Those who are young often are not worried about their later financial resources. There are investments that should be tackled as young as possible to achieve the optimal result.
1. Buy stocks and let the time work for yourself
In the long run, the investment in shares such as bonds or the savings book has clearly beaten shape. In the last 50 years (at the end of 1964 to the end of 2014) the average annual performance of the DAX or its predecessor, the stocks index of the Börsen-Zeitung, was 7.3 percent. Anyone who invests 10,000 euros in shares today could look forward to a deposit value of 10,730 euros in a year, if you use the historical return. At the end of the second year it would be 11,513 euros. After 40 years, the value would be 167,490 euros. Regular further acquisitions after the initial investment can further increase the deposit value. However, your own money should not only be invested in shares, but should be diversified over several forms of investment in order to minimize loss of loss.
2. Take out the most important insurance
Many Germans pay too much for their insurance cover or take out insurance companies that are not really needed. In contrast, important protection is often missing. However, certain insurance companies are of great importance when it comes to protecting themselves from financial losses or even financial ruin. Private liability insurance should be emphasized in particular. According to the law, everyone who causes a third party is obliged to pay damages. This applies to personal injury, property damage and financial loss in the private sector. In the worst case, high payment claims may apply in the event of an accident. Private liability insurance protects against the risk of impending lifelong payments. In addition to private liability insurance, household and occupational disability insurance can be considered important.
3. Invest in financial education
In school, financial education plays only a very subordinate role, if at all. Many parents also hold back in terms of financial tips or have no knowledge of asset structure, which they could convey to their children. At a young age, you should therefore start independently by making yourself financially, for example by reading financial books or corresponding blogs on the Internet.
4. Save and set goals
Many experts advise you to save at least ten percent of the monthly income or to regularly invest this share. Anyone who starts saving at an early stage can calmly look forward to large purchases that arise at later times. Examples include buying a house or car. One should clarify your financial goals in writing, develop a savings plan in this context and check your own expenses regularly. Financial goals can be formulated according to the so-called smart rule. This means that the goals should be specific, measurable, ambitious, realistic and scheduled.
5. Generate passive income
If you strive for financial independence, you should deal with the generation of passive income at an early stage. Passive income is income that results from a service in the past. A mostly high initial investment, for example in the form of time and effort, creates a sustainable source of income. One example is writing a book. While you have to spend a lot of time to write the book, the sale of the book can ensure a steady flow of money for several years.
Editor finance.net