Investing small sums is the basis for building a solid future. Italians are a nation of savers, but they still invest too little. The latest data from Banca Italia, updated to 2023, tell us of over 1700 billion blocked in current accounts. In fact, there is a tendency to leave one's savings fixed in current accounts or deposit accounts (usually small sums).
However, the low yields offered by these investment solutions and the related costs make the gain almost nil, also exposing the deposit to the inflation tax.
The good news is that the culture of saving is still widespread in our country and the new generations are not exempt from it. According to the precious study that the Einaudi Foundation publishes every year on the subject, more than 90% of those interviewed in the 18-34 age group recognize the positive value of filling the piggy bank.
Unfortunately, this awareness almost never transforms into an active approach: if, for example, most young people are in fact aware of the risks associated with their retirement - explains the Einaudi Foundation - only very few have asked for help from a professional to understand which it will be their fate.
In reality, one of the main problems in the past was that the financial industry did not guarantee the possibility for those wishing to invest small sums to access investment products of the highest standard. Today, thanks to technological progress and financial innovation, even investments with small amounts can access quality and highly personalized services.
| 🥇 What is the first thing to do to invest small sums? | Saving is always the first step |
| 👶 At what age can I start investing? | As soon as possible |
| 🤑 Can you only invest large sums of money? | Absolutely not |
| 😊 What's the best strategy? | 1.Diversify 2.Contain costs 3.Reduce risk |
Where to invest today with small amounts?
If you want to start an investment journey starting from small sums, you are on the right track. As we have said in the past, the financial industry did not cater to those wishing to invest small sums of money with an adequate offer. This is because investments are a form of professional service with high added value, with very complex operations, which may not be profitable for intermediaries for small amounts.
In recent years the situation has radically changed, for two main reasons:
- THEtechnological evolution brought by new generation finance (fintech) has drastically reduced investment costs and operations. This means that today even those with small sums can access the markets with relative ease.
- A second crucial innovation that has favored investment with small sums is the diffusion of passive investment funds, or ETFs. These funds allow the investor to obtain a broad diversification by investing in a large basket of securities, at very low costs. The diffusion of ETFs has paved the way for sophisticated strategies even starting from small sums.
So where is it better to invest small sums today? The most suitable solution could be to use an app to invest small sums. In recent years, many of these apps have come out, which allow you to open an investment plan even starting from 0. To understand which app is right for you, you should first understand your needs as an investor. Most of the services found on the market today are trading services, i.e. services that allow the investor to buy and sell securities on the market, even at very low or no cost.
As a resources4gaming what we are trying to do is open up the Wealth Management service, once dedicated only to managers of large estates, to a wider range of investors. We use ETFs and technology to offer a highly personalized investment service to a wide range of investors. We also provide all our investors with a dedicated advisor to support you throughout the investment journey.
Investments small sums: the first step is to save
If you have the opportunity during this 2023, it would therefore be a good idea to start saving. Even small monthly investments, a small sum (for example 1.000 euros, 5.000 euros, 10,000 euros or even more substantial amounts up to 100000 euros or even more) can over time become the first brick for a more stable financial future and lay the foundations for buying a house, raising children or simply to protect yourself in view of retirement.
It is true, for many there are many expenses and it is not easy to save money. In many other cases, however, a simple rationalization of one's expenses could reveal unexpected surprises.
By nature we are not inclined to evaluate daily expenses and income as a whole. A rational view of our incoming and outgoing flows could help us have a clearer view of our budget, or how we spend our money. Think of a company: it would be impossible for any accountant to have control of the situation without writing down income and expenses in a table. The same goes for you. If you can get a general overview, you will find that over time you regularly allocate a part of your income to a limited number of expenditure items.
Gaining this knowledge is the first step in understanding how to reduce your excess expenses by attacking the cost items individually. For example, you will be able to evaluate how much you spend on petrol each month, or how much of your budget is dissolved in cafes or restaurants.
By imposing this mental discipline on yourself, you will be able to get used to a healthy culture of savings (which is very different from a culture of deprivation, mind you).
Investing small amounts of money: finding the right strategy for you
Once you have identified a share to be allocated to savings and perhaps with the help of a small starting capital, a graduation or birthday gift, it's time to evaluate the solution to enter the market and understand how to invest small sums of money. In uncertain times like the ones we are experiencing at the beginning of 2023, there are many opportunities but it is mandatory to act prudently on the markets, in order not to be caught unprepared by any unexpected events capable of affecting the return prospects of our assets.
A good strategy for 2023 could be to organize a CAP (capital accumulation plan) which allows you to gradually increase your investment through recurring payments. This solution offers you great flexibility and leaves you time to gain confidence with the markets, also giving you the possibility of planning a larger investment over time, perhaps even 20.000 euros.
If you are a novice investor, it is normal that you are intimidated by the world of finance and the risks associated with it.
The CAP is also a suitable strategy for small investments for young people. By investing on a regular basis, you can lay the foundations for building your wealth over the long term. When it comes to investments for young people, it must be remembered that the best ally is time. Thanks to the compounding effect of interests, even through the regular investment of small sums, there is the possibility of building up a very important wealth over time, which can lay the foundation for financial security in later life.
In short: how to start investing small amounts of money?
A widespread belief is that financial investments are a high-risk activity or reserved for experts. Today, thanks to technology, asset management services, once dedicated to holders of large capital, have also become within the reach of anyone who decides to make small investments. On the contrary, the so-called "safe" investments in the next few years will not guarantee significant returns.
You must then remember that investing does not necessarily mean playing the stock market, leaving your savings at the mercy of the tide of the markets. Today there are tools that allow you to contain risks through diversification. ETFs are baskets of securities whose performance is linked to that of another index such as a stock exchange or a commodity.
Opening an Asset Management in ETF would allow you to:
- diversify your investment (investing in different assets allows you to balance any losses from one class of securities with gains from another)
- have significantly lower costs than other solutions (passive management allows you to reduce costs compared to active management)
- reduce risks
These features are perfect for those who want to set up a long-term investment strategy. Indeed, it has been proven that over the long term, ETFs perform better than strategies that take on large risks to take advantage of the daily performance of the stock exchanges.
In the case of resources4gaming, our independent consultancy, outside the logic of conflict of interest, helps investors to give value to their savings and to understand where to invest and how to invest even small sums. Since even small sums, in the long term, can help build a solid future.
Check out our guides, updated for 2023, on investing different amounts of money, from the smallest to the largest, and find out which is the best solution for you:
- Invest 1.000 euros
- Invest 2.000 euros
- Invest 5.000 euros
- Invest 10.000 euros
- Invest 15.000 euros
- Invest 20.000 euros
- Invest 30.000 or 40.000 euros
- Invest 50.000 euros
- Invest 100.000 euros
FAQ
Where to invest small sums today?
Since technological evolution has considerably reduced investment management costs, it is possible to access the financial markets even by investing small sums. One of the most convenient options is to choose a passive investment fund, an ETF or rely on asset management.
How to invest small amounts?
You can start investing small sums with monthly deposits and always keep the sums destined for savings under control. A good strategy could be to organize a PAC (capital accumulation plan).
Where to invest a small amount?
One of the best solutions to invest a small amount and keep a low level of risk are ETFs. These instruments make it possible to optimally diversify an investment portfolio and, consequently, reduce its volatility and risk.
