Do you finally want to start investing in 2025? Or are you already investing but still feel uncertain, just want to check whether you're doing the whole thing right or simply want to adjust your investment strategy? Then we'll tell you how to best approach investing — step by step.

What does investment or investing mean?

To put it bluntly, investing means using your money in such a way that it increases over time — i.e. it works for you. Instead of simply leaving your money in the account, where it loses value due to inflation, you invest it in various forms of investment. The aim is to build up long-term wealth through increased value and returns. (Of course, you can also be looking for short-term gains. But then you're taking more risks.)

Before you start: steps before investing

Before you start investing, you should create a solid financial basis. There are a few important steps to do this:

1. Define your goals: Before you simply save or invest your money, it helps to define specific goals that motivate you and make it easier for you to calculate the amount of money you'll need up to a certain point in time.
2. Reduce debt: Consumer debt, such as credit card debt or Klarna debt, should be repaid first, as these mean high interest rates, can quickly lead to a debt trap or eat up your return.
3. Create a financial overview: Get an overview of your income and expenses. This way you know exactly how much money you have available each month.
4. Know surplus: Find out how much money you have left over each month after deducting all costs. You can then invest this surplus, for example.
5. Using budgets: If your surplus isn't enough, you can use budgets to save or better control your spending. However, your budgets should be realistic, i.e. fit your individual life situation — even though rules of thumb can provide you with guidance.
6. Save nest egg: Before you invest, build up a financial cushion of ideally three to six months' expenses or monthly salaries. This nest egg gives you security against unforeseen expenses. So you don't have to use your savings or the money you have invested. In turn, this can have an impact on your return, i.e. your profit.

How can I invest money?

There are lots of ways to invest your money. It is important that you understand which options are available and which fit your financial goals. Depending on what you choose, the process is different.

What can I invest in?

You can invest your money in various asset classes, for example in securities such as stocks or investment funds, in real estate, in cryptocurrencies, in gold or other precious metals, as well as alternative assets such as art, wine or collectibles. Of course, you can also save in the classic way, on your current account, overnight money or fixed-term deposit account. These types of investments differ in their profit prospects, but also in terms of the associated risk.

‍Stocks explained: Shares are shares in a company. When you buy shares, you become a co-owner of the company and benefit from its profits.‍

ETFs explained: ETFs (Exchange Traded Funds) are funds that represent an index such as MSCI World — i.e. a list of different stocks, bonds, etc. They are an easy way to invest in a broadly diversified way.‍

Active funds explained: Active funds are managed by fund managers who try to outperform the market through targeted selection of securities.‍

Bonds explained: Bonds are bonds issued by governments or companies. In other words, you lend money to the publishers, for which you receive interest and your money back at the end of the term. ‍

Crypto explained: Cryptocurrencies are digital currencies that are based on blockchain technology. They are highly volatile, but they also offer high return opportunities.

How to define your investment strategy

What you invest in ultimately depends on your investment strategy. This includes your investment goal with regard to your financial goals, such as retirement planning, wealth creation or financial freedom, your investment horizon and risk appetite. But your values and personal preferences also play a role. Perhaps you want to invest sustainably, such as investing your money in companies that meet ESG criteria.

Your experience, financial knowledge and associated financial self-confidence also influence your investment strategy and investment selection. As well as your financial resources.

At the end, you determine your portfolio composition.

But before you think everything through too much — start small, with an investment and a small amount of money to get a feel for it. The urge for perfectionism prevents many from even getting into financial action.

Diversification is important

After starting out small, consider over time: When you invest, don't forget to diversify. Diversify your risk by investing in various types of investments. If one investment bad performs, the others will make up for your loss.

How much money to invest?

How much money you can or want to invest depends on your financial situation and goals. If you do some research on this, you will quickly stumble upon the rule of thumb of investing 10-20% of your income per month. This can be a good guide, but it shouldn't put pressure on you. Every financial situation is individual. Define the amount according to your financial overview and goals.

But it is important: It is best to only invest the money that you can spare in the long term. Because if you depend on quick access to the money, it can have an impact on your performance and profit.

What should you consider when investing in general?

• Know the risks: If you invest, do enough research in advance. That doesn't mean you need a doctorate. However, you should know important basics and terms (browse, for example, in our Financial lexicon).
• Think long term: If you invest for the long term, you can rely on the long-term positive overall market trend, even if there are crises and slumps in the meantime.
• market psychology: Don't be unsettled by short-term fluctuations or driven by other people and their panic. We humans are herd animals and often follow the behavior of others thoughtlessly. Always think before you act.
• Customizing is ok: As a result of different developments in your investments, the weighting of your portfolio may change. You then unintentionally take on more risks or miss out on opportunities for higher returns. So review your portfolio from time to time (e.g. quarterly or at least annually) and make adjustments as needed.

Specifically: If you want to invest in securities

To invest in securities, you need a securities account. First, select a suitable deposit provider and open a portfolio. The process and duration of account opening varies depending on the provider. After successfully opening a portfolio, you can place your first order, i.e. make your first investment — either as an individual investment or as part of a savings plan. Individual investments are suitable for targeted investments in certain stocks or ETFs, for example, while savings plans allow you to regularly invest smaller amounts and thus benefit from the cost-average effect (average cost effect). This means that you buy certain securities more expensive sometimes cheaper, as prices fluctuate. In the end, you end up with the average price instead of worrying about catching the wrong time.

Market outlook 2025

2025 promises to be an exciting year — with a new US president threatening tariffs and making ESG (Environmental, Social, and Governance) less important, or elections in Germany. Policy changes can influence markets. But trends and new technologies are also having corresponding effects. Artificial intelligence (AI) was one of the top topics in 2024, but promises further changes in the economy in the new year and faces challenges such as ethical guidelines.

While the stock markets are influenced by various developments, there could be volatile times ahead of us, but there could also be profit opportunities. Bonds and gold may offer stability, while crypto remains a grab bag — following the recent upsurge at the end of 2024.

How exactly the economy and investments will develop remains a glimpse into the crystal ball. Of course, you can find many articles online about investment strategies in 2025 or stock analyses. Always pay attention to reputable sources.

With our financial app, which launches at the beginning of the year, you can also acquire further financial knowledge and basics and keep an eye on financial news and markets. So sign up now for the waiting list and get a 50% discount for the launch.

If you want to learn more about investing, you can also sign up for our free webinar on January 22, 2025 at 18:00. Click here for signup.

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