Investing with small amounts instead of saving
If you want to invest, it is really not necessary to immediately invest thousands of euros. You can also invest with small amounts. There are several options for growing your money through investments.
👉 Many people switch to shares or bonds because nowadays hardly any interest is paid on savings. Many banks have already stopped paying interest, other banks pay only a fraction.
If you have a few thousand euros in a savings account, you will receive less than one euro in interest on an annual basis.
Start investing: read up
If you want to start investing, it is very important not to buy shares or bonds randomly. The chance that you will suffer a loss is enormous. It is important to first familiarize yourself with it.
✅ Read information on the internet or buy a good beginner investing book before investing your money. What you should always take into account is that you can lose your investment, or at least incur a loss.
Usually it is not the case that shares are suddenly worth nothing at all, but it can always happen that the investment you enter becomes worth less.
As a novice investor, it is wise to create a demo account with a broker. With a demo account you can learn the tricks of online investing with fake money. At eToro you can use fake money to see if investing is something for you. If it turns out that there is a talent hidden in you, you can of course always invest with real money.
Only invest in investments with money that you can afford to lose for a long time
Even if you decide to invest with small amounts, you still have to take into account that you cannot always make money quickly with investments. Sometimes you need to have a longer breath.
If you have bought shares or bonds, it may happen that the price initially falls. After that, the price will hopefully rise again so that you can eventually sell your investment at a profit.
✨ A popular statement among experienced investors is “if you get shaved, you have to sit still”. This means that you should not panic and sell your shares when prices fall, but wait and see if they possibly rise again.
It is of course the case that you must continue to closely monitor the course of affairs around a company. By reading the financial pages in the newspaper you can get a good idea of how a company is doing. If bankruptcy threatens, the chance is of course very small that the share price will rise and it is better to sell as soon as possible to avoid greater loss.
What can I invest in with small amounts?
If you just want to invest with a relatively small amount, you can consider investing in one company. This could be a company you sympathize with or have confidence in. If you own shares in a company and you decide not to sell them, dividends are often paid at the end of the year.
‼ ️ You will then receive a (small) part of the profit. And you are welcome at the shareholders’ meeting and can participate in the decision-making process of the company.
With a small number of shares, your influence is of course limited, but some investors like to be able to follow a company closely as a shareholder. After all, you also get access to the annual accounts, which is interesting to study if you know a little about them.
CFD stands for Certificate for Difference. This special way of investing is ideally suited for people who want to invest in small amounts. You buy a CFD for the amount you want to bet yourself, so you can determine the amount yourself. A CFD is based on a price change. You have to predict this correctly to make a profit. The funny thing is that with a CFD you can also make money when the price falls.
If you have predicted this correctly, payment will be made. You can buy CFDs for various investments. You buy a CFD for foreign currency, with a prediction about the exchange rate against another currency.
➡️ One broker where you can trade CFDs is eToro CFD.
👉 For example, Euro against Dollar, or Dollar against British Pound. But you can also buy a CFD with a prediction on the price of a share, for example from Shell or Apple, or on the price of a stock exchange such as the AEX in Amsterdam, or the tech exchange Nasdaq.
Investing with small amounts is ideal for beginners
If you are just starting to invest, it is not wise to immediately use all your savings. If you want to “practice” investing, it is advisable to invest a small amount first. This way you can see how investing works and how the price of a share develops.
‼ ️ Only when you are well versed can you use larger amounts if you want to grow your capital through investments. It is important that you keep a close eye on your shares and other investments so that you can immediately respond to current developments.
Outsourcing investing with small amounts
If you do not feel like or do not have the time to immerse yourself in investing, you can also decide to have your money invested by an external company. Asset management is usually only done for clients who have a larger amount available that they want to invest through investments. However, there are also offices where you can make monthly deposits, for example.
As you may have used to put an amount in a savings account monthly, you now transfer this amount monthly to the investment office. They invest with your investment in investments and often pay out profit at fixed times.
❌ Keep in mind that you cannot simply withdraw your investment. If you want to stop and get your money back, you sometimes pay a hefty fine for this.
Investing in small amounts can be a good alternative to saving
If you are disappointed that you no longer receive interest on your savings, investing in small amounts is definitely worth considering. If you don’t know enough about it yourself, you can ask for advice from your bank, for example.
👉 They often offer opportunities to invest through their organization, as an alternative to saving. For example, some banks offer the option of investing in certain categories of companies, so that you can make a choice yourself but do not have to “go to the stock exchange” to buy shares.