I have enough to invest

Investing in the 20s: Three Finance Tips for Young People

The right balance between opportunity and risk

Around the Building wealth at a young age There are myths and supposedly safe tips for stocks or a perfect portfolio. A portfolio consists of different asset classes. Stocks can generate high returns, but they are also volatile. Bonds are considered to be a relatively stable investment, but in the current market environment they achieve low to partially negative returns. So each asset class has different advantages and disadvantages. Hence, it is important to balance between different values ​​in order to find the asset allocation that suits your life.

Many financial advisors recommend portfolios after the Rule of thumb "100 minus age". This means that a 20-year-old should invest 80% of his or her assets in stocks and 20% in bonds. For an 80-year-old, the opposite distribution applies: 80% investing in conservative bonds and only 20% in stocks. There is a real core to this rule. Because long-term investments are considered to be less riskybecause short-term price fluctuations can simply be eaten out. And with the compound interest effect, over time, even small sums of money can grow into a handsome fortune.

Therefore: Let time work for you. But even at a young age you should differentiate between different investment goals and create different portfolios for them - even in your 20s.

Do you have a lot of plans? Then don't put everything on one card!

Those who are just starting their adult life at full throttle often do not have many concrete plans for life. How should one then make targeted provision? Although every life is unique, there are a few investment rules and finance tips that always apply:

1. Take care of your nest egg first!

If you get sick or unemployed, you don't earn anything - but the cost of living continues. Therefore, the main rule of financial literacy is: Build yourself a nest eggwith which you protect yourself against the unexpected. This should cover your average costs for 3 to 6 months. Invest this amount conservatively and so that you can access it at any time. If you don't have enough to create your safety net, you can use it for example. B. save together month after month with an ETF savings plan. At growney you can invest any amount from 1 euro per month - so you have your nest egg together quickly.

2. Invest in your retirement savings as early as possible!

Successful investments often start unspectacularly. Because compound interest takes time to make your money grow. But this is exactly what a long investment period is ideal for. Because even with small starting amounts, a small - or large - fortune develops in the long run. An example: If you had invested 100 euros every month in an ETF savings plan that replicated the MCSI World in 2000, then 15 years later you would have been able to look forward to more than 32,000 euros. The stock exchange would have earned around 14,000 euros for you - and that, although in the time three major stock market crises (the crash of the dotcom bubble in 2000, the global financial crisis in 2008 and the euro crisis in 2009). Those who invest time and keep calm will be rewarded by the stock market with decent profits. Patience pays off! Since your retirement is more than 40 years in the future, your money has plenty of time. Take advantage of this and start as early as possible with a long-term pension, e.g. B. via a passive ETF savings plan.

3. Also think about medium-term goals!

With the safety net you are covered for a short time, the ETF savings plan allows your retirement provision to grow - but there is still more to life! Think about your medium-term plans and goals and prepare for them with different portfolios. Set savings goals such as B. a trip, building a house or a wedding and check with the digital investment advisor which strategy will best lead you to your goal.

Some examples of savings goals

It is best to split your investments over several portfolios - this is the smartest way to make the most of the opportunities on the world markets. At growney you can as manyDepotsCreate free of charge, one for each savings goal with a unique strategy.