You may have heard the notion that investing is mostly for the wealthy. An average earner who can set aside only a few dozen euros a month supposedly can’t benefit from it.

That’s why many people avoid investing or keep postponing it. We tell ourselves we’ll first save €5,000 in a savings account and only then consider investing.

Don’t Turn Heating On with an Opened Window

This savings approach has a big flaw that costs us money. Inflation steadily erodes the value of cash in the bank; the longer we leave it sitting in a quick deposit account, the further we push our goals away. It’s like heating your home with the window open. Some rooms will get warm, but at what cost in time and energy?

You “close the window” the moment you start investing. If you invest consistently over time, your deposits can earn returns that help protect you from inflation and grow your wealth in real terms. The key is to put your money to work as early as possible.

Good investment strategy is to spread your money across many companies, so a single negative event doesn’t wipe out your savings. In the past, achieving that diversification required a larger sum.

Modern technology has removed that barrier. Today, you can buy a globally diversified portfolio containing thousands of companies around the world. All you need is as little as €10 a month. Here’s why it’s a great idea to start even with a small amount.

Low-Stress Investing “Training”

Smaller amounts aren’t a drawback. On the contrary: they’re one of the best ways to gain practical, low-stress experience. Markets move up and down. Some years lift your balance; others (for example during recessions) drag it down.

In those moments, the most important thing is to stay calm and wait for the recovery. Patience is the key to successful investing. You will encounter downturns along the way, and panicking and selling is the worst possible reaction.

It’s easier to build that resilience if you start with regular, smaller contributions. Any market dips won’t feel as painful as if you’d jumped in with €5,000 or €10,000 at once.

 You can see this on the transparent account of Dominik Hrbatý, who began investing €100 per month in 2018 into Finax’s 100% equity portfolio to fund his daughter’s education. In March 2020, when the Covid-19 pandemic hit, his account fell by under €200, however, on the chart it looked like a small blip.

That’s psychologically much easier than investing €10,000 in one go and then watching it drop by €3,000. In the latter case, you might sell at a loss and never come back to investing.

By starting small, you’ll see that market swings tend to recover over time and aren’t a reason for panic selling, which is harmful in the long run. You’ll also build a crucial investor trait: the discipline to regularly set aside a small portion of your income.

The Magic of Compound Interest

Most of us invest to grow our wealth, so we can afford a comfortable retirement, a home, or our children’s education. Smaller monthly amounts can be extremely powerful. Thanks to compound interest and patience, the results may pleasantly surprise you.

Think of compound interest like rolling a snowball. It starts small, and as the surface area grows, each turn makes it bigger faster. Investing works the same way: not only your deposits, but also your gains start earning gains. The longer you invest, the more your account tends to grow on average each year. That’s why even small amounts can build significant wealth.

Here’s a practical example to show you how much you could earn by investing regularly for 30 years with an average annual real (after-inflation) return of 6%. Using figures adjusted for inflation shows results in today’s prices so it’s easier to imagine what goods and services that money could buy.

A simple standing order of €20 a month can build roughly €20,000 over 30 years. In retirement, that could cover a home renovation and still leave room to help your children or travel - freedoms that would be hard to achieve relying solely on a state pension. And it happens without any unnecessary hassle.

Go a step further with €50 or €100 a month, and you’re looking at a far more comfortable retirement. Picture having €50,000 to €100,000 on your investment account. How would that change your life?

From Worries to Well-Earned Freedom

The numbers are clear: in investing, time is the strongest factor, not your starting sum. Your real capital is the discipline to invest regularly, even small amounts, a long time horizon.

Don’t put it off until tomorrow when your money can start working today. Create your Finax investment plan and take your first step toward financial freedom from just €10 a month.

We’ve designed our products to be as convenient as possible. You can open an account in about 10 minutes, set up a standing order, and then watch your money work while you relax.

Create an account and start investing today

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