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  • Investing yourself or having someone else invest? – READ THIS before you start!
  • Investing yourself or having someone else invest? – READ THIS before you start!

Investing yourself or having someone else invest? – READ THIS before you start!

Are you going to invest yourself or will you have someone invest for you?

It could well be that we will soon have to pay the bank when we put savings in the savings account. This is due to the negative interest that some banks will (or already) charge. It is no longer always advantageous to save and that is why more and more Dutch people are starting to invest money . Are you also considering investing? Then you have to decide whether you are going to do this yourself or have it done.

To help you make this choice, we will look at the pros and cons of both options in this article. This will help you find out what investing yourself and managed investing are and whether which is attractive to you.

Self-investing: how and what?

When you invest yourself, you get access to the stock market via a  broker . This broker has software that you use for investing.  With this software, you choose the shares, options, bonds and other possible effects that you find interesting. The broker then buys what you have chosen. You can also participate in an investment fund. It is important to understand that you make your own choices and also completely at your own risk. The broker does not give you advice, but only gives you the opportunity to execute the orders. Within the investment world, this is called ‘execution only’. However, you do not have to do it all alone. Many brokers offer online help with videos and sometimes even entire training courses.

Self-investing: the benefits

Investing is becoming easier for consumers because more and more is done online. For example, an incredible amount of information can be found online and you can now very easily open an investment account yourself. In addition, the platforms on which you invest have become very user-friendly over the years. In short, investing yourself has become quite easy.

In addition, investing yourself is cheap, because you do not have to pay any costs for advice or other kind of help. Many people also like to be in control and make their own decisions. Finally, you can now start with very low amounts, there is no high minimum deposit required. This way you can first get a feel for it before you start working with large amounts. 

Self-investing: the disadvantages

However, there are of course also some disadvantages to investing yourself. Despite the fact that there is a lot of information available online, you still need financial knowledge to invest well. If you do not have this knowledge yet, it will take you the necessary time to gain the knowledge. If you do not have this time or do not want to invest in it, then having someone invest can be a possible alternative. Are you willing to gain more knowledge about investing? Then take a look at  our extensive investment knowledge base ! 

Managed investing: how and what?

Investing can be done by hiring an asset manager or by managed investing. Hiring an asset manager often requires a large capital and the necessary costs. In this case, it is better to start with managed investing. Managed investing is increasingly offered, for example by ING or Rabobank. But what exactly is it?

Managed investing can be seen as a collective version of asset management. You do not have one personal manager, but you do have your own account and portfolio. The manager implements changes for everyone who has the same risk profile. You only have to determine how much money you invest and how high the risk you want to take may be. Based on that, you become part of a group for which investments are made. 

Managed investing: the benefits

The fact that you do not have to look at or around your investments makes managed investing attractive. In this way, you actually have as little work as managing the money in a savings account, but you do have a chance of returns from the stock market. The risks are also smaller because you are not investing alone, but are part of a larger group. In this way, the risks are spread and therefore lower.

Managed investing: the disadvantages

However, there is also a disadvantage to managed investing. It costs more money than if you do it yourself. The costs are relatively high, especially if you only invest a small amount of money. If you invest large amounts and can therefore also make more profit, the costs are relatively lower. Partly for this reason, most managers set a minimum deposit. If you do not want to invest too much, this may be a reason for you not to start managed investing.

4 differences between self-managed and managed investing

Although you have now had a brief introduction to the pros and cons of investing yourself and having someone else invest, you may still not know what you should choose. To help you a little further, we will discuss the most important differences.

The four main differences:

Invest your own money

  • You are the boss, so you decide what you invest in
  • You are responsible for the profit you make
  • You are responsible for the costs you incur
  • Investing yourself takes time
  • Knowledge and interest are required

Investing your money

  • A professional invests for you
  • A greater chance of (stable) profit
  • You pay fixed costs depending on your deposit
  • You hardly have to spend any time investing
  • Little knowledge or interest required

1. Differences between profit and risk

Often a reason to start investing  is the return you can get : you want to earn money with money. Can you earn more money with one of the two options, or lose more money?

In the case of managed investing, professionals will work for you. These people know what they are doing, but they will largely rely on the risk you want to take. If you tell them you want more risk, they will do that and you will either earn more money or unfortunately lose more.

You can also get started yourself and then you are dependent on your own knowledge. You will look at how you want to distribute your risks. If you do a lot of research you can earn a lot, but if you throw your hat at it, the chance of loss increases. In both forms the risks and the return can differ.

2. The differences in costs

Who wants to make a good return will always want to reduce the costs. Investing yourself is usually cheaper than having someone invest. However, your time is of course also money. If you invest yourself, this will cost you more time. You will have to pay for yourself between the difference in costs and the time.

3. How much time do both options take?

This is where the biggest difference between the two options lies. If you invest yourself, it will cost you more time. First, you will have to get to know the financial world well, and then you will have to invest time in keeping up with the markets and the news. If you let someone invest for you, you only have to invest a few times a year to determine your stake and risks. Many people like to keep an eye on the market and investments. Interest therefore also plays a major role in this.

4. How much knowledge is required for both options?

Here too, there is a clear difference. If you are going to invest yourself, you will need to acquire some knowledge about how the markets work and how the markets are doing. However, if you let someone invest for you, you also need knowledge. Not that much, but you still need to know something to be able to determine your risks.

Conclusion

You will have to draw up a balance for yourself about the stated differences. Determine the value of your time and see how much you already know. Based on that, you can determine what will be best for you: investing yourself or having your money invested. If you plan to start investing yourself,  determine which broker suits you best!

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