How to start investing? It might seem like a mountainous task, but it’s often the key to unlocking financial freedom.
Over a recent coffee catch-up, post our sun-soaked summer breaks, I chatted with a colleague—let’s call her Ms. A. She’s been with a UN-affiliated organisation for over a decade. As we sipped our brews, we stumbled onto the topic of money. Curious, I asked, “So, Ms. A, where do you stash your cash?” Turns out, her decade in Geneva had her savings chilling in a UBS account, with her only “investment” being… shopping! Yep, shoes and bags. 😂
That little chat got my gears turning. How could I help folks like Ms. A—UN peeps in Geneva who think “stocks” are just soup bases and want their money to grow without the fuss? This revelation got me thinking about the importance of investing and how many might be missing out. So, let’s dive deep into why and how you should start investing, based on this enlightening conversation.
The Reality Check: Why Start Investing Now
Banks, with their 0% on personal accounts and a slightly better 0.75% on savings accounts (UBS rates as of Aug 2023), aren’t doing your money any favors. With inflation at 1.6% in 2023 (source), not investing means you’re essentially losing money. But what does this really mean for the average person?
Imagine saving for a dream home. Every month, you diligently set aside a portion of your salary. However, due to inflation, the cost of that home is steadily rising. If your savings aren’t growing at a rate that outpaces inflation, you’ll find that dream slipping further away. This is why it’s crucial to start investing.
Step 1: Start Investing with La Mutuelle CHF Deposit Account
La Mutuelle isn’t your typical deposit account. With interest rates like 1.35% in 2022, it’s a solid start to your investment journey. Exclusive to staff from select organizations (ILO, ITU, WTO, WMO, WIPO, IMO, UNICEF, IOM, WHO, HCR, IPU, UNITAR and UNEP), making it an ideal emergency fund. However, it has a monthly deposit cap of CHF2’000. That’s why it is crucial to start saving into this account as soon as you join your UN affiliated organisation.
Why is an emergency fund so crucial?
An emergency fund acts as a financial safety net. Whether it’s unexpected medical expenses, car repairs, or sudden job loss, life is full of surprises. By having funds set aside, you can navigate these challenges without derailing your financial goals.
Step 2: TrueWealth – Where Investing Begins for Beginners
For those hesitant to start investing because of its perceived complexity, TrueWealth is your answer. This robo-advisor, which has been around for more than a decade, offers a hands-off investment approach. With fees around 0.5-0.7% annually, you can initiate your investment journey with a deposit of CHF8,500.
But what’s the real advantage of a robo-advisor?
It’s the simplicity. Traditional investment methods can be overwhelming, with countless options and strategies to consider. Robo-advisors simplify the process, making it accessible for everyone, regardless of their financial knowledge.
And for the investment enthusiasts, I’ve been experimenting with a mix of equities, bonds, REITs, and natural resources on TrueWealth. More on that soon!
Step 3: Autopilot – The Smart Way to Start Investing Regularly
After setting up your accounts, automate your investments. Set “standing order” instructions with your bank to send CHF2’000 to La Mutuelle and your chosen amount to TrueWealth. This consistent investment strategy can be a game-changer.
Consistency is key in the world of investing. By regularly contributing, you leverage the power of compound interest. Think of it as “interest on interest.” Over time, this can lead to exponential growth of your investments.
The Bigger Picture: Why Starting to Invest Matters
Investing isn’t just about growing your money. It’s about future-proofing your finances, ensuring you’re prepared for whatever life throws at you. With the ever-changing global economy, diversifying your investments provides a safety net against financial downturns.
Moreover, investing can be a pathway to achieving your dreams, whether it’s buying a home, traveling the world, or ensuring a comfortable retirement. By starting to invest now, you’re setting the foundation for a brighter, more secure future.
Starting to invest is a journey, not a destination. It’s about taking that first step, then the next, and continuing on, building a secure financial future. It’s about making informed decisions, staying committed, and understanding the value of patience. So, whether you’re sipping coffee or pondering life’s big decisions, remember: the best time to start investing was yesterday; the next best time is now. Dive into the world of investments, empower yourself with knowledge, and watch your financial dreams turn into reality. Start investing now and subscribe to the Money Monkey!