What do you need to know before investing?

For example, a personal development book could be a good investment in yourself if you're going to use the information you read to make money, right? Well, the same goes for money. If you invest them in certain things that bring you more money in the future, it means that you have made a very good investment.

Investing is an action you do every day. Even if you are not aware of it, any amount of money that comes out of your pocket is somehow a better or less good investment. While some actions bring you money, others fall into the category of expenses, that is, the money invested does not return to you. 

However, when we talk about certain investment channels, the ideal would be to direct your attention to redirect your money, in those investments that generate you a lot of money in the future and that will make you financially independent after a while.  

Fine, but how do you know which are those good investments that are worth investing in? Let's find out together from this article. 

What do you need to know before investing?

Before making a large investment, especially if you are just starting out, it is good not to jump into those investments that involve taking on too many risks even if the return is more modest. As you master it, you will be able to move on to larger investments with a higher return. 

So, until you gain some experience, first of all, look at the budget you have to invest and invest only what you are willing to lose. For early investments, the risk of losing money is quite high, so don't invest your entire salary. 

Another thing that is essential to know when you want to make investments is not to trust the money you expect to earn. Some investments may give you faster returns, while others will require a lot of patience. And long-term investments are usually the best option. 

Last but not least, before you start investing, educate yourself on the method you choose. If, for example, you want to invest money in the stock market, it is important to have a good understanding of how such investments work, what to pay attention to, what the risks are, and what exactly is worth investing in. 

The benefits of investments

While money invested in things that don't make you any other money is more like money spent, money you choose to redirect to investment channels like the stock market, cryptocurrency, NFTs, or real estate gives you multiple benefits. 

Substantial return on investment (ROI).

One of the biggest advantages is that the money you invest has the potential to grow substantially before it comes back to you, which doesn't happen when you put it in a savings account, for example. 

Of course, a lot here depends on the types of investments you choose and their levels of return.  

Collect more money than you deposited

If, in the situation where you set aside money, you will have the same amount which may no longer have the same value, after a while, in the case of investments, you enjoy an increase in the amount deposited. 

Here it is different from what happens in the case of depositing the money in a savings account, where the interest will be constant. For certain investments, the interest rate can fluctuate widely. Although there is a risk of losing a certain amount, the same possibility is that it will increase incredibly. 

You enjoy financial stability.

To make sure you balance risk with good investment returns, learn to invest in multiple directions. In this way, you will have the guarantee of having stability even when there are losses in certain parts. 

In addition, you will have income from various parts, which will ensure that stability that a single job cannot give you. 

You create your own future and your own life.

They taught us to work all our lives, to have a decent pension. But this does not necessarily have to be the way that others impose on us, rather we can create our life exactly the way we want from now on. From this moment on, when we choose to make investments that ensure a better future. 

Every investment you make now can bring you a different future, a better one and even an early retirement, if you know what to invest in to get the best return. 

In this way, you can become financially independent and enjoy the life you have always wanted. Or you can give your children a better life. 

You are not affected by inflation

While in the case of depositing an amount in a savings account, the interest you receive, which is quite small anyway, does not even cover inflation over time, in the case of investments this does not happen. 

Types of investments

To ensure a financially secure future, regardless of the context in which we find ourselves, it is good to turn your attention to various types of investments. 

So now I said, in any investment there are certain risks but when you know how to distribute the money in such a way that what is lost on one side is gained on the other, then you have made the best choice. They say that in the investment world, all profits actually come from 20-30% of the money you have invested. But this profit is as if it came from the total amount invested. 

So let's see what types of investments you can make. 

Investment Property

Real estate investments are some of the most profitable but also volatile types of investments. For example, owning shares in a certain company may bring you little income in the short term, but you own the title to the property and, in the long term, you have a lot of security of this income. Also, if you know which companies to direct your investment to, its value can increase substantially. 

In this type of investment you can have the right to a certain part of the value of the respective company or you can even have the right to carry out certain activities within it. 

Investments in businesses and projects

If you have certain amounts of money but you don't want to start a business, a very good idea is to invest that money in other people's business ideas, which have a very high development potential. Many investors choose to do this, thus putting their money to work through those who have ideas and want to develop a business even without capital or to develop certain projects. 

Investments in real estate

Investing in real estate is one of the most convenient investments and also the most common. For this type of investment you only need money and find tenants or sellers, otherwise you want to take these investments to another level.  

Studies have shown that rental property investments can earn you up to 8% annual interest, after all potential expenses and risks have been covered. 

Art objects or precious metals

Art and precious metals have always been investments that people have made and continue to be many people's favorite investments. Even here, the risk that your sale will go up or down is the same as with any other investment. 

CAPTIVITY 

Whether you choose to direct your investment to certain companies or even to the government, these investments are basically a kind of loan that you give in exchange for interest. For the most part, these investments are much safer than others, but obviously here too there is a pretty high risk that the company you invested money in will go bankrupt. In the case of the government, the risk is somewhat lower. 

Investments in the stock market 

In the case of these investments, the risks are quite high, as is the value of the gain otherwise. Here, a lot of information is needed beforehand to know how, how much and where to invest to ensure that you will have that balance of profit and loss.

Invest in cryptocurrencies and NFTs

The newer investments that a lot of people are choosing to invest their money in are investments in digital currency and works of art, these are investments of the future. Although the market is quite volatile here and income can increase substantially extremely quickly. 

As with investing in the stock market, it is good to be aware of what is happening in this market and have a basic understanding of this type of investment before you start investing. 

Before discussing the best investments, it is necessary to go through some essential steps. Are here.

educate yourself

In order to truly make the best investments, start by investing in your education first. As long as you don't know what an investment entails, what to invest in and how it works, what parameters to watch for, or how to make certain assumptions, things are going to be quite difficult for you. 

One of the most important reasons why people do not invest is not the fear of losing money, but the lack of information. Fear comes from the insecurity of not knowing the information that can help you make clear decisions. 

It is true that there are risks, but when you are very well informed, you are much more likely to consciously take certain risks and balance them with gains. You'll know exactly how to divide your budgets to balance the profit, loss, and profit balance. 

Get rid of  loans  and debts.

Before you start any type of investment, invest in being in control of the money you are making right now. If you have loans or debts, try to get rid of these debts first. Investments, above all, mean commitment. 

And if you start making investments from the energy of debts, you will only focus on earning quickly, you will not know how to look at certain losses detachedly, and you will go from one debt to another. 

So, a first investment that you have to make in this case is the coverage of debts and credits. 

Examples of short-term investments

Short-term investments (between 1 and 5 years) are investments in which you will not earn much money, as in the case of long-term ones, but they give you the advantage of enjoying the money much faster. Also, they are less risky in some ways. Here are some examples of investments you can make. 

Here are some examples of short-term investments:

• Forex Market    – If you don't know anything about investing but want to, you can start with this platform, which is basically a decentralized market where currencies are traded. These can be done both short term and long term. The risk  of loss is quite high, especially due to the leverage effect, but also due to the fact that transaction refunds may cause you to invest more or take much higher risks;
• Corporate Bonds  – There are certain companies that need money in the short term, for various projects, and in exchange for your investment, they offer you interest at certain regular intervals, such as quarterly or even twice a year. The risk  here is that that company goes bankrupt or that the project is not completed. 
•  Money Market Accounts    – This type of account is a bank deposit that gives you a much higher interest rate than a regular savings account, but it also requires a larger investment. The greatest risk  occurs over time and most of the time, losses occur due to inflation.

• Mutual funds:   These are funds that attract investors and take the form of a legal company. There are many funds of this type in which you can invest in Spain. Risks  increase even in the short term and returns can be reduced in the event of an economic crisis. 
• Short-Term Stocks:  Short-term stock market investments can be made. The steps are quite simple, as long as you use a specific platform for this type of investment. The risks are quite high if you don't know what to invest in and especially how to divide your budget. 

What to invest in long term?

Investment specialists believe that the best investments that can be made are those for the medium and long term. Because? Because the fluctuations that occur during this time will train you and you will be able to make the best decisions in the future, thus avoiding rash decisions. 

In addition, long-term investments now give you other advantages, such as: less taxes, less commissions, considering that you trade less frequently, but also much higher profits. 

If you don't know what you're investing in for the long term, this is the type of long-term investment you can do.

• Government Bonds/Securities  – These are among the safest investments you can make, due to the fact that they are fully and directly guaranteed by the government. Also, they are not taxable and can be sold even before expiration. The risk  of bankruptcy here is quite low here. 
• Long-term stocks  – As you have seen, you can invest in short-term stocks, but there is also the option of investing long-term in certain very safe companies. Here the risk is quite low, but as in everything, obviously there is a risk that the company will stop working after a few years;
• Mutual Funds  – Through these long-term mutual funds, you have quite a few advantages compared to putting the money in a savings account. From here you receive annual commissions and your money is not affected by inflation, since it is reinvested. The risk  is the same as investing in the stock market. In addition, here you receive the commission imposed by that bank, where you open the fund. 
• ETF Financial Instruments:  These financial instruments are traded on the stock exchange like shares. They are made up of multiple assets such as stocks, bonds, commodities, and indices. This type of investment is very good when you want to diversify your portfolio or when you don't know what to invest in  . The risk  here is that if an ETF closes you have to sell faster than you would like and selling niche ET can be quite a hard sell. 

• Real Estate –  Real estate is definitely an investment you can make for the long term, especially when you don't have a lot of knowledge about other types of investments. As in any investment, there are  risks,  such as destruction or devaluation, but these are very small compared to the gains.
• Silver:  Silver is a long-term investment worth considering, especially since it will be heavily used in the electric car industry. Although its price may seem low, for now you will surely have a lot to gain in the long run. 

In what to invest small amounts – 100, 200 euros?

Before you think you have very little money to invest, know that any amount, no matter how small, that you don't spend but do invest has the potential to multiply your deposited money. 

Thus, even if you have an amount of 100 or 200 euros at your disposal, you can make certain investments. If you are wondering where to invest small amounts like 100 or 200 euros, here are some ideas to inspire you. 

invest in education

Before launching into any type of investment, do not forget that a first step is to invest in education. So buy books, courses, podcasts or listen to free material on investing.  

The investment field is very broad and can be very confusing. So, first of all, start to get an idea of ​​the investment world and only then start to delve into a certain type of investments, which you feel you are attracted to. 

Or, if you still have this amount of money, invest in something you're passionate about and get better at it. Surely this investment will bring you much larger sums at some point, which you can then think about what to invest.

Although some investment platforms may require you to invest a minimum amount, you can turn to those platforms that do not require large amounts of money to get started. 

Another thing to keep in mind when you want to start investing is not to forget to reinvest. Any commission you make, reinvest it. This way, your amount will be increasing and you will have a much better chance of earning more money soon, even if you started with a very small amount. 

Other investments you can make:

• investment accounts;
• stock shares;
• Investment funds;
• state values;
• future projects of some companies;
• precious metals (silver, gold, etc.)
• CRYPTOCURRENCIES. 

Focus on trading platforms that do the work for you, initially like eToro, Mintos, Capital.com, Libertex, etc.  

What should you choose to invest 5,000-10,000 euros in?

When you already have a larger amount, the investments you can make are multiple. But the thing to do here is to diversify and not put "all your eggs in one basket." 

So, divide the money and invest in several directions, to make sure that you will have a profit, when you think about what you invest 5000, 10,000 euros or greater amounts. 

Don't forget to focus on long-term investments, because you can make this money grow substantially if you're patient. 

This is what you can invest in:

• Investment funds;
• stock shares;
• property rights in businesses and projects;
• CRYPTOCURRENCIES;
• NFTs;

What to invest in the stock market?

The stock market is a market where different things are traded, from shares of some companies to precious metals, raw materials (wheat, oil, etc.). If you are not familiar with how the stock market works, the best idea is to call a broker, who will help you when you want to make certain investments. This is a man who is aware of what is going on and the risks can be much lower than when you want to go it alone, especially when you are just starting out. 

If you don't want to use a broker, you can use online platforms like  eTorro , where you can trade very quickly. Here you will make the decisions, so you have to know very well what you want to do.  

Nobody will tell you what to invest in in the stock market, but at most you can be given certain predictions or anticipations, based on certain analyzes, which you are obliged to follow, to make the best decision. 

Be that as it may, to become a stock investor you need an extremely large amount of information and this type of investment is not recommended if you are a beginner or self-employed.

Stocks worth investing in

There is no concrete answer to the question “what stocks are worth investing in”. Because? Because you are in charge of your money and the decisions you make, especially when making investments. 

The biggest responsibility in this case, which falls on you, is to inform you about certain companies or stocks that are worth investing in, but no one can give you a guarantee. 

In investments, things are not certain and therefore the only thing that can be obtained are possible forecasts for certain periods of time, but even these are not 100% certain. 

Therefore, the stocks worth investing in are definitely those companies that you follow long enough to make the best decisions for you and your investment. 

What to invest money in during the crisis?

In times of crisis we usually put money on the mattress, but in these times doing so is one of those decisions that will make you lose money, without doing anything. In times of crisis, inflation rises very high, but the prices of certain financial assets also fall. 

Thus, in times of crisis, the best solution is to invest. For example, the price of certain stocks has massive drops, as well as the price of digital currencies. So instead of focusing on what's happening, look on the bright side. 

Remember. You make a profit when you buy at good prices, not when you sell. These are just some of the things to consider when wondering what to invest in during a crisis. 

Future Projects  : There are many future projects, such as those in  education  , medicine, technology, that you may not believe in now. But these domains have existed and will always exist. Any project developed in these directions deserves your attention because they will develop more and more in the future. 

Stocks  – This year, the price of certain stocks has fallen more than 80%. 

Cryptocurrencies  : if we look at the most valuable currency, bitcoin, which a few months ago was worth more than 60,000 thousand euros, its price is now 3 times lower. 

Silver  – It is not only a precious but also an industrial metal, for which the demand is very high. Although it has a low price, in times of crisis its price increases considerably. 

In times of crisis it is good to invest in anything below the market price. If you already have an idea about investments and have followed the history of money and crisis periods, you know that investments are made in crisis periods and sales are made in boom periods. 

Therefore, invest in what is now below the market price, because the boom period will inevitably follow, but also in projects with great potential for future development. Be a visionary and you will only win.  

What NOT to invest in in 2023?

Any investment that you know nothing about is an investment that will not be beneficial to you. We could tell you not to invest in certain types of investments but in others, but that won't help you if you don't know anything about that market anyway and how to redirect your money in a fair and balanced way. 

As you already know, every investment has a risk, so if you are not willing to lose money to earn others, then do not invest in anything. You will lose money anyway, even if you choose to collect it in cash, due to inflation and currency devaluation. 

 However, a clearer answer to this question is not to invest in things that do not make money. Like a bigger house, a more expensive car, a better phone, if you don't choose to use them to make even more money. 

So in 2023, invest in future assets and not things that just take money out of your pocket.