Table of Contents
- 1 Build financial reserves: Invest a small amount of money sensibly
- 2 Take a close look at income and expenses
- 3 Get into the habit of saving routine
- 4 Build a financial cushion
- 5 ETF – investing on your own
- 6 Perseverance in saving pays off
- 7 ZDFheute on WhatsApp
- 8 Here are two PAA-related questions, each on a new line:
Build financial reserves: Invest a small amount of money sensibly
You don’t necessarily need a big account to invest money. What should be taken into account in order to invest even small amounts sensibly.
Even with small sums of money you can save a contribution to your retirement provision. How you can invest even small amounts of money smartly.
Source: imago/Wolfgang Maria Weber
Setting aside a hundred euros or more every month for retirement provision is simply impossible for many people. But what do you do if you want to build up a financial cushion but your own account doesn’t allow you to make big jumps? “It is crucial that you start building up reserves,” says Saidi Sulilatu, editor-in-chief of Finanztip.
Even amounts of, for example, 25 euros per month can make a difference if invested wisely.
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Take a close look at income and expenses
Saving is always good, but in order for it to work, you should be as debt-free as possible. If money is needed, for example to pay off an installment loan or to pay off a credit card limit that has been maxed out, this should take priority. The most important thing is not to get into financial trouble.
The best investment is debt that you save yourself.
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Saidi Sulilatu, editor-in-chief of Finanztip
In order to have more money available for saving each month, it is worth taking a look at current expenses and putting them to the test. There are often cheaper alternatives, especially when it comes to insurance, energy suppliers and mobile phone contracts. The money saved can then be invested to increase value.
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Get into the habit of saving routine
To get a feel for what it means to save regularly, you can start with a daily savings account. To do this, an amount should be set that is transferred to the account every month. Saidi Sulilatu gives the tip: “First decide based on your gut feeling. Even if you realize that you have gambled too high, you can adjust the standing order at any time.” The investment is low-risk because the money saved can always be withdrawn.
If you don’t have enough monthly savings for everyday expenses, you often automatically limit yourself and spend less money.
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Saidi Sulilatu, editor-in-chief of Finanztip
A free account on which you earn interest and where you always have access to your money: daily money. There are more and more good offers, mostly from direct banks online.03.07.2023 | 4:34 minutes
Build a financial cushion
Basically, it is advisable to first save a sum that you can access at any time before you start investing in financial products such as ETFs (Exchange Traded Funds). This is important in order to be prepared for unexpected expenses such as car repairs or a high additional payment for additional costs. “The rule of thumb is to only invest when you have a sum of around three net monthly salaries as reserves in your current account,” says financial expert Sulilatu.Finally there is interest on your savings again. If security is important for many years, but also profits above inflation, you can think about fixed-term deposits.04.03.2024 | 3:49 minutes
ETF – investing on your own
If you have the financial cushion and want to invest smaller amounts, you can invest in inexpensive ETFs, for example. This refers to stock market funds that bundle many different securities. It is handled via appropriate apps.
The advantage of ETFs is that there is no minimum amount required and you can manage your investments yourself without incurring additional costs, as would be the case with investing in life insurance, for example. “The costs here can be four to six times higher,” adds Sulilatu.
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Perseverance in saving pays off
Even when investing smaller amounts, the credo applies that a certain amount of perseverance is required. Stock prices can also fall from time to time. Then you should keep calm and wait until they settle down again. “For a successful investment, you should also be prepared to forego the money for at least 15 years,” says Saidi Sulilatu. If you want to invest in a promising and cost-effective way, it is often only worthwhile in the medium to long term.
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ZDFheute on WhatsApp
Source: ZDF
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## Open-Ended Questions for Discussion:
**Saving Strategies:**
* The article advocates for having 3 months of net salary saved as a financial cushion before investing. Do you agree with this recommendation? Why or why not? What factors might influence a person’s ideal financial cushion amount?
* What are some different strategies for building a financial cushion, beyond simply saving a set amount each month?
* The article mentions “low-risk” investments like daily money accounts. What other low-risk investment options might be suitable for individuals prioritizing capital preservation?
**ETF Investing:**
* The article suggests investing in ETFs can be a good starting point for beginners. What are some of the benefits of ETF investing compared to other investment options like individual stocks or mutual funds?
* ETFs offer a diversified investment approach through bundling securities. What are the potential drawbacks of this approach? Are there situations where investing in individual stocks might be more appropriate?
* The investment horizon for ETFs is ideally 15 years or more. What factors should individuals consider when determining their investment timeline?
**Stock Market Fluctuations:**
* The article briefly discusses stock market fluctuations. How can individuals psychologically cope with market volatility? What strategies can help mitigate the emotional impact of market
downswings?
* The article suggests patience and a long-term perspective are crucial for successful investing. In what ways can individuals foster these mindsets?
* What are some potential risks associated with investing solely based on long-term predictions?
These questions aim to spark insightful conversations about financial planning and investment strategies while encouraging participants to share their perspectives and experiences.
**Thematic Sections:**
1. **Building a Financial Foundation:** This section focuses on the importance of having an emergency fund and saving strategies.
2. **Exploring ETFs as an Investment Option:** This section dives into the benefits and drawbacks of ETFs, exploring their suitability for different investors.
3. **Navigating Stock Market Volatility:** This section addresses the psychological and practical challenges of stock market fluctuations and offers strategies for coping with uncertainty.
