The best way to increase your wealth or simply to secure your finances is to invest your money. It is an opportunity to make money multiply by itself with little effort.
It sounds so tempting, but in spite of this, the vast majority of people still choose not to invest their money, even if they have free money. This is often due to widespread investment myths that are not true or have been distorted. Here are the typical investment myths and an explanation of why they should not be believed.
Investing is very difficult
Many believe that investing is just the privilege of financial gurus and bankers, because without a thorough knowledge of finance and economics there is no point in starting something. This is a very misconception. Yes, if you want to make millions through investment alone, you need special knowledge and years of accumulated experience, but no special knowledge is required if you want to keep the value of your savings or make a little money. You can, for example, invest money in funds, bonds or stocks of large, solid companies.
Profit in these cases is almost guaranteed even if you are not keeping track of your investments and are not interested in what is happening in the economy and financial markets. If you still want a higher return, some effort should be made, but it can be learned gradually. If you start with sound and safe investments, you will understand how investing translates into practice and learn the basics of investing. You will then be able to get involved in more complex transactions and earn much higher amounts.
Investing is too risky
The second most popular myth that discourages many from investing is the high investment risk. It is only understandable that people do not want to lose their savings and are reluctant to invest money when there is a chance of losing it, but again, investments are very diverse and most types of investment carry a very low risk. For the types of investments already mentioned (investments in funds, stocks and bonds of large companies), the risk level is very low.
The returns are not great either, but it’s better to invest money and get at least a few percent a year than just keep your money and let it fall in value. In fact, many high-risk investments, such as equity investments in small, fast-growing companies, are not as risky with a little understanding of the stock market and business. For example, speculation in currency funds or stock markets is considered a high-risk investment, but it is not intended for beginners.
Investing is time consuming
Return on investment is called passive income precisely because it does not require active employment. Money essentially multiplies by itself. If you want to earn not only interest but also, for example, stock price fluctuations, you need to keep track of stock price movements and be aware of economic and industry-specific developments so that you can anticipate events, but it is less important for long-term investments.
Depending on the type of investment and the object you are investing in, you should spend some time on it, but you don’t have to worry about running something just to keep track of your investment.
To start investing you have to have very big savings
Another popular belief is that it takes at least a couple of thousand to start investing and actually reap some benefits. It is not true. True, the more money you invest, the higher the return, but it is possible to start investing with very small amounts.
Even if you have a few tens of euros at your disposal, you can open an investment account that you can gradually replenish. If you already have a couple of hundred euros, you can think of investing in stocks, but the sums of more than a thousand euros are already big enough to be reflected in the types of investments and investment objects.