Finances Under Control

Financial planning and wealth creation for beginners: 25 tips for investment and capital markets
// By Holger Jungclaus

Keeping an eye on finances and spending, saving in the right place - that is only one aspect of financial planning. At least just right: invest properly. 25 tips at a glance.

Find the right investment

You have gained an overview of revenues and expenditure, your financial planning and the iron reserve, or you have made the first steps on this path. So it's time to think about investing.

Before you think about stocks, funds or real estate before you invest, you should understand how our money system works - you become the money-sovereign. Only then can you make a responsible decision for your investment.

Why banks do not help

Unfortunately, banks are not a reliable consultant here, as an economic company is the sale of one's own or for the bank particularly lucrative products in the foreground. Do not worry, you do not have to graduate from business studies, the basics you can acquire, a little time and energy to help you read a guide. I would like to give you a first overview of the various financial investments.

In the short term, your capital is best invested in daily or time deposits. Better not abroad, however, where the risks are high and the legal situation is uncertain, as I know from my own painful experience. I only recommend concrete gold, i.e. real estate, only if it is used by the owner or if it is profitable in terms of location or price. In both cases, however, the company's own capital is unfavorably bundled and thus exposed to a "cluster risk".

The most important forms of investment in view

In the following, I would like to give you a brief overview of the various forms of investment, so that you can gain a better understanding of the possible investments and gradually become the money-sovereign.

1. Passbook: There are special accounts for these investments. They only allow two types of payment: deposits and withdrawals. The good old Sparbuch, in which the cash deposits are recorded and which the customer takes home, has lost its former function as a safe and profitable investment medium. At the moment, there is only a minimal interest rate on deposits. In many cases there are periods of notice and maximum amounts for availability.
2. Daily allowances: Instead, there is the electronic scrapbook, which can also be used as a daily money account. Daily money is money that is spent only for a few days.
3. Appointment and time deposit: Term money is created up to a certain, fixed time. Time deposit is another name for term money. All other forms of investment are investments because they involve an entrepreneurial risk.
4. investments: Under the heading "Capital investments", a participation in a company, a closed fund or similar is generally understood.
5. False bank participations: We "participate" by opening an account in a bank. We are creditors of the bank with our money. In fact, the private account holder at the bank is converted into a lawless, high-risk entrepreneur.
6. Real participations in partnerships and corporations: Real investments are possible in partnerships and corporations. A participation in a company differs from the loan by the entrepreneurial commitment. While you as a lender have only the right to the agreed interest and the repayment of the capital, a participation includes the right to vote or the right to profit or loss participation.
7. Loan: Loans are available in any type and form. In legal terms, it is a contract of indebtedness in which the lender grants the borrower money or objects for use for a certain period of time. Customary forms of the loan are physical loans or money loans with the variants of final loans repayed at the end of the term with an amount of annuity loans in which the amount of interest and repayment to be paid annually remains the same because the accrued interest is used for the repayment. In the case of redemption loans, the redemption amount remains constant; interest is calculated from the residual amount. This means a declining amount to be paid, since interest rates are reduced with every repayment rate. Mortgage loans are secured with a real estate right on a property. Mortgage loans
8. Certificates: Certificates are debentures, ie loans to the bank. Instead of an interest rate agreement, you close a bet.
9. derivatives: Derivatives are highly speculative art products in the form of contracts which derive their economic value from a reference value. This can be securities, raw materials as well as financial art figures.
10. Government and corporate bonds: Bonds are interest-bearing securities. The issuer, i.e. the borrower, creates third-party capital in order to be able to implement certain projects. Whether old debts are being paid off or investments are being made or the money is simply being churned up as a working capital loan - these questions usually remain unanswered. Issuers can be states and companies. If the issuer is a state, one speaks of government bonds. They have a huge volume and are therefore very liquid. They are rated by rating agencies. Issuers with first-class credit ratings receive the best rating (eg "AAA", the "Triple A" from Standard and Poor's). The better the rating, the lower the interest rate.
11. Fixed and floating rate bonds: In the case of fixed-rate bonds, the investor receives a fixed interest rate fixed for the entire maturity. The floating rate bond has a floating interest rate that is linked to a reference interest rate. Investors are offered a broad range of options such as convertible bonds, warrant bonds, inflation-indexed bonds or linkers, zero-coupon bonds, redeemable bonds, annuity bonds, coco bonds (contingent convertible bonds) bonds), currency bonds are available from both states and companies. From high-quality to highly-risk bonds, called high-yield bonds, everything is available.
12. State funds: The fund is similar to bonds. They are as numerous as paving stones on the street and in as many forms. Funds are entities that collect, invest and manage capital. State funds hold a global capital of far more than 4 trillions of dollars. Whether wanted or unintended, they influence the financial markets. This fund is not available to private investors.
13. Open Funds: Mutual funds are a special form of investment with different objectives. They function as large "money pools" into which many investors deposit their money in order to invest it together. The "money pool", the investment company bundles the deposits into a special fund, which means that the funds must be strictly separated from the company's assets. The investor becomes a co-owner of the fund's assets and participates in the performance (both profit and loss). The investor receives unit certificates for his deposits, which are traded every trading day. Fund managers manage the money and, depending on the direction of the fund, place it e.g. B. in shares or bonds. The principle of risk diversification applies, which means that the entire fund assets are invested in many individual stocks, shares or bonds. Spreading the money reduces the risk. The technical term for this is diversification. These managed funds, as they are called, usually incur costs: the front-end load, management fees, custodian bank fees.
14. Funds of Funds: Fund of funds do not invest in individual products, but in investment funds. A large number of investment funds are therefore united under one roof. In the case of open-ended real estate funds, it is important to note a special feature: the investment company is the owner of the real estate and is entered as such in the land register. The retail investor can participate in real estate through this design.
15. Closed funds: The investor participates in a company (usually GbR or KG) by acquiring units. The company is planning one or more projects. If the required capital is available (drawn), the issuance of shares is closed (closed). The projects are of various types. The most common are real estate, ships, airplanes, containers, solar systems and also films. The advantages are an above-average and regular return over a long period of time. However, there are some serious drawbacks. As a matter of principle, the investment is subject to an entrepreneurial risk. This can lead to a total loss. As a co-contractor, you are liable.
16. Capital Life and Pension Insurance: The life insurance includes two insurance policies: a life insurance policy that is due on the death of the insured person. When the agreed expiry date is reached, the accumulated capital is due for payment. In most cases a disbursement can also be chosen as a pension. She was the German dearest child in the investment, the taxpayer model of the little man. There are still millions of contracts on 90. However, for some time it has lost its importance as a result of the resolved taxation and the low-interest policy, which has positively evaporated the returns on the savings share. That is not enough, the legislator has continually lowered the guarantee rate over the last ten years. The pension insurance does not cover the death penalty. The risk insurance covers only the death of the insured person.
17. Precious metals and others: Among the precious metals, gold is the most popular investment. All others follow at a great distance. They have one thing in common: they do not yield any returns. In this respect it is not for me a real investment. Precious metals are mostly acquired by fear and are intended for emergency purposes.
18. Property: The biggest dream of...