One specific type of equity fund that is worth mentioning separately is index mutual funds. These are funds that allow you to invest money in the entire index, i.e. the market average. Their conduct does not require the work of analysts (the fund buys only those companies that are in the index mutual funds), which makes it much cheaper. This is a very important criterion, especially if we assume investing for several dozen years.
As you know, it is very difficult for many funds to stay above the index for a long time. The statistics even say that most funds perform worse than the market average. Therefore, if we have no idea about stocks and invest in the long term, they are the most for us.
Controlling Expenses As A Form Of Investment
A good way to multiply your money with virtually no risk is to review your expenses. Especially the monthly ones. Sometimes it is enough to invest only a little time and, for example, eliminate unnecessary bank cards, for which we pay a few zlotys every month, or reduce the cable subscription.
Sometimes it is worth spending money on investments to buy newer home appliances (e.g. a more economical refrigerator or a dishwasher). This will allow us to make long-term savings, and the money saved is money earned. So let’s check where the money “leaks” from our pockets.
Investing In Yourself – Education
Investing is not only about a tangible rate of return on investment. It is also increasing the value of both things and yourself. So let’s think about whether it is not worth spending money on education instead of investing.
Of course, when we think about investing, it seems logical to use the resources for books on finance and investing. But first, let’s think seriously. Maybe it will be much easier to spend money on qualifications in your profession. If we increase the salary thanks to this, the return on such investment will be huge.
It is also worth thinking about various courses, training that will allow us to save on expenses. For example, if we eat out, a cooking course is something for us. A gym pass saves us expenses on doctors, etc. These matters are obvious, but many people forget about them, directing their attention towards investing in some financial assets.
If we already have money invested somewhere, it is worth incurring additional costs to increase our knowledge about the forms of investing we choose. Not only will this allow us to reduce the risk of our investments, but it may also allow us to get rid of intermediaries (e.g. instead of investing in an equity fund, we will buy shares of several companies ourselves).
Social Loans
Social loans are an unusual way of investing in small amounts. They consist in the fact that through specialized websites, we lend small sums of money to other people. The borrowers pay them back and we profit from the interest. In this way of investing, we can feel like a bank.
The unknown in this form of investing, however, is a risk. It is difficult to estimate them. We never know if we will get the money back and we will not have to use debt collection. Services try to verify borrowers, but sometimes this is not enough.
Small Amounts Will Turn Into Large Amounts Over Time
It is important to systematically set aside new funds for investments. Warren Buffet, the most famous investor in the world, earned 93% of his $ 58 billion in earnings after the age of 60.