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Investments in Spain

Before thinking about investing in Spain…
It is important that you take into account certain aspects and concepts that will guide you in your decision to invest money.

Do you know what kind of investor you are?
To know what kind of investor you are you must know to what extent you are willing to risk your money. Although it is not so simple, since elements that are difficult to quantify and others that are subjective may influence, knowing your financial profile will help you to know the most convenient investment for you.

The investor profile will indicate the relationship between the risk you are willing to assume and the returns you expect to obtain. Bearing this in mind, the investment profiles are

Risky: This is the investor who already knows and controls the financial world, is willing to risk his capital with the possibility of obtaining a higher return. Normally he will invest money in variable income with short or very short terms.
Conservative: An investor who will prefer to keep his capital safe even if this means a lower return. He is going to invest in fixed income and they are usually medium-long term.
Moderate: This investor is between the risky and the conservative, because he wants to receive more profitability but without risking too much. His investments in fixed income and variable income will be similar, and in the medium term.
And you, what kind of investor are you?

Is it possible to investing in Spain without risk?
No, definitely not.

Investment risk will never be zero. All investments have some risk, but what we can do is to reduce it by choosing products with low risk.

Are you going to get money fast investing in Spain?
I’m sorry to inform you that if this is your intention, this is not for you.

No, you’re not going to make any quick money. Some investments will generate the first income after a few months, others after a few years, depending on which option you choose.

Remember that investments can also depend on macroeconomic factors and other factors external to us.

How do I choose the right option to invest my money?
This decision is personal and will depend on the study you have made of your investment options. This study is done to find out the main characteristics such as risk, return or degree of liquidity.

You also have to think about how much money you are willing to risk, what your economic objectives are, what knowledge you have and your preferences in terms of investment control.

If you are a bit lost, don’t worry, it’s normal. I recommend that you visit the website of the Organization of Consumers and Users (OCU). In their section on investments, they have prepared a tool that advises you which investment best meets your needs. Find out about this tool by clicking here.

Investing in Spain. Tips and tricks

How much money should you invest?
As I said above, all investments have risk, some more than others, there is even the risk of losing everything.

Therefore, you should only invest the extra money you have saved and can afford to lose without it affecting your life. In other words, my advice is to only invest the money you have left over after covering your basic needs in the future.

Must you invest all your money in one place?
I recommend that you create a diversified investment portfolio.

This means that you should allocate different amounts to different options, because this reduces the risk of loss. If one investment fails you have others that can give you returns.

Below you will find a list I have prepared with the best options where to invest money.

  1. Investment funds
    Investment funds consist of pooling investors’ funds to invest them in different assets, which can be shares, bonds,…

This investment is managed by a professional.

There are different investment funds that we can access, according to our profile as investors (conservative, moderate, risky) and the return we wish to obtain.

In recent years, this type of investment can also be made with robo advisors. Robo advisors are “robot advisors” who are responsible for managing your assets in an automated way according to your investor profile. Do you want to know which investor you are and which plan is right for you? In less than two minutes you will find out with this test.

  1. Investing in Shares
    Shares are securities that some companies issue in order to finance themselves. People who own them get certain rights, such as receiving dividends if the issuing company decides to distribute them and make a profit.

Investing in stocks is buying these securities and then selling them at a higher price and/or receiving dividends.

Normally, stocks are sold quickly, which makes this a highly liquid investment. It also has a high potential for profitability in the medium or long term.

However, it has a high risk on investing in Spain in such mode, as this market is highly volatile and is affected by economic, political or social factors that influence the price of shares.

Although you do not need to have a lot of capital, you should take into account the payment of commissions to a professional for each operation (to assess whether it is profitable or not a small investment, for example). In the case that you want to do it on your own, for you to make a correct investment in shares it is necessary to have knowledge in this field.

  1. Real estate or property
    This investment of money consists of buying a property, it can be a house, an apartment, a commercial premise or land, and then selling it at a higher price, and/or renting it and obtaining a rent.

Although it may seem a simple operation, it is necessary to have good capital for this investment and also good knowledge of the market to be able to choose correctly the property to be bought.

On the other hand, it is a safe investment with a low risk and profitable, it is difficult for the real estate to lose value over time, and in the case they lose it, it increases again.

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