The right money
Choosing the right investment is a real challenge in these times of low to almost nonexistent interest rates.
If you rely on tried-and-true options such as time deposits or overnight money or. Placing a life insurance policy only has the guarantee of losses. This is because the interest rate granted is a maximum of one percent per year, but the rate of inflation, and therefore inflation, ranges from one and a half to two percent.
From a financial standpoint, it's almost smarter to spend the money beforehand and invest it, for example, in home improvements or necessary purchases.
However, there are also alternatives to investing money, which are much more rewarding, such as maritime digital investments, shares or ETF and crowdinvesting, to name just a few possibilities.
Even cryptocurrencies and tangible assets are repeatedly included in lists of possible financial investments.
Why a cash investment is necessary?
Some will ask themselves why an investment of money is necessary at all.
The reason lies in the often insufficient state pension. In order to compensate for the possible difference to the actual financial needs in old age, an investment of money is required, which can also take the form of a private pension plan.
Which type of investment is the right one here can hardly be judged across the board. As a rule, you should go for a mix and also give innovative products a chance.
Which investment makes sense?
An investment that was considered sensible before the onset of the financial crisis in 2008 is now no longer recommended.
The reason lies in the falling interest rate level, which was still at 4.25 percent in 2008 and has been continuously reduced to 0.00 percent since 2016. An increase in interest rates – experts agree – is not expected in the coming years, so that fixed investors must continue to live in poverty.
The result is that virtually no interest is paid on fixed-term deposits, overnight money or money in savings accounts, and life insurance or private pension insurance based on fixed-term deposits have also lost their appeal. It is no longer worthwhile.
On the other hand, it makes sense to make an investment that involves a well-calculated risk and is based on tangible assets. Meant are thereby both shares and share funds and ETF in addition, real estates and digital maritime Investments or Crowdinvesting.
The list could be continued, because particularly in times of the Internet exciting possibilities of the investment of funds result, which function completely differently than the earlier course to the bank advisor.
How does an investment work today??
The fact that times have changed can also be observed in today's means of obtaining information and concluding a financial investment.
In the past, it was common for the local bank employee to provide the impetus and to choose from a very limited number of products. Theoretically, of course, even ten or 20 years ago it was possible to invest in the stock market or buy shares in funds, but these were almost niche products.
What was offered was what enabled the bank to make profits and the advisor to earn commissions, which also worked with high guaranteed interest rates and created win-win situations.
Today, however, safe products have largely disappeared from the market and banks as the sole authority for investing money have also lost importance.
Whoever invested in the 20s of the 21. Century about finances and a financial investment informs, uses for this the Internet. A wealth of informative websites can be found here, and those who keep track quickly gain a comprehensive picture of their options.
Of course, classic products such as private pension insurance or life insurance are still offered today, but these increasingly contain variable components from equity funds or shares, which exclude the previous security and guarantees.
However, those who want to invest in shares or funds can do so directly and without the detour of an (often expensive) insurance policy.
Shares and ETF as an investment
In fact, stocks have done tremendously well in recent decades and have been considered the highest-yielding forms of investment for many years.
Stocks ideally throw off annual dividends and capital gains are also substantial. Of course, media reports mainly present the success stories, because a rise in the German share index (DAX) does not necessarily mean that all stocks have risen equally.
In other words, gains may have been made on the whole, but both winners and losers exist in the stock market. If you bet on the wrong horse, you may also have made a loss in this area, so this investment must be considered risky.
The risks are somewhat mitigated by relying on equity funds. We are talking here about a "basket" containing different shares, usually representing sectors or even countries or a share index such as the DAX or Dow Jones. Compared to fixed deposits, this was also a good and sensible investment with solid returns.
However, if you decide to invest in equity funds, you should look for ETF right away. Behind the abbreviation stands the Exchange Traded Funds and thus equity funds, which are traded directly and therefore require virtually no issue surcharges. The investment is thus simply more favorable.
Crowdinvesting as an investment
Also a possibility of the investment into enterprises or also concrete projects represents the Crowdinvesting.
The advantage consists of the fact that on the part of the investors no commissions must be paid and also already smaller sums in a long-term investment can flow. Digital maritime investments are an example of this.
In concrete terms, this means investing in ships by granting loans, and the investment of money promises a return of between six and seven percent. Because maximum transparency is ensured, risks can be well controlled and monitored.
The "best investment
The "best investment" does not exist and will never exist. The list of possible investments could also be extended to include real estate, cryptocurrencies or tangible assets such as classic cars or art, and gold and silver are also mentioned time and again.
Anything is possible and has different profit potentials. What is relevant is that the risk is spread and that one says goodbye to the security thinking of earlier years.
A financial investment, which yields without risks, does not give it at present simply and it will probably also in the near future not give it.