Although you may think that investment is something just for the wealthy, there are many options to invest on a small budget. So if you are hesitant about investing because you are a student, your financial assets are limited or you don't feel like spending time with a financial advisor... Birdee is pleased to share a few investment ideas available from as little as EUR 50.
First, set a course
Before you start investing, you need to ask yourself the right questions to figure out what you want from your investments and choose the right options. What is your main goal? Why do you want to make your money grow? What are your plans? How long can you invest? How risk averse are you?
Then, tailor your goals to your circumstances and how much you can save. To do this, take you income (student job, allowance, scholarship, grant, etc.) and deduct all your expenses (rent, bills, groceries, leisure, etc.). You can divide what's left between savings and investment. Another option is to invest only the money you receive for birthdays or Christmas, for example. You don't necessarily need a large sum to invest money, forty or fifty euros can make all the difference in the long run.
Finally, don't forget that a successful investment strategy requires strong diversification to limit risk. This is why Birdee offers pre-diversified portfolios, even on a small budget.
Investing while you are still a student is a way to build up good habits and momentum for the future. Now let's look at the investment options open to you.
Find the right investments for you
Risk-free savings vehicles... but with a low return.
The first step is always to build up a savings buffer (the equivalent of one to three months worth of expenses) to cover anything that might go wrong (your computer breaking down or an unexpected repair on your car, etc.). Here, traditional savings books or savings accounts for young people are the best solution. But beware, this sort of investment should be limited to just your buffer because the returns available are very low. You may even lose money if inflation is higher than the interest rate.
More dynamic investments
# Multi-vehicle life insurance
Opening a life insurance policy early on means "setting a date", because after eight years, the policy offers very advantageous tax breaks on withdrawals. Some contracts, such as Birdee's, not only allow you to set your own risk level, but also to choose the themes in which to invest (sustainable and responsible products, real estate, biotechnology, etc.). Another advantage is that your money is not locked in, allowing you to make withdrawals at any time.
Crowdfunding can take many forms: loans to SMEs, shares in start-ups, real estate programmes, renewable energy projects, etc. If investing capital in a start-up sounds too risky and would force you to wait too long, consider real estate crowdfunding or crowdlending (to companies): you can invest small amounts (starting from just €20, depending on the platform) over a relatively short period of 18 or 24 months, with returns of between 5% and 12%. Moreover, the small buy-in allows you to diversify by combining several operations.
# Securities account and stock exchange
Finally, for an even more dynamic financial investment you can invest in the financial markets with a securities account. Where's the catch? It's hard to know the right stocks or bonds to pick for your portfolio if you don't know much about the markets. This is why, if you aren't sure which securities to buy, Birdee offers ETF funds which mirror the performance of a stock exchange index (such as the CAC40). The advantage of ETFs is that they are inexpensive and liquid making them easy to resell. And with Birdee, securities accounts are available from just €50, perfect to start investing on a budget!
In conclusion, dare to take risks... tailored to you
For investments with a higher return than traditional savings accounts you must accept that a minimum amount of risk is involved. But whatever your investment choices, invest only after you've set aside a small savings buffer and diversify your investments across several types of products to avoid extensive losses. To help you do this, with Birdee you can boost your investments in a simple and quick way: online registration in 15 minutes, choice of thematic and responsible investment portfolios, fixed fees of 1% maximum (and nothing else!), and all this for an investment of just € 50 minimum. Don't wait any longer to put your money to work!