If starting to invest is something that scares you or seems out of reach, find some comfort in knowing that you are not alone in the world. An Ally Financial study even found that 61% of respondents thought investing was a “scary or intimidating” idea.
The good news is that there are very simple solutions to overcoming these fears and easy tools to start investing today, no matter how much money you have and whether or not you know about investing.
It is possible to invest without fear!
It is normal that thinking about investing can feed some fears. After all, history is full of disastrous cases and tragic stories of failed investments. But there are good reasons to invest without fear.
First, the return on your investment doesn’t matter much at first. What really interests you is your ability to retain savings. This means you may make some mistakes if you decide to invest, but those mistakes are natural and in most cases will not even be your fault. By the end of the day, everything will be fine as long as you can retain some savings (even if returns take a while to grow).
Investigating very well what you invest in – and the conditions guaranteed for it – is key to breaking unfounded fears about the investment market. The best you can do is to be fully aware and bet on market literacy to be prepared and able to invest easily.
In short, there is no need to be afraid of making an investment!
Why should you consider investing?
In the modern world there are perhaps two ways to earn money: by working (on your own or for someone else) or by letting your money work for you. If you keep your emergency savings in your pocket or under a mattress instead of investing them, the money you have will not earn you any money and you will never have more than you could save. Investors can make money by receiving interest on what they have invested in savings – or by buying assets that grow in value.
Investing even a small part of your savings can open the door to a new source of income for your personal or family budget. If you do so responsibly, you will be able to generate money with money that would otherwise be put aside.
The power of compound interest: investing early pays off
Starting to invest with whatever value you have available is better than not investing completely. The sooner you start, the greater the reward for the best friend of any investor: compound interest.
Do not panic! Not all interest is a bad sign. When we talk about interest, your mind should immediately take you to the concept of “credit” – but interest can be on your side when you put money into a savings or an investment.
Compound interest is only interest that is added to the capital at the end of each period. Thus, you always have new capital where interest is again applied.
For example, in an investment scenario of € 1000 with a compound interest of 5%:
1. year: € 1,000 + € 1,000 x 0.05 = € 1,050
2. year: € 1,050 + € 1,050 x 0.05 = € 1,102.50
3. year: € 1,102.50 + € 1,102.50 x 0.05 = € 1,157.63
Not only you will be earning interest on the initial investment value, but you will be earning interest on previous interest. This is how a small investment can grow exponentially in a short period of time.
It is possible to start with little money
It is a wrong idea to assume that you have to be rich to invest. Yes, many traditional investment markets are designed from scratch for those who have a lot of money to invest, but these days there is no shortage of investment options for those without hundreds of thousands of euros. It is possible to start with very little money.
We live in the age of digital banking and fintechs, and what modern investor wants, above all, are clarity, ease and versatility, something that online and digital transformation allow.
In this context, several digital investment platforms emerge. This is the case with crowdfunding , crowdlending and real estate investments.
When can you start investing?
The answer is simple: Now!
Take Bondora , one of Europe’s most recommended investment platforms. With Go & Grow , Bondora presents a solution where the investor can enter the peer-to-peer lending market without any complications: just put funds into your account and you’re done! Interest begins to be added daily. And if the “Automatic Transfers” option is enabled, all interest received will be invested, generating the desired snowball caused by compound interest. No need to calculate or track, just watch your money grow.
Expected yield is up to 6.75% * per annum and the investor may at any time request the 100% withdrawal of funds invested in Go & Grow. It’s one of the simplest and easiest ways to say goodbye to the fear of investing and getting started today!
Whichever option you choose, keep in mind that the sooner you start investing, the higher your future profits tend to be.
* As with any investment, capital is at risk and investments are not guaranteed.
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