Invest with purpose 💸 🌱
When you hear about the benefits of investing and the potential to combine that with contributing to a cause you care about, it is exciting and inspiring!
But if you are new to the world of finance, it can quickly become overwhelming. It can even be difficult to know what you need to know, and where you can find reliable and trustworthy information.
By spending some time in the beginning to understand the basic principles, the rest becomes easier and less daunting. And it’s definitely better to take a bit of extra time to do your homework before you start investing, as it can be costly and risky to change once you’re ‘in the game’.
Here are some practical considerations that might help you to enjoy the process of getting started:
Why do you want to invest? What are your goals and purposes?
For example, do you want to travel in two years, or are you thinking longer term?
How much money are you able to invest?
One key misconception of young investors is that you need a lot of money before you start investing. The truth is that now you can start with as little as 100dkk and while more money will give you more options, it means that you could start sooner than maybe your thought…
However, you should also consider if you have any debt, a regular income and in general, reflect on your current overall financial situation.
For example, what do you want your money to contribute to? One common principle of investing is to invest in multiple companies and areas (ie. diversify your portfolio). So you don’t have to pick only one company or area of interest — you can have many!
If sustainability is a key factor in your decision to invest, then it’s good to understand the concepts of impact investing and ESG. In simple terms, impact investing is the idea of making a financial return by investing in businesses that address social and/or environmental issues.
Investing costs money. There are always fees associated with investing, so be sure to check any small print and hidden costs when deciding to invest.
Predicting the future is nearly impossible. If you receive advice that sounds too good to be true, it probably is. This is another reason why having a basic understanding of how investing works is beneficial. It can empower you to ask smart questions and show advisors that you should be treated as a serious investor.
If you decide to invest without receiving professional advice, there are tons of blogs, videos and sites with information for new investors. A lot of the content is now also targeted to young investors with a sustainable mindset so you don’t need to sort through too many graphs and heavy terminology.
By having clear goals and realistic expectations, while also being informed about the basics of investing, over time you will begin to ride the learning curve to becoming a smart impact investor.