10-point checklist for your first investment in 2023PUBLISHED ON Monday, 2 January 2023
You want to get started with investing in 2023? Get ready for your first investment with this 10-point checklist!
In our financial outlook for 2023, we already told you what we think will be important for you and your money in the coming year. But 2022 has made it clear to us how quickly the world can change. The market environment is influenced by many factors, and that makes it difficult to predict future developments. Nonetheless, below we share our thoughts on what is important for you to take care of as a newbie investor:
1. Your Money Mindset
The first step to taking control of your finances is neither emptying the piggy bank nor stopping by at your bank advisor. It all starts with you and your attitude toward money. Your Money Mindset is the foundation for your strong financial future because it guides your financial decisions and empowers you to own and shift your financial situation and resources. In addition, exploring your Money Mindset is also important to ensure you make it unscathed through the ups and downs of the stock market.
We have developed a really fun way to explore your Money Mindset. Our Money Therapy game is a collection of questions designed to provide you – and whomever else you invite to join you – with food for thought and “conversation starters” to kick off a reflective process about your relationship with money. You can download it for free as an online version in your Vitamin account. Play it with your friends or loved ones and see how easily positive shifts can happen.
2. Understand the Time Factor
There are two things you should understand about time. First, if you want to build a stronger financial future, you should be willing to invest time and energy into building the right foundations and making decisions that you feel good about. Set aside dedicated time in your calendar to do this – how about a weekly or monthly Money Date, for example?
Second, learn to be patient. Long-term investing requires patience because it takes time to generate returns. Not only does compound interest take a few years to work its magic, but time is also crucial when it comes to balancing the ups and downs in the stock market. Your investment horizon should be at least 10 to 15 years if you want to start investing for the long term. You have to be patient and focused on the long term to hold on tight through the ride of investing, with the knowledge that financial markets and compounding work.
3. Setting Financial Goals
It’s important to have clear financial goals and develop an investment strategy that aligns with those goals.
By setting goals, you give yourself a clear idea of what you want to achieve and in which direction your journey is going. Goals serve as a roadmap that tells you where you want to go. They help you focus on what’s important and stay away from distractions and other things that might throw you off course. Goals also give you a way to measure your progress and celebrate it.
4. The Right Timing
Don’t be discouraged to start investing just because you hear the inflation rate is still too high or a recession might be coming. On the positive side, the stock market is actually on sale, because when stock prices are low, you get more shares for your money. So the right time to start investing is always NOW. There may still be more volatility coming but remember that you decided to do this for the long term.
We dedicated a full Insta-Live to this topic with our financial experts, which you can watch here on our Instagram channel.
5. The First Money in Your Portfolio
With all the price increases right now, do you feel like you don’t know exactly how much money you can invest? Then get an overview of your income and expenses over one to three months with the help of the Vitamin Budget Tracker to see your savings potential and know how much money you can invest at once or monthly from now on.
But that doesn’t mean you have to wait another three months to start investing. To get a feel for your first investment, you can start with as little as 1€ at Vitamin. This will not secure your pension or finance your dream house in the long run, but you can learn how investing works. From then on, you can increase the amount you save each month and adjust it to your financial goals. And let’s be honest, whether it’s 1€, 20€ or 50€ – how quickly do you spend money every month on things you didn’t need in the end? There’s bound to be something you can forgo the next time you make an impulse purchase to invest a few euros in your future self. Make that hard-earned money work for you!
6. Risk Management
The basis for your investment strategy is your own risk tolerance. The weighting of the asset classes or investment types in your portfolio, for example, depends on this.
Do you find it difficult to assess your own risk? You like to climb high peaks and throw yourself into the waves while surfing, but you’re not sure whether you have the same sense of risk when it comes to your finances? We can help you find out. After you sign up for Vitamin, we’ll guide you through a questionnaire that helps you and us identify your risk profile. Take a look and start today! We have made it super easy so that you and many women like you don’t wait any longer.
7. Stocks, ETFs, Diversification, and Compound Interest – Understand the Basic Concepts of Long-Term Investing
You may already know for example that ETFs are baskets of stocks, bonds, or other assets that trade on the stock market. If you’re still relatively new to all this, take advantage of our many free learning formats. At Vitamin, you’ll not only find many free financial tools to download, but also the Vitamin Masterclass, a free online course divided into 30 short and interactive videos. It has been developed by financial experts to make sure that you have the basics that you need to take your finances into your hand and change your financial future for the better.
8. Choose the right ETFs
There are many ETFs with different investment objectives and risk profiles. You should therefore choose the ETFs that fit your financial goals and risk tolerance.
You’ve already looked into the wide variety of ETFs, but still have no idea based on which criteria you should choose ETFs for your portfolio? This is exactly the step where many investing newbies get stuck. That’s why we at Vitamin are making investing as easy as possible by building you a little bridge over the known stumbling blocks. At Vitamin our financial experts have created customised and broadly diversified ETF portfolios with SRI (Socially Responsible Investing) screening just for you. Basically, we have gone through hundreds of ETFs to pick the ones we believe in most and make sure you can invest in them too.
9. Staying Up To Date
It is important to stay abreast of current developments in the financial markets and the economy in general in order to make informed investment decisions. However, long-term investing, as we do at Vitamin, doesn’t require you to constantly make financial decisions that impact your investment. Instead, the information helps you understand what’s happening in the market and stay calm when prices go down. We take care of the rest because if your portfolio ever deviates significantly from your target portfolio and risk-return profile due to market fluctuations, we rebalance your investment plan.
10. Seek for advice
It can be helpful to get advice from a professional financial expert to get clarity about your goals and how to achieve them, as well as how to start investing. However, you should make sure that they act in your best interest. It is always best if you have acquired the knowledge yourself to make confident financial decisions. Our free masterclass or individual financial coaching can help you with this. If you need some quick help, know that once you register on Vitamin, you can also book a 15 minute session with one of our financial experts who will be happy to help answer any top-of-mind questions on your finances or our Vitamin offering. Give it a try!
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