The usual suspects such as overnight or fixed-term deposits, savings accounts and bonds are becoming increasingly unattractive as these investments are hardly worthwhile.
But even in these times, there are exciting opportunities for resourceful investors to increase their own money. But how can you invest your money now without taking a high risk?
Today we would like to present two options that will allow you to invest your money profitably in the age of zero interest and post-corona:
Shares: How do I buy shares?
Real estate: How can you invest in real estate?
How can I buy shares?
Why do shares make sense in these times? For one thing, we are dealing with asset inflation. This means that tangible assets are increasing in value. And this is quite independent of the inflation rate for conventional goods such as food, clothing, housing costs, costs for care and health etc. The inflation rate is below two percent, while tangible assets such as shares and real estate are rising strongly in value.
But how do I, as an investor, get a tangible investment such as shares?
Shares are purchased through a broker. To be able to trade with shares, you open a securities account with your broker. You can then use this securities account to buy and sell shares on the stock exchange.
The cheapest broker is currently TradeRepublic. The costs per trade here are just 1 Euro. The profit arises from the so-called spread. This represents the difference between the buying and selling price.
Which shares you buy depends on the strategy you follow. Basically, you can choose between value and growth stocks. This means that you can invest in either value or growth stocks.
In the case of intrinsic value, the key is to buy the shares when the value is very low, in the hope that it will soon stabilise again. For growth stocks, you are more likely to bet on the value rising over the years.
Especially if you want to invest your money long-term, growth stocks make more sense. In addition, there is no need for technical analyses, as you only need to consider the fundamental growth figures of a company.
This brings us to the point of time horizon: how long to invest money?
As already mentioned, a long-term investment makes many analyses easier for you. It also minimizes your risk, because a long time horizon has a positive effect on performance. If you are considering investing your money in shares, you should plan at least in the medium term. In this context, medium-term means five years or longer.
How are shares taxed?
Stock gains must be taxed in the course of the final withholding tax. The final withholding tax is 25% plus solidarity surcharge and church tax, if applicable. However, as a single person, you can benefit from a tax-free amount of 801 euros; as a couple, the tax-free amount is 1602 euros.
Investing money in a property that the tenant pays off for you: the process is not as complicated as many people think.
Once you have decided on a suitable property and found a financing bank, you arrange a notary appointment with the seller. After the purchase price has been paid, the notary will take care of registering the change of ownership in the land register.
The costs for the notary and the land register vary from state to state, on average these costs amount to 1.65% of the purchase price.
The great art lies in identifying the right object for purchase and financing the purchase at advantageousconditions.
Which properties make sense?
Not every property represents a successful investment. There are some criteria that should be met to make a good deal. A list of the most important criteria includes:
Good macro and micro location, so that future rentability is guaranteed
Positive future prognosis for the location in terms of economic factors, especially immigration and emigration.
How long to invest money?
As with equity investments, we recommend an investment horizon of at least medium-term. Since you can sell your property tax-free as a private investor after ten years, it is advisable to keep an eye on this period.
If you want to invest money for your children, a different time horizon usually applies. Here you should think more long-term. You can read more about this topic in our article Investing money for children. Among other things, we address the questions: How do I save money for my children? How can I invest my money profitably to secure my children for later? How long should I invest the money?