We Invest to make our money work for us. It is not enough to put the money in the bank to make it grow.
Investing even small amounts can provide a good return. Besides, it’s easy to get started!
The key to making a fortune and financial security is to develop good habits – such as regularly setting aside money that can be invested each month.
Even if you only have a few kroner left over, your money will quickly be able to grow well when it is invested.
Why Invest Money?
Investment is one of the most important strategies for building wealth and achieving long-term financial security.
By investing our money, we can convert active income that must be worked for, into passive income that “grows by itself”.
As investors, we use our money to acquire resources with the potential for profitable returns.
It can be anything from buying stocks and mutual funds, investing in crowdlending, or refurbishing a home or paying down debt.
In fact, if you manage to save and invest a lot, your invested savings can one day grow at a rate that exceeds your own expenses.
It will be able to free you from your active work and make you financially independent.
How much money do you need to invest?
As a beginner, it is good to know that you do not need a lot of money to get started with investing.
You can actually start with as little as 100 dollars, although it will be better with a few thousand.
For most people, it would be wise to invest little by little over time instead of going “all in” with a big pot in the beginning.
You also do not need to be an expert in the stock market to start investing.
What can you invest money in?
The landscape for various investments is large and can be confusing.
The first step is to learn to distinguish between different types of investments.
Those who take the time to understand the basic principles and what separates different types of investments will be able to gain a lot in the long run.
Note that this article is intended to create interest and understanding for investing and personal finance. Do not take the content as direct investment advice.
1. Invest in stocks
The most common reason for investing in stocks is the belief that the stock price will rise in price over time and that one can sell at a profit at a later date.
Historically, the stock market has given a very good return – and when the market has declined, there have been good buying opportunities with cheap shares and good growth in retrospect.
As an example, a Netflix share cost $ 100 in 2016. Four years later, by 2020, the price had risen to $ 450 per share.
2. Invest in mutual funds
Another popular way to invest in the stock market is by buying units in mutual funds.
Equity funds are a large collection of equities, carefully selected, and controlled by professional managers.
By buying units in equity funds, you spread the risk over several shares.
This minimizes the risk of a decline, but can also limit the potential rise somewhat in relation to buying individual shares.
Mutual funds are for many the first step into the world with investments.
Funds are seen as a safe form of investment and there are many different equity funds to choose from.
3. Crowdlending – Investing in loans
Investing in loans is not the first thing that comes to mind when it comes to investing, but it is quite possible to invest money in loans and then make money on interest.
This is called Crowdlending , or Crowdfunding of loans.
4. Invest in raw materials and precious metals
As an investor, you can invest in raw materials and precious metals such as gold, silver, platinum, oil, natural gas, cotton, sugar and the like.
The easiest way to invest in commodities like this is through listed commodities and certificates linked to the price development of various commodities.
5. Invest in real estate
It is well known that investing in real estate can be very profitable. Many have built up large fortunes by investing in real estate.
Unlike stocks, real estate is a fixed asset that you can actually take and feel. This is one of the reasons why real estate is seen as a safe and good investment.
Because investing in real estate requires significant equity and income, investing in real estate is a higher barrier to entry than with shares and mutual funds.
There can also be much more work with real estate investment than with investing in shares and funds.
If you get past this barrier, however, the possibilities are many and you can make good money on investing in real estate if you go for it.
6. Invest in art, cars and other collectibles
Good investments are not limited to shares, funds and real estate. You have certainly heard that art and other collectibles have increased in value and been sold for staggering sums.
One scenario may be that an unknown artist over time becomes famous and has a successful career. In cases like this, the price of the works of art could skyrocket.
Another may be that a rare car has become more sought after over time for various reasons and thus increases in value a lot.
Investing in art and other collectibles will usually not pay off overnight.
These are investments that can be suitable for investors with a long-term perspective – around 10 years or longer.
Art, rare cars and collectibles are of particular interest and not something most investors spend time on.
Investments like this are not for everyone, but can be a good way to diversify a large investment portfolio. Even if the stock or real estate market falls, it does not necessarily mean that art will follow.
However, be aware that the art market is also dependent on the overall world economy.