“Sometimes you have to take risks,” says Alex Benz. The 31-year-old says this about his amazing hobby, freeskiing. But the self-employed entrepreneur is not afraid to take risks when investing money. He invests his savings independently. To do this, he must also know the various investment options and be able to evaluate opportunities and risks. “The more factors you know, the smaller the risk,” says Alex Benz. This applies when skiing and docking.
The example of Alex Benz shows that you can invest in systems even as a young person. He chose e-commerce and is actively looking at his securities. This is just one of several possibilities. Anyone who prefers to trust the experts when investing will find the right solution with appropriate services at PostFinance. The following points answer the most important questions on the subject.
Saving or investment?
On average, about 20 percent of income is saved in this country. Considering this rate of savings, significant amounts accumulate. If you are saving for a specific purpose, for example a large purchase, it is recommended to use a savings account. Also, as any amount can be deducted at any time. However, due to the currently low interest rates, the amount of savings will hardly increase. Therefore, investing some of the money in the medium and long term may be a good alternative.
What percentage should I invest?
It depends on personal needs. Basically, fixed expenses such as rent, car, insurance and variable expenses such as daily necessities and restaurant visits should be taken into account in the budget. In addition, reserves should be set aside for the unforeseen, as well as for extra expenses such as vacations or large purchases. The rest can be created. This is already possible with small quantities.
Do I have to be rich to be an investor?
No! You can invest starting from 20 francs per month – for example by making regular payments to a savings plan. This results in long-term opportunities for wealth accumulation. The deposit amount can be adjusted at any time.
How big is the investment risk?
Securities such as stocks are subject to price fluctuations. Stocks, bonds, precious metals, commodities and other types of investments can be pooled in a fund. This means there is a chance to raise capital with the funds, but there is also the risk of price losses. Alex Benz currently also relies on cryptocurrencies. If this is very crypto and does not trust digital money, you have the option of making lower-risk investments or diversifying your investments, i.e. betting on a few titles or financial products. This reduces the risk of price losses.
What is ROI?
Returns are often used to compare different investment categories. Because the distribution of profits in stocks is called a dividend, there is interest in bonds and income in funds is either distributed or immediately reinvested in other fund units. In addition, share prices or the value of a fund can rise, thereby increasing assets. But of course, prices can also fall, and therefore assets are reduced. A return is therefore not guaranteed – even positive price development in the past is no guarantee for the future.
What if I need money in a short time?
If you value high liquidity, you should leave some in the savings account. In addition, a salary reserve of about three months is recommended for the unpredictable. If you absolutely have to sell, the moment may not be ideal because you are still at a loss. In other words, the risk is that you have to sell at the worst possible time. If you want opportunities to accumulate wealth, you must invest long-term.
Do I need to know about stocks, bonds and funds?
You don’t need to be a financial expert to deposit money. But basic knowledge of stocks, funds and bonds is required. If you want, you can make your own investments like Alex Benz, get advice or transfer your investments to professionals at PostFinance.
Advertisement by PostFinance