Where to invest? A tip

Where to invest? A tip

Interesting tips on where to allocate money saved through an accumulation plan

Where to invest? A tip

More often than not, we might be able to save a consistent amount of money, not knowing how to optimize it and – most significantly – where to invest it. The last point is crucial, now more than ever – inflation level considered.

In order to enter financial markets, it is not necessary to have the attitudes of “a Wall Street shark”. One just needs to be far-sighted and practical.

In the book One Million for my Daughter there are interesting tips on where to allocate money saved through an accumulation plan, the objective being very clearly stated in the title.

As the author remarkably affirms, the path towards the million is akin to a marathon, rather than a hundred-meter race. The best assets are, thus, the most resilient athletes, not the ones with the most explosive sprint.

To put it in other words, it is best to choose those financial instruments that will be more likely resilient in the face of the changes that we will witness in the next 10, 20 or 30 years.

Typically, those who have little knowledge of the markets and a low appetite for risk tend to buy financial instruments that, in exchange for low risk, offer rather low returns, such as bonds and liquidity funds.

TANSTAAFL

Perhaps, it is better to remind oneself of the acronym TANSTAAFL, which stands for “there ain’t no such thing as a free lunch,” or “there are no free profits”, TANFP, which may be easier to memorize. What does it mean in our case? It means that with a high expected return, you have to be prepared to risk a significant loss of your capital; conversely, if you are happy with a low return, the chances of losing money are drastically reduced. Basically, if someone offers you a deal in which you risk zero, but you are told you will earn a lot, you are almost certainly dealing with a scam.

Where to invest, then?

The answer is: stock. But how? To find out more please visit www.onemillionformydaughter.com