The news got, let’s say, weirder as we entered 2021. Gamestonks, Reddit, WallStreetBros - did you really ever think they would be relevant to you? Nope - same! What it did do however was point out an interesting means of passive income for freelancers and the self-employed who may find they have some to invest at a high point. No enterprise or person could advise another they should invest, but we want to take out some of the mystery of it in lights of the GameStop/AMC saga of 2021.
As many of us are now grappling with the long term unknowns of the Corona crisis it was indeed surprising to find our lives blanketed with news of the stock market. It is in fact something many of us as independent freelancers or self-employed people do not consider often because we have very little access to the market, not always due to a lack of funds but rather a lack of knowledge as to what it is even about.
There are actually a great deal of options when it comes to being a business and enhancing cash holdings through things like term-deposits or interest earnings accounts. This is very much in line with what is available personally. Beyond that, we are going to review some key concepts and options for you to consider as a potential investor. No GameStonks though - you'll have to follow Elon Musk on Twitter if you want terrible financial advice. We joke!
Real estate, stocks, ETFs. Like, what? Well, basically all of these constitute an investment strategy. After educating yourself only you choose what is right for you. Some investors swear by real estate, others by gold. And anyone who is familiar with the art world trades in paintings.
In doing this or essentially, in essence, collecting valuable commodities that increase in value over time, you are participating in securities investments and this allows you to concentrate on building up wealth with the help of securities.
Exchange-Traded Funds (ETF)
For a long-term investment strategy and asset accumulation, there is a good motivation for ‘’beginners’’ and those looking to take smaller risks than say buying an apartment or similar. The big advantage compared to real estate: You can sell ETFs at any time without any problems. Not a house. A second big plus: You can invest in ETFs from as little as 25 euros per month. A small sum with a big impact.
An ETF ("Exchange Traded Fund") is an exchange-traded index fund that tracks the performance of an index such as the DAX. The DAX is an index that tracks the 30 largest listed companies in Germany. It is not a share, but a collection of shares or a display of them. There are funds that track these indices - such as a DAX ETF.
Basically, ETFs combine the advantages of stocks and funds in one product. A mutual fund is a collection point for investment funds. To put it bluntly, many investors pool their money and give a professional (fund manager) the task of investing the capital as profitably and widely diversified as possible within the framework of a given investment strategy.
ETFs enable you to invest cost-effectively in entire markets with one security. In addition to stocks, you can invest in many other asset classes with ETFs. Because of this diversity, ETFs are perfect building blocks for private investments. ETFs simply replicate a market index one-to-one and - like a share - can be traded on the stock exchange at any time.