It doesn’t matter whether it’s 10,000, 50,000 or 100,000 euros – who wouldn’t like to have a little money in their account? Without an inheritance or top earnings, the only way to get there is through saving. What helps – a signpost.
1. How mental blocks make it difficult to start
If you want to increase your money, you should bring time and patience. However, people generally find it difficult to make decisions that are effective in the long term. For investments, this means that savers also strive for quick profits, immediate benefits. On the other hand, decisions for the future, such as building up assets for old age, are being pushed back, after all, retirement is still a long way off. Anyone who is aware of this problem will find it easier to get started at all.
2. Why it is good to formulate your goals clearly
If you want to invest money, you should have a clear goal. “I want to have 100,000 euros in my account” or generally “save for retirement” is not very motivating. On the contrary: Such oversized and/or vague plans can trigger worries or a feeling of resignation (“I’ll never make it!”). The Stiftung Warentest therefore advises filling abstract numbers with life, i.e. naming the goal as specifically as possible, imagining what it could look like, whether it’s about the new fitted kitchen, the trip around the world or the additional pension. This also includes setting a point in time when you want to stop saving. This helps to stay true to your own goals, even if you don’t yet know exactly when the new kitchen will be installed or when the world trip or retirement will begin. “You can always implement your dream later, but scheduling helps to get started at all,” advises Nikolaus Braun, honorary consultant in Munich.
3. How a checkout helps
The certainty that there is always something left over at the end of the month is good, but not enough. Stiftung Warentest recommends getting a realistic overview of your own income and expenses. Only then is it clear how much money is really left to save each month. A household book helps, whether on paper, as an Excel spreadsheet or app. Regular income including extras such as child or parental allowance and all expenses are entered there, from A for subscriptions to Z for additional insurance. One should not forget the expenses that are due quarterly or once a year, such as the radio license fee or vehicle tax. These amounts should be divided accordingly so that they are taken into account in the monthly balance sheet. Anyone who keeps a household book in this way for three months will get a good feeling for how much money there is to save.
4. Why the date is important for the standing order
If you put money into a savings account by standing order month after month, you don’t have to overcome your weaker self every time. It is best to schedule the standing order so that the savings rate is debited when the salary has just landed on the checking account. “What’s gone can no longer be spent. And when the account is full, the debit is less perceived as a loss,” says money expert Braun.
5. Why it doesn’t work without a reserve
If not already available, savers should first invest money for an emergency reserve separately from the checking account in a call money account. The money is available there every day. You hardly get any interest there at the moment, but according to the consumer portal there is biallo.de there are still enough providers who at least do not charge negative interest. As a rough rule of thumb, Braun considers two to three net salaries to be sufficient as an emergency reserve. Then there will be enough money when a major car repair has to be paid for or a new washing machine is due. The call money account is currently also generally suitable for saving small amounts, for example if a low-income woman wants to buy a new television in a year and snips 50 euros a month from her monthly budget for a year, until there is enough for a 600-euro device is together.
6. What makes investing different from speculating
Many investors also stay away from the stock market for fear of losses. Without shares, however, it is currently practically impossible to achieve acceptable returns with the money: bonds or savings certificates, savings accounts or fixed-term deposits yield hardly any interest, if at all. However, the stock market can be a dangerous place, at least for those who constantly buy and sell individual stocks, speculating in the hope of making quick, big gains. The opposite of this is long-term, internationally diversified investing. The exchange-traded funds (ETF) are particularly suitable for this, funds that track the price development of certain stock market indices, for example the world index MSCI World. This contains a basket of around 1,600 stocks from 23 industrialized countries. Anyone who invests 100 euros in this index via an ETF would, for example, have a few euros in Apple and a few cents in SAP. The idea behind it: If you spread your money over hundreds of different companies, you lower your risk. Because while some companies are going through a crisis, others are celebrating success. Anyone who acted like this and stuck it out for two or three decades achieved average annual returns of around eight percent with an investment in the MSCI World index, even if prices fell sharply in between, as was the case recently after the Russian invasion of Ukraine.
7. Which basic rules have to be observed
Investors should only invest money regularly in the stock market if they meet three requirements. Firstly, you have time. Stiftung Warentest advises only investing money in equity funds that “you can do without in the long term. Calculate with an investment period of at least ten to 20 years”. The money can be for the children’s studies, for example, for a big trip that you might want to take as a pensioner, or for additional retirement provisions. Secondly: “You don’t need the money at a specific point in time, you are flexible enough that you can wait two or three years if the share prices have fallen sharply at the time you originally wanted,” says Braun. Thirdly, investors must not allow themselves to be misled by interim losses. “If your investments are widely spread, you can wait in peace for better times,” recommends the Stiftung Warentest. Braun also advises paying attention to the running costs. For funds where fund managers actively select the stocks, these are often 1.5 to 2 percent per year. This has a significant impact on returns. With passive stock ETFs, the annual costs are almost always less than 0.5 percent. And they are cheaper to buy.
8. How to integrate a security module
A slipper stands for the following properties: simple, comfortable, cheap. Based on this, the Stiftung Warentest has been recommending investors to set up one for years Slipper Portfolios. It consists of two components: high-yield ETFs that track a world index such as the MSCI World, and secure overnight and fixed-term deposits. Depending on the type of risk and the time available to save, you can choose between different variants. Example: If you invest 50 percent in equity ETFs and 50 percent in interest rate investments, you have chosen a balanced option. If share prices now temporarily collapse by 20 percent, the value of the investment only loses ten percent. And that would only be a real loss if you sold the ETFs and didn’t sit out the weak stock market phase.
9. Why the time factor should not be underestimated
Many investors ponder about the right timing. They wonder when is a good time to get into the stock market. But that doesn’t matter in the long term – it’s better to start right away to take advantage of the compound interest effect. Example: A 30-year-old wants to save 10,000 euros. She invests EUR 200 a month in a stock ETF. She opts for an ETF in which the dividends, i.e. the regular profit distributions of the company, are automatically reinvested. These ETFs can be recognized by the abbreviation “acc” for accumulating, sometimes they are also called “accumulating”. The ETF has an annual return of three percent. With these three percent per year, she has the 10,000 euros together in four years. In order to get 50,000 euros together, it doesn’t take her five times as long, i.e. almost 20 years, but 16 years and three months. And for 100,000 euros, it doesn’t take 32 years, but a good 27 years. If you start early, you can benefit even more from the compound interest effect. Money grows faster because any income is reinvested and generates additional income, which in turn increases savings.
10. What it takes to get started with ETFs
Anyone who concludes a savings plan needs a securities account in which the ETF shares are kept. This is usually free of charge with direct banks and online brokers. Once the depot has been opened, two steps are still missing: set up a standing order from the current account to the depot bank’s clearing account – and then conclude an ETF savings plan there. For example, the Product finder from Stiftung Warentest (test.de).