Investing 50000 euros is a real journey and you need to prepare yourself before starting. What do people do before they travel?
First, they need to know where to go. Then, decide what to see once you arrive and finally, how long the trip will take.
In the world of train investment today the situation is similar. You need to know what investment methods you can choose from, how much money you want to earn and what your goals are (long or short term).
This is why investing is a bit like traveling: an investment must be planned.
What are your financial goals?
Establishing your financial goals is one of the most important steps to find out how to invest 50000 euros.
Do you have a goal? How long do you want to reach it? Your goal could be a new car or a first home purchase. According to the investment term (period), there are long, medium and short term goals.
Each of them differs from the other in time and risk. Would you like to invest advice today? Then keep reading!
Before starting to invest 50000 euros, it is necessary to know all the steps that involve an investment, to obtain good results.
Knowing the world of investing will help you develop a better financial future. Investing is a mix of science and art (qualitative factors).
Choose the investment that best suits your needs, your skills and your personal (or the whole family's) needs. Investing is not easy, but if you understand how, you can enter into investments that will be functional for you.
Be guided by an expert
If you've never invested money in your life and don't know how to invest today your 50 thousand euros, you could start by hiring an expert consultant.
Also, make sure you choose a professional who doesn't conflict with your interests. Moreover, the biggest enemies of investors can be: emotions, wrong strategies and the desire to get everything right now.
Never make a decision unless it has been perfectly integrated into your investment strategy beforehand, be it short or long term.
If you don't want to rack up profits right away, a financial advisor might advise you to invest in bonds today because they offer less risk, but also less profits and the returns are only effective over the long term.
Where to invest your money today for immediate results? A financial advisor might suggest that you do this in securities or in a diversified basket of securities. Or, to trade stocks.
What is the key to success?
Being patient is certainly one of the keys to success. Successful investors are those who enrich their knowledge over the years.
If you already know about things to invest today, for example the stock market, then you should learn basic terms and strategies, so that they provide you with the best tools to make the right decisions.
Learn the terms related to finance and the differences between ETFs, securities, bonds, mutual funds and certificates of deposit (CD).
If you know someone who manages to invest 50000 euros effectively or has already done so in the past, get some advice. It is never too late to learn and a good teacher can always come in handy.
You can also use and learn financial information in the various investing forums today that are available online and are full of useful content you may need.
How much do you want to invest?
You have 50000 euros to invest, but you are sure you can invest the full amount. Don't need a backup in case of need? Deciding how much you want to invest is very important.
You don't have to invest all your savings to get started, thankfully. Remember that in the future, maybe even in a few months, you may find yourself having to pay some debt that you were not aware of. Would you be able to do it, even if you have 50000 euros to invest?
Of course, the more money you invest the more chances you will have of making more profits.
Fees are like taxes and if you don't check them properly, they'll act like a bunch of termites in grandma's old dresser, destroying everything in their path.
If you don't take into account the fees, in the long run you can't imagine how much money you could lose along the way. An actively managed mutual fund often has management costs of 1%.
This means that each year the fund dedicates 1% of all proceeds to paying small and devious commissions.
Of course, 1-2% may seem like a small and insignificant percentage. However, it has been shown that it could cut profits by about half in 24-25 years.
How to invest 50000 euros without risk
Generally there are two investment possibilities available when you have such a large amount of money to invest: the first and without a doubt the safest, is to entrust your money to a guaranteed system. In this way, it is completely impossible or almost impossible to lose money.
Of course, when financial choices are so protected, safe and risk-free, they also offer less profits. However, if you don't want to put any effort into finding a profitable investment and don't want to be bothered by it, this may be the solution that best suits your needs.
Basically, if the sum of 50 thousand euros derives from big sacrifices and you don't want to give it up for any reason in the world, then this solution can also be fine. Over time you will be able to consolidate your assets, defending yourself from inflation, without ever running the risk of losing it.
The second option, on the other hand, concerns the possibility of investing 50000 euros in riskier securities. Obviously, the risk margin is higher here, but if things go right, you could get a much higher profit than what you get by investing in a guaranteed capital.
In this sense, the first piece of advice we can give you is not to invest 50000 euros in a single title / project. Subdivision or rather diversification in the financial sector is the real key to success.
Invest 50000 euros in something you understand
If you don't know and you can't explain to someone else what you want to invest 5000 euros in, you shouldn't do it.
A good investor should know all the information related to the investment process, its pros and cons, the risks and benefits.
For this reason, before deciding where to invest 50000 euros, you should know your level of risk tolerance. Are you a person who likes to take risks? Do you like fast cars and adventures or stay at home and watch TV?
Risk tolerance depends on age, character, income and financial goals. Risk tolerance varies from person to person.
This is a distinctive feature for each person. That is why investors, based on their risk tolerance, are divided into prudent, moderately conservative, moderately aggressive and aggressive investors.
Risk tolerance is a very important component of investing. You need to know your skills and your goals because if you take too much risk, you could panic and invest 50000 euros the wrong way.
The best way to decrease the risk? Diversify
Diversification is a technique that mixes a wide range of investments within a portfolio.
Diversification can be very useful when you have to invest 50000 euros. Because? Because the main objective of diversification reduces risks by investing in various financial assets.
Diversification could give you more money. If you have 50000 euros and you don't know exactly what are the best ways to invest it, use diversification.
There is a rule that says: "Don't put all your eggs in one basket". If the basket falls, all the eggs will break.
If your eggs are in different baskets, however, if one of these falls, all the others would be safe. Does the analogy happen?