Your first hundred euros
What to decide before you press 'buy' for the first time, in the right order.
The order that matters
Before investing come three things: expensive debt paid off, an emergency reserve built up, and a clear time horizon for whatever is left.
High-interest debt is the best guaranteed investment you will ever find. Paying off a credit card charging 18% is an 18% return with zero risk. No stock can promise you that.
Only once those three are in place does the question 'what should I buy?' become useful. Before that, it is just a distraction.
Why the first one should be boring
Your first investment has a job that has nothing to do with returns: to teach you what it feels like to hold something that swings, without ruining you if it feels bad.
That is why a broad, cheap index fund is the usual starting point. Not because it earns more, but because the mistakes you can make with it are small and fixable.
Individual stocks, crypto, and leveraged products can come later, once you have a base and a clear idea of how much you are prepared to lose.
The mistakes everyone makes
The first is checking the price every day. It changes nothing, and only raises the odds that you act in a panic. A long-term portfolio does not need looking at more than a few times a year.
The second is chasing whatever just went up a lot. By the time something is in all the headlines, the price already has that attention baked in.
The third is changing the plan every time your mood changes. An average plan followed for ten years can beat a brilliant plan abandoned after six months.
The order of operations
| Step | What you do | Why it comes first |
|---|---|---|
| 1 | Pay off expensive debt | A guaranteed return, with no risk |
| 2 | Build your reserve | It keeps you from selling in a panic |
| 3 | Invest what remains | Only money you won't need for years |
Key terms in this lesson
- Asset allocation
- How you split your money across types of investments. The decision that explains most of your result.
- Risk tolerance
- How big a fall you can sit through without changing the plan. Measured by behaviour, not by intention.
- Portfolio
- Everything you own, viewed as a single whole.
Quick check
You have a credit card charging 18% interest and €1,000 to invest. What is the best choice?
Progress is saved on this device only.