Do you have an emergency fund (in Dutch) on your savings account that is large enough to cover any unforeseen expenses? Are you thinking about investing? Then of course you want to know all about the benefits of investing.
Investing means you have a chance that the money you invest will increase in value. Try to avoid selling investments during a stock market dip by investing for the longer term. This reduces the chance that you will lose (part of) your investment. You are in control: you determine the goal, the period and the risk.
Which goal do you want to achieve by building wealth? Perhaps you’re hoping to purchase a campervan or take a round-the-world trip, plan for your pension, or secure money for your child’s education. Whatever it is, having a clear goal makes it easier to set targets and determine the level of risk you are willing to take.
In how many years will you need the money? In the short term, for example 5 years, or in the longer term, for example 20 years? In general, the longer you leave your money, the greater the chance of returns.
Do you want to take little or a lot of risk with investing? ? Or rather something in between? In general, the more risk you take, the greater the chance of returns. However, the chance of incurring losses also increases.
Which goal do you want to achieve by building wealth? Perhaps you’re hoping to purchase a campervan or take a round-the-world trip, plan for your pension, or secure money for your child’s education. Whatever it is, having a clear goal makes it easier to set targets and determine the level of risk you are willing to take.
In how many years will you need the money? In the short term, for example 5 years, or in the longer term, for example 20 years? In general, the longer you leave your money, the greater the chance of returns.
Do you want to take little or a lot of risk with investing? ? Or rather something in between? In general, the more risk you take, the greater the chance of returns. However, the chance of incurring losses also increases.
The chart below shows the differences between the returns from savings and investments in the longer term. You can see what savings would have yielded if you had € 1,000 in your savings account on 1 January 2018. You can also see what investing in our profile funds would have yielded if you had invested €1,000 on 1 January 2018.
Source: ABN AMRO Investment Solutions, Morningstar Direct. Yields as at 30/12/2022, in euros and after deduction of fees. Net dividends reinvested (if applicable). Based on a geometrical calculation method. The value of your investments can vary. Past results are not indicative of future results.
The value of your investments can fluctuate. Keep in mind that you can lose (part of your) investment if you sell investments at a time when the value is below your (average) purchase value. Results achieved in the past offer no guarantee for the future.
You are never too young or too old to invest. Every age has its advantages when it comes to investing. If you are young, your money can pay off for years to come. When you become a little older, you often have more assets to invest. That is why the investment portfolio of a person in their thirties will look different from that of a person in their fifties.
Time works in favour of investing. The younger you start, the more time you have to let your money grow and reinvest it.
Shares and bonds are generally the main components of investing. For shares, there will be many high peaks and deep troughs in the short term. However, over the longer term, shares tend to deliver higher returns. By starting investing early, you can limit the risk of investing in shares.
The older you become, the wiser it is to reduce the risk. This can be done, for example, by including a larger proportion of bonds in your investment portfolio.
By investing in mixed funds, you buy several shares and/or bonds in one go. Depending on the fund, you also have an immediate spread over several continents. This automatically spreads the risk. This means you don’t have to follow the stock market or make buying and selling decisions every day, because a professional fund manager does that for you.
Investing involves risks. You could lose (some of) the money you invested. If you are going to invest, it is important that you are aware of this. Invest with money you can spare. Read more about the risks associated with investments.
