Eight elementary financial and investment tips

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A well-organised investment plan is helpful in realising important life goals and reliably secures you. It is not difficult to invest money in order to secure maximum financial leeway. You should only follow eight basic rules to optimise your financial investments. This way, you can design your finances to perfectly fit your life planning.

1. define and pursue goals

As an investor, you should define the purpose for which you are saving and determine a time horizon for achieving the goal. For example, young professionals can determine that they need an additional monthly income of 300 euros net as a pensioner. This results in the required capital amount and, depending on the form of investment, a corresponding amount to be saved per year. Very important: Check regularly how far the target has already been reached and adjust the investment strategy if necessary.

Of course, savings goals can also be medium-term projects, such as the purchase of a new car or a dream trip. Their realisation can be planned just as systematically as saving for your own four walls.

2 Obtaining and evaluating relevant information

Admittedly, the flood of information on the financial market in https://exness-vietnam.asia/login/ is overwhelming. But to be well informed, you only need one or two first-class sources of information, for example in the form of a digital or analogue financial magazine. You should use these to keep up to date with the latest developments on the capital markets and the quotations of your shares, funds and similar investments.

3. simplicity is the trump card

Never make investments whose construction you do not fully understand. Only simple and transparent concepts allow you adequate control. For example, you don't have to juggle complicated derivatives to make money on the stock markets.

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4. consider costs

With any investment, the only thing that matters is the net return: This is the result of interest, price gains or another form of gross return minus the costs incurred. With some actively managed funds, but also with ETFs, the fund companies charge comparatively high fees.

5. assess risks correctly

In 2019, the Federal Financial Supervisory Authority (BaFin) published the results of a study on the financial literacy of adults in Germany. More than three quarters of those surveyed stated that they generally avoid risks when investing money. However, this attitude prevents long-term investment success because it fails to recognise the trade-off between security and return. This basic rule of financial investment states that investments with higher risks also imply higher opportunities and vice versa.

According to a recent survey conducted by Statista on the topic of financial investment, European consumers still overwhelmingly prefer conventional forms of investment: Thus, 45 percent of those surveyed stated that they have savings books and savings deposits. Another 40 percent save on their current account, only 22 percent of the participants in the study use investment funds, and only 15 percent rely on shares. In view of the fact that the interest on savings is currently barely sufficient to compensate for the devaluation of money through inflation, this is a sobering picture. So: More courage to take risks is called for; for example, passive funds are a possibility for share beginners.

Conclusion: 

    Consumers should be goal-oriented and systematic when investing.
    More willingness to take risks can pay off in the form of higher returns. In addition to ecological and social aspects, sustainable investments also focus on avoiding risks.
    Continuous monitoring of investments protects against unpleasant surprises.