Achieving financial security requires that the most important standard—the accessibility of money—is met. You must have daily access to funds. Therefore, it is best to keep your money in a safe or invest it in a cash fund. You should not take any risks until you achieve financial security. Consequently, you should choose low-risk investment projects. However, even so, you must pay attention to managing potential risks. Never put all your money into a single investment project, even if “all your funds” only total 1,000 Euros. Remember, managing risk means increasing the opportunity for profit. Before achieving financial security, keep financial safety at the center of your focus. You should tolerate a low profit rate and keep some cash in a bank savings account. If you still want to invest, I recommend a deposit plan.
The 40:40:20 Principle Guarantees Financial Safety To achieve financial security, you must change the allocation ratio of your money. Although the majority of the money must still be placed in low-risk investments, you can allocate 40% to moderately risky investments. If you hold this money long-term, the risk will be greatly reduced through the effect of “average cost return” (or “average cost averaging”). The remaining 20% can be invested in high-risk projects, which involves speculative funds such as emerging market funds or national funds, as well as all special funds and equity funds. The risk of these funds can also be reduced over time through the effect of “average cost return.” On the other hand, your probability of profit is extremely high. One crucial point is: you absolutely must not invest the money intended to guarantee your financial safety into high-risk or speculative projects. You must not touch this money. The investments you make must guarantee that your financial safety will never be compromised.