While speaking with a business owner, I once heard the following statement:
“I don’t withdraw money from my company because I wouldn’t know where to invest it.”
But is it really that difficult to find where to put your extra money? It often feels like everyone is offering their own investment “plans.”
When deciding to start investing, an individual needs to make two key decisions:
- which investment platform to use
- what financial instruments to invest in
Since both of these topics are broad and complex, this article will cover the basics.
Which Investment Platform Should You Choose?
Most beginner investors choose one of two options:
Investing through banks
Traditional banks offer a simple way to start investing. They often provide ready-made investment solutions, making it easier to decide where to invest.
Investing through platforms (“fintech”)
An alternative to banks is investment platforms, which allow you to:
- start investing with small amounts
- pay low or no fees
- access a wider range of financial instruments
Different Types of Investors and When to Choose Each Option
Let’s categorize different investment levels:
Level 1 – Simple investing for beginners
At this level, investors typically:
- use bank services
- invest in funds
- choose automated investing solutions
It’s worth noting that:
- fees can be higher
- some investment products may offer lower diversification
This category may also include life or health insurance products with an investment component offered by financial institutions.
Beginner investors can also use automatic investing, which allows them to invest a fixed amount regularly from their bank account.
However, keep in mind:
- some investment products may have higher fees
- diversification may be limited
Before you start investing, it is important to understand the tax implications – this is something we cover during tax consultations.
This option is most suitable for individuals:
- investing small monthly amounts
- with no prior investment experience
Level 2 – Self-directed investing through platforms
At this level, investors use investment platforms that are more flexible and offer a wider range of options.
Available instruments include:
- individual stocks
- ETFs (exchange-traded funds)
- bonds
- commodity ETFs
This type of investing requires:
- investment experience
- analytical skills
- understanding of financial markets
- ability to assess risk
What Should You Invest In as a Beginner?
One of the simplest and relatively “safer” options for beginners is investing in a global ETF – essentially investing in the entire market.
Historically, global markets have delivered an average return of around 8% per year, although returns are not guaranteed.
By investing broadly, you can gradually build your knowledge in:
- how ETFs work
- market returns
- financial behavior and psychology
Over time, this helps you decide what kind of investment portfolio suits your needs.
Why Should You Start Investing?
Becoming an investor today is easier than ever. In my opinion, investing is becoming a necessity due to demographic and economic trends.
When choosing how to invest, you should consider:
- your financial goals
- how much time you can dedicate
- how deeply you want to understand the process
The most important rule is this – investing is a long-term process. It should become a habit. There are no quick or easy profits in investing.
Consultations
If you want to clearly understand your financial situation, we invite you to consult with us on tax and financial matters.
Important Information
The information provided in this article is of a general nature and should not be considered investment advice, an offer to invest, or personalized financial consultation. Before making investment decisions, evaluate your individual situation or consult a professional.
Prepared by E. Vitkauskas
Head of Financial and Accounting Digitalization Department
UAB Aurita
