Sun. Jul 12th, 2020

How to Start Investing My First Savings (Part 1)

Yes, investing your money is essential, and I advise you 100%.

In this article, I am going to tell you why I consider it essential, and I am also going to talk to you about how to start investing your first savings.

If you have been saving for a while, but you have not started investing yet, this article will also help you, as it will help you get started.

Is it really necessary to invest your savings?

Without a doubt, investing in money is very, very necessary.

First of all, because if you have the money stopped, either under your mattress or in a checking account, every day that passes, you are losing money.

Inflation causes the price of things to rise, and every 25 years or so, it doubles.
Imagine, for example, that you are saving for your retirement, and that you are now 40 years old.

With effort, you save € 3,000 this year, and for fear of losing them, you decide to put them in your checking account simply.

At 65, you retire, and those € 3,000 are still the same amount, but they only allow you to buy half of the things.

Therefore, by not investing in fear of losing your money, you have lost half of what you had.

On the other hand, not investing also involves a great opportunity cost, since you are not profiting the money that has cost you so much to save.

Imagine, for example, that you are 40 years old and start saving 300 euros a month for your retirement.
If you do nothing with that savings, and simply put it in an account, at 65, you will have 90,000 euros.

If you decide to invest that money, and you get a 7% annual average return, which is the historical average of the stock market, you will have almost triple, € 243,000.

Time is your ally. Start investing your money as soon as possible.

Before I told you that if you start investing € 300 a month at age 40 when you retire, you will have about € 240,000.

But time is really your ally when you invest, because the sooner you start, the more you take advantage of compound interest.

If you started at 30 by investing the same monthly amount, when you retired, you would have € 532,000, much more money.

Therefore, the best time to start investing your money is now.

Before you must read and be clear about what you want to do, because starting crazy does not make sense, but it also makes no sense to wait for years to have saved since you will be spending a lot of profitability.

To see the importance of time, imagine that instead of starting at age 30 to save those € 300 and invest them you start at 29, just one year before.

It seems that it does not matter to start a year earlier because really of your money, you will only be putting € 3,600 extra.

But, upon retirement, that year of difference would involve more than € 40,000 in your account.

If you start at 30, you will have € 532,000 at 65, while if you start at 29, you will have € 573,000.

That is compound interest, and that is the importance of starting to invest your money as soon as possible.

How to start investing your first savings?

Option 1. Delegate to a manager

If you want to start investing your money, you have two options, do it on your own or representative to a manager.

In my opinion, the most straightforward and most suitable for almost anyone is to delegate.

Of course, not in anyone.

My favorite option, without a doubt, is robot advisors.

An advisor theft is an automated manager that creates and manages an investment portfolio entirely automatically and with meager commissions.

Without needing knowledge, and without having to spend a minute, you will invest like a professional with a very diverse portfolio of investment funds.

If you want, here is a comparison of the leading robot advisors.

Option 2. Invest on your own

If you prefer to manage your money yourself, my first advice is not to start crazy.

The first thing you should do is a train. Read, learn, and even do some courses if you prefer.

The important thing is that you know what you do before you start investing your first savings because if you start without having a strategy, you will most likely end up losing money.

I started to like this, investing on my own.

But little by little, I realized that it took me too long and could not exceed the benchmark.

Therefore, I began to opt for indexed investment funds, which use the leading robot advisors that I have mentioned before.

In my opinion, it is much simpler, and the results can be even better.

You already know, starting to invest your savings is essential, and if you don’t do it, you are losing money day by day, both because of inflation and because of the profitability that you are stopping.