How to Invest Safely

If you are already clear about your expenses and have identified opportunities, as we mentioned in the article Personal Finance for Humans, Not GurusNow it's time to take the next step: grow your money through investments. Investing isn't just for experts; anyone can do it if they understand the basics, choose safe options, and practice consistently. We'll keep you posted on MORE LATIN.

Types of Investments According to Risk

There are many ways to invest your money, but not all carry the same level of risk. Some investments are more stable, while others can yield higher returns, albeit with the risk of losing money. Here we explain the main options:

Low Risk Investments (safer, but with lower returns)

• Savings accounts and banking instruments: You keep your money in the bank and earn a small amount of interest over time. It's the safest option, but it also generates the least amount of money.
• Government bonds: You lend money to the government, and in return, they pay you interest over a set period of time. It's a stable and reliable investment.
• Conservative investment funds: Your money is invested in several safe options at the same time, reducing risk and giving you a moderate return.

Medium Risk Investments (higher returns, moderate risk)

• Index funds and ETFs: These are investment groups that track the stock market. Since your money is spread across many companies, risk is reduced and returns can be consistent over time.
• Real estate: Buying houses, apartments, or land can be a good investment. You can make money by selling them for a higher price in the future or renting them out for monthly income.

High Risk Investments (higher returns, but can lose value quickly)

• Individual actions: You buy shares of a company and make money if its value increases. But if the company loses value, you can also lose money.
• Cryptocurrencies: They are digital currencies like Bitcoin. Their price rises and falls very quickly, so this investment can make you a lot of money or lose it quickly.
• Startups and own businesses: Investing in a startup or starting your own business can be very profitable if everything goes well, but it's also risky because there's no guarantee of success.

How to Start Investing

1. Get informed before you invest. Don't put your money into an investment you don't understand.
2. Start small. You don't need a lot of money to get started. Try small investments while you learn.
3. Use apps to practice. There are apps like Investr, Trading 212 or eToro that allow you to invest with fake money so you can see how the market works without risking real money.
4. Diversify your investments. Don't put all your money in one place. If one investment fails, others can make up for it.
5. Think long term. Investing won't make you rich overnight. The key is to let your money grow over time.

Investing is the next step to improving your personal finances and making your money grow on its own. You don't need to be an expert; just start with safe options and learn little by little.

References:

Communications. (2025, January 14). What Is Saving and How to Save Better. BBVA NEWS.

Finhabits. (2024, May 1). 4 Simple Tips to Start Investing.