There is no age limit to investing! The earlier you start, the better! Because yes, building your assets takes time, so you might as well start as soon as you can. Then, even if you might think that investing is only for the richest (and oldest!), it is quite possible to invest when you have a small budget and are young.
So if you are afraid to invest because you are a student, if your financial assets are limited, if you don't want to spend time at the bank... Birdee presents you with some ways to invest your money and make it grow.
What to invest in when you are still studying? What investments are possible when you don't have much money? Here are our tips for getting started!
How to invest money as a student?
Même si on pourrait croire que l’investissement est réservé uniquement aux plus riches, il est tout à fait possible d’investir avec un petit budget. Alors si vous avez peur d’investir car vous êtes étudiant, si votre patrimoine financier est limité, si vous n’avez pas envie de passer du temps avec un conseiller bancaire… Birdee vous présente quelques pistes pour commencer à investir, dès 50 euros.
Although it may seem that investing is only for the rich, it is possible to invest on a small budget. So if you are afraid to invest because you are a student, if your financial assets are limited, if you don't want to spend time with a bank advisor... Birdee presents you with a few ways to start investing, starting at 50 euros.
STUDENTS, PREPARE THE GROUND TO INVEST IN THE RIGHT WAY
Define your investment project and your investor profile
- Before embarking on any investment, you need to ask yourself the right questions to determine what you want from your investments in order to choose the right vehicles. This is also the time to define your investor profile.
- What is the main objective of your investments? A future property project? Buying your first home? Financing a longer-than-expected education? Starting your own business after your studies? Preparing for your retirement? Putting money aside and making your capital grow so that you don't spend it? Have additional income?
- Do you want the money to be directly available in an account to be used when needed?
- In the short, medium or long term, how long do you want to invest?
What is your state of mind regarding risk? Saving or investing, that is the question !
Determine the budget allocated to your investments
Then define how much money you can put aside each month. Start by listing your current expenses and income in a table. This will give you a realistic and quantified picture of your ability to save or invest per month.
Here's a googlesheet you can download: it's a budget management chart that will help you see things more clearly! It's a great way to get started with personal finance management:
Adapt your goals to your situation and what you can save. Don't bite off more than you can chew and don't put yourself in a complicated financial situation. You need to be able to live and also enjoy yourself!
To do this, deduct all your expenses (rent, bills, shopping, subscriptions, outings, etc.) from your income (small job, pocket money, grants, etc.). What is left over can be divided between savings and investment. Another solution is to invest only the money you receive on birthdays or at Christmas, for example. You don't have to have a large sum of money to invest; a few dozen euros can make a difference in the long term.
Finally, don't forget that a successful investment strategy requires a high degree of diversification to limit risk. This is why Birdee offers portfolios that are already diversified, even with small amounts.
The success of the investment also depends on its regularity, so make monthly payments. This also reduces the risk and allows you to benefit from the snowball effect (interest generates interest).
Investing as a student is :
- a way to start building good habits,
- a way to start a positive dynamic for the future,
- a way to put money towards projects that matter (real estate, retirement, starting a business, etc.),
- more profitable than putting your money under your pillow, especially in times of inflation!
Let's see what investments are available to you.
WHAT TO INVEST IN AS A STUDENT?
Risk-free savings vehicles for young people... but with low returns
The first thing to do is undoubtedly to build up a small precautionary savings account (the equivalent of one to three months' life), which is immediately available to deal with everyday problems (a computer breakdown, an unexpected repair to your car, extended studies, etc.).
For this, traditional bank passbooks (PER, Livret A, etc.) or savings accounts dedicated to young people are the best solution. But be careful, this investment must be limited to this reserve use, because the remuneration offered is very low and even makes you lose money when inflation is higher than the interest rate.
🥳 In the good news of 2023, the interest rate of several savings books has increased! This is the case for the livret A which has increased to 3% from 1 February, the livret jeune (3%) or the livret d'épargne populaire LEP (6.1%). The latter is very profitable, but accessible under certain conditions.
But there is not only the Livret A, other solutions exist when you are young!
More dynamic investments when you are a student
Granted, its name is rather scary and is too often associated with the 💀. Let's correct the misunderstanding! Life insurance is a long-term investment that offers you the possibility to withdraw money whenever you want, and during your lifetime. Beware: this does not mean that it is always advantageous at the time, but it is reassuring to know that the money is available and that you can withdraw it if you need it! The return is more interesting than on savings books. You can choose your profile: dynamic, balanced, moderate.
Opening a life insurance policy when you are young means "taking a date", because after 8 years of age, the policy allows you to benefit from very advantageous taxation on withdrawals.
Some contracts, such as Birdee's, not only allow you to set your 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 blocked and you can withdraw it at any time.
Securities account and stock market investment
For an even more dynamic financial investment, the securities account allows you to invest in the financial markets. The problem? When you don't know anything about the markets, it's difficult to select the right shares or bonds to put in your portfolio.
That's why, if you don't know which stocks to buy, Birdee suggests, for example, investing in ETF funds, which replicate the performance of a stock market index (such as the CAC40). ETFs have the advantage of being cheap and liquid, so they can be sold easily. And with Birdee, the securities account is available from as little as €50, perfect when you start investing with little money!
The young or classic PEA
If you want to invest in the stock market and have an appetite for financial markets, there is also the PEA (Plan d'Épargne Actions) and the PEA jeune. Reserved for young people aged between 18 and 25 who are attached to their parents' tax household, it is then transformed into a classic PEA. With a ceiling of €20,000 in 2023, it is tax-efficient and accessible to small budgets.
The advantage of the young PEA is that you can entrust the management of your stock portfolio to an expert. This limits the risks!
Crowdfunding can take many forms: loans to SMEs, buying shares in start-ups, real estate programmes, renewable energy projects, etc. If investing in the capital of a start-up is very risky and involves waiting several years, look into real estate crowdfunding or crowdlending (loans to businesses): you can invest small amounts (from €20, depending on the platform) over a relatively short period of 18 or 24 months, with returns between 5% and 12%. Moreover, as the entry ticket is low, you can diversify by selecting several operations.
SCPIs (real estate investment companies)
I might as well tell you about it now, even though investing in SCPIs requires a larger starting amount than some other financial products. The minimum amount to invest in an SCPI depends and easily escalates. With an SCPI, you receive property income at a rate defined by the contract. Investing in real estate is a relatively safe and profitable investment.
If you want to put money aside for a property project, think about the PEL (housing savings plan). This allows you to obtain a bank loan at an advantageous rate.
STUDENTS: DON'T WAIT UNTIL YOU GET OLDER TO INVEST!
For investments with higher returns than traditional passbook accounts, you have to accept a minimum of risk. But whatever your investment choices, invest only after you have created a small precautionary savings.
The golden rule: diversify your investments across several types of savings and investment products to avoid losing everything.
To help you do this, Birdee allows you to boost your investments in a quick and easy way: online registration in 10 minutes (no paperwork, no blabla), choice of thematic and responsible investment portfolios, fixed 1% annual fee (and nothing else!), and all this from only €50 invested. Don't wait any longer to get started!