Investing: a must-have for everyone
Investing means putting money into financial or other assets with the expectation of potential growth or future income.
Investing starts with choosing a financial goal.
After all, we do not need money for its own sake. We need it to live a long and happy life and to have everything we need in life.
Regular investing is what allows us to gradually save and grow part of our current income.
Why invest?
Investing can help with the following goals:
I. Saving the required amount for a specific financial goal.
When existing savings are not enough, there is a need to increase them and shorten the time needed to save the required amount. Examples of financial goals include:
Housing. Saving for a down payment on a mortgage, or for buying or renovating a home.
Large future expenses. A car or another major purchase or event known in advance.
Children. Education or start-up capital.
Retirement. Building personal retirement capital that will supplement the state pension in the future.
II. Protecting money from inflation
When we have spare money that is not being used and has no planned purpose, it needs protection against losing value.
This is because cash or money held in an account that remains idle gradually loses its purchasing power.
Inflation stood at 3.1% in August 2026. Harmonised inflation (HICP) for 2026 will be approximately 4.3%.
For example, €10,000 today will be worth €6,648.33 in 10 years at 4% inflation. After 20 years, only €4,420.02 will remain of €10,000.
Term-deposit returns do not cover the rate of inflation, so using them as a tool to protect money makes no sense.
III. Building capital
Once our basic needs are covered, we use investing to build and grow family capital that will be passed on to future generations.
The investment triangle
Every investment requires finding a balance between three parameters:
risk ↔ potential return ↔ liquidity
There is no investment that guarantees everything: low risk, high return and high liquidity.
High potential returns are usually associated with higher risk or less access to the money.
Risk management
Risk is managed through diversification — spreading money across different assets, regions and sectors.
A diversified portfolio does not depend on a single market-development scenario.
Investment horizon
Investment horizon is the period for which you plan to keep your money invested.
The longer the horizon, the more time there is to withstand short-term market fluctuations.
What to do before investing?
When planning investments, it is important to see the financial picture as a whole. That is why it is worth consulting a professional and carrying out a financial analysis:
- 1. Income and expenses How much money is actually left each month?
- 2. Financial reserve Do you have money for unexpected situations?
- 3. Other assets Real estate, bank accounts, deposits, existing investments and so on.
- 4. Liabilities Loans, mortgages and other financial obligations.
- 5. Financial goals What do you need the money for, and when?
Financial analysis and taking individual circumstances into account are the foundation for creating an effective investment strategy.
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