There are several ways to invest your money. In particular, an investment beginner may be lost in such a wide range. That is why we will approach three things that are worth investing in today.
1. Mutual funds
Under the term mutual funds, do not represent just one investment option. There are several types of funds that differ in the type of assets in which the fund’s assets may be invested. Specifically:
- money market funds
- short-term investment funds
- bond funds
- equity funds
- mixed funds
- structured funds
- real estate funds
- alternative investment funds.
The individual options for investing in mutual funds differ in risk, profitability and also the time horizon for which it is ideal to invest. For example, money market funds and short-term investment funds are probably the best choice for investment beginners in the offer of mutual funds. The advantage of these funds is minimal risk. The disadvantage may be lower yields.
Bond funds are a good choice for those who want to invest for a longer period (2-3 years). These funds expect a slightly better return than money market funds, but they also carry a slightly higher risk. Equity funds are more suitable for more experienced investors. They are probably the most profitable of the four mutual funds, but their value may fluctuate. Therefore, they should be used by an investor whose sudden changes are no longer surprising. Mixed funds represent a combination of previous funds, thus investing in different types of assets in different markets in a defined ratio.
A special category are funds of funds that buy units of other funds. The recommended investment horizon is more than three years.
It is true that investing in mutual funds may be somewhat confusing to beginners. However, if you are interested in it, you can arrange a meeting with us in Central Bank and we can talk about investing in mutual funds together.
People will always need a roof over their heads. Investing in real estate is quite simple and can create some kind of passive income. It works essentially by buying an apartment for a mortgage (ideally in a good location in a city with a large number of students) and renting it.
You can use monthly rentals not only for mortgage payments, but you will still have something left. So you earn slowly. In addition, you can move into the apartment yourself or use it differently. E.g. as a gift for your child who wants to become independent. However, before buying an apartment, be sure to consider all possible costs, such as the financing needed for renovation, equipment, taxes, levies…
If you do not have the courage to solve all the pitfalls yourself, the right product is real estate funds that invest in the real estate market for you.
3. Term deposits
Although term deposits are probably not investing in the true sense of the word, they are still popular with people. It is one of the most popular bank savings products. You deposit a certain amount of time on a term deposit, which you won’t need in the near future, and then just let it earn you with interest.
Before creating a term deposit, you should be interested in the interest that the bank provides. Again, the longer the bond, the higher the interest. But the right investor is patient. You can also easily calculate your interest on the term deposit at Central Bank on our online calculator.