Increasing money – who wouldn’t want to do that? Read here which common tricks and investment forms there are and how you can best use your money to increase it either at low risk or in a short period of time.
Increasing money: 10 ways to build up wealth
| Secure deposits in savings accounts
Whether savings account, call money or time deposit: Savings deposits are simple and safe. On the other hand, a savings account yields only a small return, of which even less remains in real terms if inflation is taken into account. Some savers even end up in the red here instead of increasing their money.
Why do you want to invest money?
Saving for children
Providing for old age
No specific goal
| Buy bonds
Debt securities (bonds) promise investors interest. But beware: the creditworthiness of the borrower is crucial here. Both government bonds and corporate bonds can lead to a total loss if the issuer is unable to repay its debts. Bond funds and bond ETFs offer an easy way to spread risk. Subordinated bonds, on the other hand, carry a higher risk, but also reward investors with attractive returns.
| Invest in shares
Holders of securities receive profit shares and increase their money through dividend distributions. In addition, the acquired shares can be traded on the stock exchange and sold at any time.
However, shares are volatile, i.e. their prices fluctuate. Shareholders often make big profits when prices are rising, but they also risk big losses when prices are falling. A certain knowledge of the sector is often indispensable in order to be able to assess the price development of individual shares.
| Spread risks with funds
Instead of individual shares, you can also buy shares in equity funds. A fund manager then takes over the purchase and trading of the securities for a large group of investors. These benefit on the one hand from the expertise of the manager, and on the other hand from risk diversification – because the collected capital can be used to buy different stocks and build up a well thought-out portfolio.
However, fund managers often charge horrendous fees that reduce returns. An alternative is low-cost ETFs: passively managed funds that track an index. For example, a DAX ETF always tracks the performance of the securities of the 30 largest German stock corporations.
| Cash in on interest through real estate crowdinvesting
One way to invest indirectly and with small amounts in the tangible asset real estate and to increase money is real estate crowdinvesting. Here, a group of investors joins together as a "crowd" via an Internet platform and invests jointly in the form of mezzanine capital in a real estate project. In contrast to crowdfunding, the crowd receives an attractive return on the money paid in.
The difference with a real estate fund is that investors decide independently in which real estate projects they invest. At the same time, the low minimum investment volumes common in crowdinvesting enable risk diversification. This way, investors do not have to blindly rely on the decisions of a fund manager and can still share investment risks.
Crowd investors benefit from fixed interest rates and fixed maturities. On investment opportunities brokered by the crowdinvesting platform BERGFuRST, investors receive for example 5.0 % to 7.0 % interest rates at Maturities between one and five years.
| Buy real estate directly
Your own property as an investment: Rents generate regular income and after a few years the property can be sold to increase profits.
But unfortunately, the return on real estate is not that simple. Because caution is also required when buying real estate: Even the tangible value of a property has costly risks that may not be known to the layman. In addition, the bursting of a real estate bubble can wipe out the appreciation in value of a property. In addition, the purchase of real estate as an investment has other disadvantages: a lot of equity is required and this is usually a long-term investment.
| Invest in real estate funds
On the other hand, investors who buy shares in real estate funds can avoid the dangers and disadvantages of buying real estate and still profit from the real estate market. You can rely on the expertise of a fund manager, need less start-up capital and can invest at shorter notice or in the short term. act more flexibly.
There are open-end real estate funds, which are characterized by greater flexibility and more security, and closed-end real estate funds, which in return yield higher returns.
| Venture into derivatives& Day trading
The term derivatives stands for a variety of different financial instruments that are highly complex and hardly suitable for beginners. Whether certificates, futures, forex trading, CFDs or leveraged products such as warrants and mini futures: the rich returns are only for professionals who know what they are doing.
Derivatives are also financial instruments used in day trading. Day traders act extremely short-term (within one day) and highly speculative. Day trading should also be left to experts, because investors often lose (gamble away) their assets instead of increasing them.
| Issue loans with crowdlending
Another way to increase money is crowdlending via providers like auxmoney. Here, investors lend money to private individuals or companies via an Internet platform. The worse the credit rating of the credit seeker, the higher the interest rates and thus the return for the lender.
However, investors should be cautious, especially if they have a weak credit rating. Because if borrowers are unable to repay their debts, this can mean the total loss of the invested capital.
| Protect yourself with gold
Money can also be increased with an investment in gold. The rare precious metal is a tangible asset that is subject to fluctuations in value, but will probably never be completely worthless. In addition to gold, other precious metals such as silver or platinum, as well as commodities such as oil or diamonds, can also be used to invest money. However, there are no regular distributions and investors must also bring a lot of patience.
In addition to the options listed here, there are a number of other financial investments, the number of which is constantly growing. The BERGFuRST guide contains detailed information on various investment opportunities and is constantly being updated and expanded.
Increase money – without risk?
Risk-averse investors tend to prefer safe investments such as fixed-term deposits or overnight money. Investment opportunities with deposit protection are particularly low-risk in this respect. But the lower the risk, the lower the return on investment. In addition, there is currently a phase of low interest rates. Thus, with the interest that investors currently receive, for example, on a call money account, often not even the inflation trend can be compensated for.
Inflation rate and average overnight interest rates from 2016 to 2020
Sources: Federal Statistical Office (Destatis) and Tagesgeldvergleich (average overnight interest rate up to 5.000 €), as of January 2021
Those who forgo any risk often do not succeed in increasing their money at the moment. Too high risks can in turn lead to losses. Money can preferably be increased by building up a balanced portfolio that contains both safe and high-yield investments and offers a good middle ground.
Increase money – in a short time?
Investors who want to multiply money quickly need high returns. Because, of course, the larger the return, the faster the assets grow. Particularly high-yield investment opportunities can be found on the stock market and increasingly in the FinTech sector.
Even with fixed-rate investments, money can grow quickly, provided the interest rates are high enough. With the so-called rule of 72, it is possible to calculate how long it takes to double the invested capital with a fixed interest rate, taking into account the compound interest effect:
A few percentage points can already make an immense difference. With investment opportunities brokered by the crowdinvesting platform BERGFuRST, investors receive, for example, fixed interest rates between 5.0% and 7.0% on their investment, while time deposit investors currently receive between 0.6% and 1.6% interest*.
While investors with a fixed deposit account have to wait 48 years for their invested capital to double, this can theoretically be the case after only 12 years with investment opportunities brokered by BERGFuRST:
*For investment periods between one and three years.
Please note that time deposits are covered by the statutory deposit insurance and therefore have a higher security profile than other investments such as those brokered by BERGFuRST. To prevent the risk of a total loss, you should always diversify your portfolio and ensure sufficient risk diversification.
Increasing money online
Increasing digitization is enabling a range of novel investment opportunities for investors. In addition, it is now possible to work on increasing one’s own money at any time and from anywhere.
Ways to increase money online are u.a. Crowdinvesting, crowdlending and day trading (see above). In addition, there are new areas such as social trading, robo advisors and cryptocurrencies. In addition, new, innovative ways of enabling Internet-based capital investment are constantly being developed. You want to invest money without fees in just a few clicks? Then the platform BERGFuRST is perhaps the correct for you.
Growing money with little start-up capital
Savings plans are worthwhile for investors who only have a small starting capital. Small sums are paid into a savings plan on a regular basis, which are invested immediately. In this way, even a small amount of money can be continuously increased over the years.
Classic Bank savings plans Only yield very low returns due to the ongoing low-interest phase. However, it is also possible to invest shares, funds and ETFs save. Even with real estate crowdinvesting, investors can use the Savings plan on BERGFuRST Save money every month.
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