When it comes to building up assets, it is often difficult to give specific tips. For one person, even âŹ25 per month may be difficult to manage. Others may have no problem investing over âŹ1000. And for still others, being able to invest âŹ500 is a challenge. But they all have one thing in common: they all want to invest profitably!
We therefore take a look at 4 good ways in which you can invest 500 euros per month. Thatâs an ambitious but achievable sum. Weâll also explain how you can use your âŹ500 per month wisely and profitably. But weâre not talking about âboringâ tips, such as the best ETF or the most profitable share; today weâre talking about the really profitable methods!
If youâre looking for more ideas and tricks for your finances, you should also take a look at our forum for personal loans. There you can exchange ideas with other investors on these topics and are sure to find valuable answers and inspiration.
Invest 500 euros â An early start is priceless
If you want to make a handsome fortune one day, you should start investing as young as possible â thatâs no secret.
Due to the compound interest effect, the growth of savings is constantly accelerating and if you start early, you have enough time to fully utilise this mechanism. The big advantage is that no high-risk investment strategies are required to achieve personal goals.
500 per month is a considerable sum â the equivalent of 17 euros per day. However, if you have found a reasonably well-paid job and live somewhat frugally, you can reach this amount early on. Letâs take a look at a few brief examples of what you can achieve with this:
A return that can be achieved without too much risk can be confidently estimated at 6%. If we manage to invest the aforementioned 500 euros every month over a period of 20 years and also utilise the compound interest effect, i.e. reinvest all profits directly, we will achieve a proud 272,000 euros. Of these, a whole 150,000 are profit/return/interest and only 120,000 euros were paid in each month!
However, to really experience the compound interest effect in action, letâs simply increase the duration of our calculation example to 30 years, with all other parameters remaining the same. In this case, our deposit amount increases to âŹ180,000 and we realise a profit of a whopping âŹ474,000 â almost half a million.
If we now add another 10 years, we are at 40 working years â a typical average of a working life. This brings us to a total of âŹ1.4 million, of which âŹ240,000 was paid in by our âŹ500 per month. This is where the compound interest effect really comes into play and should convince even the last sceptic of the importance of an early start.
1. Sufficient reserves
But now letâs start with the actual investment methods, with a somewhat unusual tip: build up enough reserves. âThatâs not an investment at all!â you might be saying. That is a question of definition: we see it as an âinvestment in yourselfâ. This is because you are creating a safety net that protects you from financial losses.
If you ever find yourself in a situation where you need money â and this is guaranteed to happen sooner or later â youâll have capital to hand quickly and wonât have to borrow it from a bank on very unfavourable terms.
If your car needs repairs or you need a new washing machine, simply use your cash or the reserves in your current account instead of using your credit card and its high interest rates.
The amount of savings is of course up to you, but amounts between 3 and 6 monthsâ salary have generally proved to be successful.
2. Invest in yourself
You may not necessarily have expected this point either, but it is one of the most profitable ways to invest your money: Invest in yourself, for example in the form of training and further education. Of course, you donât have to invest the entire âŹ500 per month â even a small amount, such as âŹ50 for literature, can have a huge impact.
In addition to traditional books, audiobooks are of course also an option. The more modern options, however, include online courses and masterclasses, which you can use to interactively educate yourself on relevant topics.
It doesnât just have to be about business, finance or your profession. Knowledge in the software sector, something artistic or simply a foreign language will also help you personally.
This investment pays off much more in the long term than simply investing the amount on the stock market.
3. Invest 500 euros in your own company
One of the most rewarding ways to utilise the knowledge you acquired in point 2 â or the skills you already have from other areas â is to start your own business. The times are generally favourable for this, as there seems to be hardly any discipline that you canât earn money with today.
It doesnât matter whether you want to be active online or in the âreal worldâ â both promise high returns if you have the necessary skills and invest your energy accordingly.
The effort involved in starting your own business has been reduced more and more in recent years, so it should be easy for you to get started.
A domain is quickly registered and the corresponding website is set up using a simple CMS such as WordPress. Thanks to social media, marketing is also easier and faster than it was in the past.
If your product or content is of a correspondingly high quality, nothing will stand in the way of your success. Northern Finance also started out this way.
4. Pay off debts
Anyone who has debts is constantly losing money due to the interest they incur. One of the easiest ways to invest profitably is therefore to put an end to this situation! If you pay back your loan, overdraft facility, credit card, etc., you ultimately earn the amount otherwise required for the interest. However, this is specifically about so-called âconsumer debtâ, i.e. the expenses incurred for consumer goods and the like.
These should be clearly distinguished from long-term, usually low-interest expenses, such as student loans. Such an investment in yourself has a much lower priority than the debt taken out for a new car or the last holiday.
Consumer debt is one of the expenses with the highest interest rates â and by a wide margin. This alone should make it clear to you how important it is not to be among those who take out such loans.
What do you learn from this if you want to invest 500 euros?
Our list is probably not what you were expecting when you read âprofitable investmentâ. As much as we are big fans of P2P loans, ETFs and shares ourselves, itâs clear that the best investments are not to be found in the financial markets.
Instead, it is obvious things such as paying off debts or investing in yourself that promise you the greatest return. Only when these measures have been completed should you start building up your wealth through financial instruments.
P2P loans could be a possible answer to the question of where to invest the money left over after debt reduction, starting a business, further training and reserves. We have analysed one of the leading providers, Bondora, in detail for you in our article âThe Bondora Go and Grow Guideâ. This will make it much easier for you to enter this very lucrative field.
