Many beginners overestimate the amount of money they need to invest in securities. Buying shares does not have to be expensive!
100,000 or 1,000 Euros?
It is true that an investment of 100,000 euros can be used to build up a particularly diverse and well-secured portfolio right from the start. But also with an amount of 3,000 euros or 1,000 euros one can already enter. With small amounts of this order of magnitude a concentration on two to three enterprises offers itself. Due to the resulting lack of diversification, the inherent risks are higher, but at least a foundation is laid on which the portfolio can be expanded step by step. For a somewhat broader diversification and reduction of risk, however, an amount of 5,000 – 15,000 euros should ideally be invested at the start.
Under no circumstances should a loan be taken out to finance a portfolio. If there is no free budget for securities investment after deducting monthly expenses, there are only two options. Firstly, the start date of the investment can be postponed. Set a realistic date for this. Provided that a higher income is foreseeably available on the cut-off date, this is a good solution. The other option is to reduce current costs and use them to generate the volatile capital needed for the investment.
Income that is used to build up wealth with shares is no longer available for everyday consumption, vacations, cars or paying taxes and operating costs. In order to maintain an overview and to ensure that long-term wealth accumulation does not backfire, all expenses should be budgeted and recorded. This can be done in the old-fashioned way using a budget book. The financial software used for online banking also often allows convenient budget management.
To achieve the investment goal, a call money account should be set up that is used exclusively for investing in stocks. A certain percentage of disposable income should be transferred to this account on a regular basis. The money parked in this account should be used exclusively for long-term wealth accumulation and the purchase of stocks.