Investing yourself, what do you need to know? – TIPS & TRICKS

Investing yourself

Saving hardly yields any money these days, which is why investing has become increasingly popular. Investing can be done in many different ways and is therefore suitable for both experts and newcomers. However, newcomers would do well to seek guidance or to have others invest their money. If you do choose to invest yourself, there is a lot you need to take into account. That is why we have listed everything you need to know about investing yourself below.

What is self-investing?

What exactly is self-investing? With self-investing, you logically start investing yourself. You create an account with a broker and can then trade on the stock exchange with this broker. With this broker, you can then trade in shares or other investment options yourself, whereby you can also choose to participate in investment funds.

stocks , bonds, options or other securities, or you opt for participation in investment funds. The broker will then buy these on your behalf. The broker does not act as an advisor in this case; when investing yourself, you do everything at your own discretion and at your own risk. The only thing the broker does in this case is execute your orders. However, most online brokers do offer tools, often digital. Think of videos, training courses and search functions. This way of investing is also known as execution only.

Who is it suitable for?

Self-investing is not the best option for everyone. In principle, it is suitable for people who want to invest actively and make their own choices, and do not simply want to have someone invest and hope for the best. Some knowledge of the stock market and the risks and the explicit desire for returns are recommended. With self-investing, you naturally have a chance of a greater return than with asset management, for example. However, if you do not yet have much knowledge of investing, do not want to waste time on difficult choices and would rather just invest a fixed amount per period, then having someone invest is a good option. In addition, you can also invest in funds, where you look for investment funds yourself.

What do you need for this?

First of all, you must be 18 years old and have a passport or ID, which everyone should have. In addition, you must of course also have your own bank account. This is the counter account for your investment account , which you need to actually start investing. In most cases, this is free and can be opened with the broker you have chosen. You buy shares with the money in this account. These accounts can be cancelled at any time and you can always withdraw money from them. You are therefore not tied to anything when investing yourself.

The costs of investing yourself

Of course, there are costs associated with investing , including investing yourself. When investing yourself, you usually pay a percentage for each transaction you make, with the costs varying per stock exchange and type of security. You may also have to pay a fee for managing your shares and other investment options. We call this a management fee, which is calculated as a percentage of your investment value. It is also known as a custody fee or management fee. If you invest in funds, there are always additional costs that you have to pay to the fund manager. In that case, the investment account is often free.

Choosing the best broker

If you want to start investing yourself, it is of course important to choose the right broker. Because the costs, as already mentioned, vary considerably, it is wise to compare brokers with each other. The best choice for you therefore depends on what you want and how active you are.

It is important to first have a clear idea of what you want to invest in, and to select a broker based on this. In addition, the user-friendliness is of course important, and how easy it is to get access to certain stock exchanges. If you want to invest yourself but not without help, it is also important to see if the broker offers courses or other tools. Are you already an investor but are you looking for a different broker? Then view information on our site about other brokers and switching.

Step-by-step plan for investing yourself

To make investing easier, we have created a step-by-step plan. This plan assumes that you have sufficient capital to start investing and achieve returns. If you do not have a goal, you can start at step 4.

Step 1: Determining your investment goal

This is the first and perhaps the most difficult step, determining your investment goal. It is useful to list these.

Step 2: Determine when you need which amount

Here the idea is that you choose a starting amount with which you want to invest. Be careful that this is not too much, because there is a chance that you will lose money.

Step 3: Determine the required final capital per goal

You must take into account the cost increases or decreases of the products in which you invest, as this naturally has an impact on your capital.

Step 4: Determine your risk profile

If you go for returns, you automatically also run risks , this goes hand in hand. You have different risk profiles, which also have different expected returns. It is therefore an important choice which risk profile you take. The longer your investment horizon, the more risk you can take. The chance of capital growth increases as time goes by. This is especially true for investments in shares. The risk profile is easy to choose and compare at many banks and brokers. However, this is different for each provider.

Step 5: Determine how much you are going to invest

Now you can determine how much money you want to invest, usually per month. There are calculators that you can use to determine how much you need to deposit to achieve your final goal, most brokers allow you to calculate this online.

Step 6: Find the right bank or broker

The final step is to find the right broker. Pay attention to the costs and other important differences, which are mentioned above. If necessary, use the broker comparison tool for this.

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Investing yourself, what do you need to know? – TIPS & TRICKS