How can I benefit 20 a year
Invest 1,000 euros: six options for private investors
Valeria Nickel, November 6th, 2020
A salary bonus, a tax refund or any other occasion where you get big gifts of money - that you suddenly find yourself with € 1,000 in your hand is not so unlikely. At this moment the question arises: How do I invest € 1,000 as profitably and / or safely as possible?
The essentials in brief:
- Debt repayment: First, pay off existing debts and create a nest egg. Hardly any return is able to offset high interest rates!
- Savings fox variant: Save fixed interest with the help of savings accounts, overnight deposits and fixed-term deposits. You only get low interest rates, but your investment is relatively safe.
- Equity investment: If you buy stocks, you can benefit from dividends and price increases. Buying individual shares is not really worthwhile at an amount of € 1,000: If you buy shares in a single company, the risk diversification is not high enough. If you buy stocks of different companies, the high order fees will dwindle your returns.
- ETF: Especially with small investment amounts, ETFs are a sensible alternative to buying individual stocks. The passively managed funds are cheaper and the investment risks are spread.
- Crowdinvesting: Another and quite new option is crowd investing. With investment opportunities via BERGFÜRST, for example, investors invest in real estate from € 10 and benefit from fixed interest rates between 5.0% and 7.0% p.a. with short terms and trading options.
- And otherwise? Don't forget to treat yourself to something and invest in your own wellbeing!
1 | Debt settlement & nest egg
The first thought may have to exist Debt be valid. Before you can invest money, you have to be debt-free, because (overdraft) loan interest is expensive and normally cannot be matched by the return on your investment. Therefore, you should first wipe out all arrears with € 1,000.
Another preliminary question that arises with € 1,000 in hand is whether you already have the so-called "Nest egg" of 2-3 net monthly salaries aside. The best thing to do is to park this reserve on top of you Overnight money accountso that you can easily access it at any time in the event of unexpectedly high expenses - such as buying a new washing machine.
2 | Savings fox variant
If you don't want to take any risks and just want to save the money, you can invest your money in a savings book, overnight deposit or fixed-term deposit account. An interest-bearing overnight money account offers you maximum flexibility because you can withdraw money every day. With a fixed-term deposit account, however, you are committed: you tie up your capital for a predetermined period of time and receive a certain interest rate for it.
The interest rates here are measly - the comparatively highest interest rates are offered by the fixed-term deposit account - but the € 1,000 is safe. However, you do not achieve a return with this variant.
3 | Stock investment
If, on the other hand, you want to make profits and “let your money work for you”, you cannot avoid taking the risk of losses. Especially profitable but also risky are equity investments. But Attention: € 1,000 may be a lot of money - but in the investment world this is a crumb amount.
An investment in shares is only worthwhile from € 1,000, otherwise the Cost per order are too high. The order is, so to speak, the purchase of a share. There are fixed transaction costs and fees. The exact costs can be found in the price / service list of the respective bank. In percentage terms, these costs are lower the more money is invested.
If you buy a share worth $ 1,000 or more, it has to generate less return to make up for the costs.
|Share purchase worth:||500 €|
|Fees of:||15 €|
|Fee portion:||3 %|
|The stock needs to rise 3% just to make up for the fees.|
|Share purchase worth:||1.000 €|
|Fees of:||15 €|
|Fee portion:||1,5 %|
|The stock needs to rise 1.5% just to make up for the fees.|
|Share purchase worth:||3.000 €|
|Fees of:||15 €|
|Fee portion:||0,5 %|
|The stock needs to rise 0.5% just to make up for the fees.|
You can also use € 1,000 only invest in one stock. The problem with that is then no risk diversification takes place. If one share falls, the entire investment falls. This is not recommended. That's why you should pay € 1,000 Not invest in individual stocks.
4 | ETFs as an alternative
Still lower costs Exchange traded funds, so-called ETFs, are used as equity funds. They are not actively managed by a fund manager, but rather replicate a stock index such as the DAX. Because there are no management fees for the fund manager, the return increases automatically. Here you are not actively trying to beat the market, but following the profits of the market itself with your investments. This is often more promising than relying on the success of a fund manager.
5 | Equity crowdfunding
Those who prefer to take their financial investments into their own hands and value high returns have recently had one new option: crowdinvesting. Many private investors come together via an internet platform and invest together in large projects.
In contrast to donation-based crowdfunding, crowdinvesting has potential for returns for donors.
This already works with small amounts and without incurring any fees. The investment sum of € 1,000 is ideal for this. Real estate crowd investing is currently enjoying growing popularity. Here many investors invest together in large real estate projects and receive high interest rates of, for example, 7.0% per year.
Discover real estate crowdinvesting projects
6 | What else can you do with € 1,000
When considering how to save or increase € 1,000, you shouldn't forget to treat yourself to something: a vacation, shopping trip, a massage or an expensive concert - you can also add a little of the € 1,000 to your own Wellbeing invest. Another option is to get some of the money donate. A little balm for the soul or something good for the public are also good investments. But of course that is up to you.
Image Copyright: igorstevanovic / Shutterstock.com
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