Where to invest?
Where to invest? – this topic was and is of particular relevance both on the Internet and in the offline world. While in the past, going to a local bank or savings bank branch was sufficient to secure a decent interest rate, consumers now seem to need a real expert status.
A “money invest comparison” no longer only considers the fixed interest rates for savings books and call money or time deposits, but also includes investment products such as shares, real estate and crowdinvesting as well as crypto currencies, precious metals and much more.
But what is worthwhile when and for whom? And how to deal with the significantly increased risks. In a good “money invest comparison” these questions are answered exhaustively and meaningful.
Why invest money in the first place?
Before any effort is made to “where to invest “, the question arises whether it is necessary to invest money at all.
The sentence sounds a little provokativ nevertheless in fact the purchase of material assets or the renovation of the own four walls can be a more meaningful measure than money on a savings book or into a share fund to lead.
The current low interest phase loads almost to consumption in and who needs a craftsman or a new car or a washing machine to buy must, should possibly act now. The reason lies in the anyway not very investor-friendly situation and the favorable conditions for a financing. Most consumer goods can be financed at zero interest rates and paid off in convenient monthly installments.
In order to experience this, the opening of an advertising folder or the view of one of the relevant Internet sides of large retail trade enterprises is sufficient. Mind you, consumer goods are only the right choice if there is sufficient private pension provision anyway. You just have to have the money left, but then there are a number of incentives to buy.
A good way to make the necessary investments and avoid a “money-making comparison” is to modernise your own four walls. Why not rely on a new and more efficient heating system? Or put solar cells on the roof?
An environmentally friendly conversion is not only the right signal from an environmental point of view, but also helps to save money in the future. In addition, a whole series of measures are subsidised with subsidies and are therefore cheaper.
How to read a "where to invest money" comparison?
The first step is to determine your own investment opportunities and willingness.
In a nutshell, this could be formulated with the question: “How much money do I have left at all? It is advisable to take a close look, because even in times of low interest rates, incurring debts is not a good way to invest money. If you borrow money to invest it, you are taking too high a risk, which is why securing your own existence and your expenses for everyday life always come first.
As soon as one knows however, how much money is available once or monthly, can the money invest comparison start and one arrives at the determination of the own risk readiness. Read correctly: a risk is always present today, since the guaranteed interest rates of the individual financial products are simply no longer sufficient to balance the inflation rate.
Where to invest? Time Deposit?
What this means can be experienced by anyone who owns a savings book. The key interest rate of the European Central Bank (ECB) has been at 0.00 percent for several years and there is no increase in sight.
We are talking about the conditions at which the commercial banks can obtain money and which are usually passed on to the end customers. This means that a savings book or time deposit pays interest at a maximum of half a percent or one percent. In contrast to this, the inflation rate and thus the price development usually ranges between 1.5 and two percent.
Anyone who invests for one percent and wants to compensate for price increases of two percent will make a loss.
It could also be formulated in such a way that all fixed-interest investments definitely make a loss and should therefore not be chosen. Affected of it are not only time deposits and daily money or the savings book, but also life insurances and building saving contracts.
With all financial products mentioned it concerns relics from the past, whose Revival did not fail so far. A view of the estimates of financial experts and even those, which earn their money with time deposits investments, i.e. the banks, confirms the destructive judgement.
urz said: guaranteed interest no longer exists and so one inevitably moves with an investment and every “invest money comparison” in a risk class
Equities and equity funds in comparison
Is he coming or isn’t he? And when is he coming? In this case we are talking about the big stock market crash that has been expected for several years.
So far, the rapid fall in share prices has failed to materialize and share prices know only one direction: upwards. In the case of shares, you acquire shares in a company and participate in its success. The share price, on the other hand, has a lot to do with the stock exchange traders’ expectations for the future of the company. For amateurs, this results in a kind of “black box” and a system that is difficult to understand.
For this reason, one should only invest directly in shares if one has acquired sufficient specialist knowledge. If you are not an expert for a certain industry or even a broker, you should exclude shares from the “invest money comparison” in order not to take too high a risk. Equity funds already promise better diversification.
Equity funds are – to put it figuratively – a basket consisting of the shares of different companies. The compositions vary and can replicate a stock index such as the Dax or invest in certain regional markets or industries.
Past experience has shown that equity funds have usually been a good way of investing money and have yielded solid profits. Whether this will also be the case in the future seems questionable.
Whoever wants to save administrative costs in this area chooses the so-called ETF. The abbreviation stands for Exchange Traded Funds and thus funds that are traded directly and without a stopover at a bank.
With ETF you can invest in complete markets and the liquidity is maximum. They can be bought and sold at any time or held for retirement provision.
Should i invest in real estate?
And real estate? Don’t you read everywhere about the advantages offered by “concrete gold”? In fact, real estate prices have risen enormously in recent years, especially in the major cities, and there is no end in sight to the price increases.
However, it should also be pointed out that critical voices are now minging in the concert of real estate advocates and warning of a speculative bubble. The potential may still exist in small and medium-sized cities, but especially in cities like Hamburg, Berlin or Munich the “rally” may have come to an end.
Real estate occupies a special position in the “invest money comparison” because it is one of the products that benefit from low interest rates. In most cases the financing takes place over a loan and such is offered nowadays extremely favorably. However, you have to be able to manage a property adequately and take care of it.
Here the sentence from article 14 GG comes to the carrying, which states that “property obligates”. Anyone who has ever been to an owners’ meeting will quickly realise that it is not always easy to fulfil these obligations. There it concerns around renovations, beautification measures or also the development of attics or also noisy tenants, garbage places and heating systems. The individual owners do not always agree and not everyone has sufficient money to buy directly a whole house.
In addition come the tenants, with whom also a good contact must be found and which must pay naturally regularly their rent. Who sets on real estates, can look forward if necessary to solid net yields, in addition, has to do all hands fully. There are no financial investments or retirement provisions that you can simply leave lying around and that work by themselves.
Risks are naturally also present with real estates. There is on the one hand a possible deterioration of the situation by structural measures in the environment or the departure of companies, the planning of flight routes etc.. But there is also the constant risk of major repairs to the house or problems with the tenants.
Of course, solutions can also be found here, but the challenges must first be accepted and mastered.
Digital investments and crowdinvesting
Digital investments or crowdfunding and crowdinvesting offer a very up-to-date form of investment. In a “invest money comparison”, these forms of investment end up in one of the top places because simple and transparent handling meets solid returns. Furthermore, there is the possibility of a perfect risk diversification, since even smaller amounts can be worked with.
Crowdfunding or crowdfinancing already bear their functionality in the name. The “crowd” is the English word for the crowd and so it comes that numerous people finance a larger project with partial amounts. These projects are presented via digital platforms designed specifically for this purpose and there is almost always the opportunity to ask questions or find out more details.
The transparency is therefore maximum and no questions remain unanswered at the end of the day and before the investment. The great thing about it is that it can be a real dialogue between the investors and the entrepreneurs, who usually do not come from the financial sector, but “just” have a good idea.
Critical enquiries improve the business model and have already provided some food for thought. This is reflected in the fact that one selects projects which suit one and which one perceives as promising or serving the general public.
Digital maritime Investments
Digital maritime investments also play a good role in a “invest money comparison”. Here, too, we are talking about crowdfinancing, which in this specific case flows into ships. Experience has shown that investments in shipping have been promising for centuries.
Statistics show that around 90 percent of global trade is carried out via the oceans. Trade volumes are rising continuously and new ships are needed all the time as world trade flourishes. Much more decisive for a maritime investment, however, is the enormous need for modernisation.
In order to understand this, it is worth taking a brief look at legislation in the maritime sector. Shipping companies are increasingly confronted with regulations regarding the environmental friendliness of their ships and for this reason have to launch new ships or bring the old ships up to speed.
In order to achieve this, projects are placed in the crowd investing sector and enable fixed annual returns of six to seven percent. As this is an entrepreneurial investment in the form of a loan, losses are also possible, but there is always a high level of equity capital in the shipping company and the value of the ship cannot be neglected.
Gold and crypto currencies
At first glance it may seem somewhat unusual that gold and the so-called crypto currencies are dealt with in one chapter. In a “money investing comparison” both forms should not be missing because they are called everywhere.
Gold has existed since the dawn of mankind as a means of payment and a valuable object, but has the enormous disadvantage that it does not yield any return. One buys gold and can sell it again if the price promises corresponding profits. More is not possible, because it concerns “dead capital”.
Moreover, gold’s value is assigned only by the company and the past history. The actual technical demand for the precious metal is much lower than the quantity of gold in circulation, so that a fall in price is also possible.
Crypto currencies have made fantastic profits possible in the last few years, but at the same time they have also caused an undreamt-of slump. One inevitably feels reminded here of Roulette, because the risks in addition, profit possibilities are enormous in each case.
A big disadvantage is that the mechanisms behind a crypto currency can hardly be seen through and hacker attacks happen again and again. Furthermore, there is no higher authority to turn to in the event of a possible fraud. So you can be lucky or not.
So, what to do?
A “where to invest comparison” usually raises more questions than it answers.
Basically, higher risks are associated with higher profit prospects. Anyone who is willing or has enough money left can dare to do so. However, a diversification of the invested capital must always be taken into account.