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Small-Scale Investments | Where To Put Our First Savings

Many people still have respect for the word investment. When they consider putting their money in a vehicle of this type, ignorance or fear of risk makes them give up.

There is a false belief that investment is something for the rich, and that to start growing our savings we must start from a high amount. However, now not everything consists of investing hundreds of thousands of euros, it can also be done on a small scale. Even with the small savings that we achieved with a lot of effort.

Over the years, the investment industry has democratized, allowing more people to join and have the option to grow their savings or earn a good pinch. Obviously, it carries risks, but as they say, “he who does not risk does not win”. Moreover, in the markets that is the mantra.

There are new forms of investment in which you can participate from small amounts, which are more accessible and allow you to put to work those small savings that many of us have without knowing what to do with them.

How can I invest a small amount?

You no longer need to be a millionaire to be able to invest. In fact, it is even more advantageous, because investing in small amounts spreads more risk. You can cope much better losing 1,000 euros than 100,000, for example, so, in fact, many people who have enough income are beginning to limit their investments to smaller amounts.

Before deciding where to put your money, you have to ask yourself what type of investor you want to be, or what risk you want to take. Because, depending on the profile of each one, more advisable instruments than others mark the form of investment.

We must ask ourselves internally if we consider that we have a more conservative profile, or on the contrary, a more risky one. Depending on this, we must allocate more or less weight to deposits, bonds (fixed income) or shares (variable income). Although it may sound strange, even for low risk profiles it is advisable to have some weight, even if it is little, in the stock market, that is, in the stock market.

If we are conservative, we must give greater prominence to products such as bank deposits, Treasury bills or short-term fixed income. The problem is that now the interest rates they offer are very low, even negative. That is why it is often better to wait for the situation to normalize, and take the leap once the returns on these lower-risk assets begin to rise.

For the riskiest part of the portfolio, we must opt ​​for products more linked to investment in the stock market or in fixed income. For small amounts, it is not advisable to buy shares directly, since the commissions are fixed and can take away a lot of profitability.

This is where products such as mutual funds or ETFs come into the picture. In case we want to start with small amounts, the ideal would be investment funds, which allow contributions from approximately 1,000 euros.