overload of information. With all the information and options, what is actually relevant now and what suits me? The resulting uncertainties lead to fear of making the wrong decisions and ultimately to procrastination and inaction. Investing doesn't have to be that complicated. But for now, take a step back:

What does investing actually mean?

When we think of investing, stocks usually come to mind first. However, you can invest your money in various asset classes, such as stocks, bonds or real estate. Investing simply means using your money to earn more. In other words, when investing, you want to invest your money profitably. Since investing involves higher return opportunities, i.e. profit opportunities, it also involves more risks than saving.

Why invest

Investing therefore involves risks that you should be aware of before you trade. But investing also offers advantages, of course: both economically and in terms of the impact you can generate with it. From an economic point of view, investing is that you get more return (profit) than when you save and can therefore build up your wealth more easily and make provision for retirement while you spend your money before inflation protects, and that when you invest in the long term, from the so-called Compound interest effect be able to benefit. In addition, by investing, you can also represent your values, for example by investing money in particularly sustainable or social companies, and thus supporting them in their mission, while at the same time participating in their success.

But how do you go about starting investing now?

1. Acquire basic knowledge

Didn't we just talk about an overload of information? Yes, we have. But that doesn't mean that you should act uninformed. Investing involves first acquiring a basic understanding. You don't have to become a financial expert, but you should know the most important terms and concepts such as stocks, bonds, ETFs, dividends and diversification in order to make informed decisions that are right for you.

2. Clarify your goals and willingness to take risks

Before you invest your money, it's important to define your financial goals. Do you want to make provisions for retirement, finance your own home or save up for your children's education? Depending on what your goals are, the strategy and product selection may also differ.

Another important point is your willingness to take risks. There are investments that promise higher returns but also involve more risks. Others are safer but offer less yield. Find out how much risk you're willing to take and choose your investments accordingly. Your investment goal and associated investment horizon, i.e. the length of time you want to invest your money, also play a role here.

3. Create a solid base

Once you have informed yourself, defined your goals and risk appetite, the question quickly becomes how much money you can or want to invest. We often shy away because we don't think we have enough money to invest. But even small amounts can have big effects over a longer period of time. An important requirement for determining the amount of money is to create a financial overview. If you know your income and expenses, you can calculate your surplus, i.e. the amount of money that you can set aside monthly. Before you start investing, it is advisable to build up a financial buffer, for example for emergencies such as car repair. Because you should only invest money that you don't need in the short term.

4. Decide what you want to invest in

If you know what your financial options are, this also has an influence — in addition to your goals and risk tolerance — on the choice of financial product in which you want to invest money. This is where the worry of making the wrong decision can quickly overwhelm us. But remember: Investing is not a sprint, but a marathon. Take one small step at a time.

5. When choosing securities: Open a custody account and start with small amounts

If you decide to invest in securities, i.e. stocks, bonds, ETFs or active funds, you need a custody account. You can open this at your house bank or with another bank or broker. There may be different costs for each provider, both with regard to basic fees such as the deposit management fee and when buying and selling securities.

Once you've opened your depot, you're ready to go. Remember: You don't have to start investing right away with large sums of money. You can definitely start with small amounts and increase them later. It's okay to gain experience first.

And while investing? Diversify, think long term, and control your emotions.

Spread your risk by dividing your money across asset classes, industries, and regions. This diversification helps to minimize risk, as losses in one area can be offset by gains in another.

Investing doesn't mean speculating. When you invest, you usually want to invest your money over the long term. In turn, this means that investing requires patience. You'll get the best results if you think long-term and don't let short-term market fluctuations upset you. It is quite normal for stock market prices to fluctuate. It's important that you stick to your strategy and don't panic when prices go down.

In this way, you also avoid emotional reactions. Acting emotionally is one of the biggest mistakes when investing. Don't be led by fear or greed, but stay rational and think carefully about the steps you're taking.

conclusion

Getting started with investing may seem complex at first, but with a clear strategy, a good understanding of the basics and a long-term view, you can invest your money wisely and sustainably. It is important that you start — even small steps lead to the goal. Start researching, clarifying your goals, and start with a small contribution. You'll see that investing for beginners isn't magic, but a worthwhile part of your financial plan.

Do you need more support or background knowledge — appropriate for your current situation?

With our financial app, we help you build up knowledge, step by step, based on your current situation and goals, including how to start investing. In addition, you can use our app to create your financial overview, thus determining your savings amount so that you can tackle your finances at your own pace.