Instead of putting your €500 under your pillow because it doesn't pay much in the long run, why not invest it? There are profitable savings products, profitable investments to invest your money and make it grow.
Stock market investments, real estate, life insurance, the choice is yours. In this guide, Birdee helps you invest €500 wisely. Spoiler alert: the best investments are not only made at the bank!
FIRST, WHAT IS YOUR INVESTMENT PROFILE?
To prepare for your retirement, to obtain additional income, to buy your primary or secondary residence, to build up a property portfolio... why do you want to invest? Do you want to save or invest? What are your long-term objectives? And what is your risk tolerance? Do you know the world of finance and are you comfortable with taxation? Are you independent when it comes to investing? Do you want to invest responsibly? Is it 500 euros to invest every month or a one-off sum?
All these questions can be daunting, but they are necessary. With them, define your investment project and choose the best products for your profile (passive or active investment)!
WHAT ARE THE OPTIONS FOR INVESTING 500 EUROS?
Mutual funds (FCP)
Mutual funds allow you to pool the money of several investors to build up a portfolio of financial assets, such as shares, bonds or property. They are professionally managed and are often considered a low-risk investment option for first-time investors. Mutual funds are not common in Belgium where the most common legal form is the SICAV.
Buying shares and investing in the stock market
Buying shares allows you to become an owner of a part of a company listed on the stock exchange. The stock market is an attractive option for long-term investors looking to benefit from the growth of the company, but it also carries risks.
Shares fluctuate according to the economy and the performance of the company. While the return can be high, there is also the risk of losing capital and money invested. You also have to think about the costs of investing and the knowledge needed!
It also takes time: share prices need to be monitored! Fortunately, digital technology and algorithms are there to help you.
Savings products (account, passbook, plan, life insurance)
Savings products are a simple and secure way of putting money aside as you go along, and making it grow over the long term thanks to the interest earned. In France and Belgium, interest rates on savings accounts are generally low. It is a long-term investment! This means that you will have to wait a while before you see a significant increase in your money.
Be aware that the conditions for using your savings differ: in France, while you have to wait until retirement for the PER (Plan Epargne Retraite), life insurance offers more flexible withdrawals.
Don't forget to compare the tax system too! In Belgium, the term account (or deposit) blocks the money invested for a certain period! So it is not ideal if you need to withdraw cash quickly.
Real estate investment SCPI (France)
An SCPI is a real estate investment company. SCPIs raise money from their investors to buy, manage and rent out buildings. Investing in an SCPI means buying shares in the company, which allows you to own part of your property portfolio. It is a simple and accessible way of investing in property without having to manage a property directly.
SCPIs have a diversified asset base, which reduces the risk of loss in the event of problems with a single property. They are managed by professionals, which allows you to benefit from their expertise in property management. The income generated by the investment in SCPIs is received on a regular basis in the form of an annuity. SCPIs offer a measured risk and an attractive return.
If you have €500 in your pocket, why not invest in Bitcoin or other crypto-currencies? These can fluctuate significantly in a very short period of time, and therefore offer an excellent short to medium term return, a real source of profit for investors who manage to anticipate market movements. However, because of their volatility, crypto-currencies also present a risk of heavy losses to consider when choosing your investment.
Beware of scams with cryptocurrency platforms! Before investing your money, check out the organisation in question. The Autorité des marchés financiers (AMF) offers advice on how to invest in cryptocurrencies and choose your intermediary in France. The institution also provides the PSAN white list of approved trustworthy providers.
Crowdfunding is an alternative investment method that allows an individual or company to raise funds from a large number of investors or contributors via the Internet. There are several models of crowdfunding, including donation, loan (crowdlending) and equity-based crowdfunding. It is also an excellent way to support businesses, innovation in France or Belgium, and projects that are close to your heart!
Using a Fintech to invest your euros
To put it simply, a Fintech is a company which, like Birdee, innovates in the financial sector by offering simple solutions accessible to all. You can entrust your 500 euros to experts who will invest your money in different financial assets according to your investor profile and their level of return.
Do you only have 50 euros to invest? No problem, it's possible! Discover the interesting savings products and investments that will make your capital grow with Birdee: