How to start investing with a small amount of money
At a glance:
• Starting to invest early allows you to benefit from compound interest, build confidence, and achieve financial independence.
• Before investing, it is important to understand your personal finances, create an emergency fund and set clear goals.
• Products such as ETFs, funds and shares allow you to diversify and grow your investments.
Inês had always been curious about investing and had hoped to start when she turned 20. She had a stable job and some savings. But there was just one problem.
Traditional term deposit rates weren't particularly tempting, and large-scale investments in property or cryptocurrencies seemed out of reach, requiring a level of attention (and money) that she didn't have. What should she do?
Her goal was simple: to understand how investments in shares, ETFs or investment funds worked. She set aside a portion of her salary – nothing extraordinary – that had no impact on her day-to-day life, and chose an investment platform.
Some time later, she began to realise the impact that real-world events, such as news stories, changes in the law, or rumours had on her portfolio. She watched the numbers rise and fall, and then rise again. She had to resist the urge to sell when prices were falling, as well as the urge to buy more when prices were rising. Gradually, she gained the confidence to set herself clear financial goals, such as setting up an emergency fund, saving up for travel and planning a long-term personal project. This didn’t happen immediately, but it was achievable.
Inês doesn’t exist, but she may sound familiar. You may well have been in the same position yourself, or you may know someone who started out in this area with little experience. That’s normal, because all you need to get started is information, curiosity, and to take the first step.
Would you like to start investing at 20 and make your savings work for you? Find out how to take your first steps.
Why start investing now?
Did you know that investing is like playing a sport? There are several reasons why the sooner you start, the better.
1. Time is on your side
The sooner you start investing, the more time your money has to grow – quite literally! Compound interest can make even small investments grow over time. Furthermore, market volatility tends to become less pronounced over time: in the long term, fluctuations tend to even out, thereby reducing the impact of short-term ones. It’s a case of the snowball effect: it starts off small but quickly gains momentum and benefits from sustained growth in the equity markets over time.
2. You learn more (and make mistakes when it’s still cheap)
If you invest early, you can experiment, learn and even fail when there is still time to recover. When you’re 20, you have room to test strategies and gain financial literacy without too much pressure.
3. You can build financial independence
Investing isn’t just about "making money”; it's about achieving financial freedom. If you start now, you'll have more choices in the future: you can live where you want, work in a job you like, or simply not have to depend on anyone.
How to start investing: going from zero to your first investment
While you don't need to be an expert or have a lot of capital to get started, you do need a strategy. Let’s address each issue in turn.
1. Start by understanding your financial situation
Before deciding where to invest your money, it is important to have a clear understanding of how much you have, how much you earn, how much you spend, and how much you can save. The aim here is not to create the perfect budget, but to establish whether you can invest any money each month, no matter how small the amount. As a general rule, try to save at least 10% of your monthly income. If this isn’t possible, start with a fixed amount that you are comfortable with. The important thing is to be consistent.
2. Set up an emergency fund
Before you start investing, there is one important step you should take: set up an emergency fund. Ideally, you should save up enough to cover three to six months’ worth of your fixed expenses, but don’t worry too much about the exact amount. Deposit this amount in a separate, easily accessible account. However, be aware that this money is not intended for investment or generating returns. Its purpose is to provide financial stability and liquidity.
3. Set clear goals
Now that you have a clear overview of your finances and some spare funds to invest, ask yourself this question: "Why do I want to invest?”
Your goal could be to buy a house in ten years’ time, to take a dream holiday, become financially independent by the time you’re forty, or simply ensure your money doesn’t lose value over time. Having a goal, even if it changes over time, helps you make better choices about where and how much to invest.
4. Define time horizons
Once you have set your goals, ask yourself when you will need the money. It is important to distinguish between short-term goals (up to three years), medium-term goals (three to five years) and long-term goals (more than five years).
Each time horizon involves different levels of risk and directly influences the choice of products in which you will invest.
5. Learn the basics (without getting lost on YouTube)
While you don’t need to be an expert on financial markets, you should have a solid knowledge base. This means understanding what shares, bonds, and investment funds are, grasping the concept of risk, and familiarising yourself with how compound interest works.
There is plenty of free, easy-to-follow content available online. The most important thing is to build your confidence in using basic vocabulary. To this end, we offer specialised editorial content, including insights and a glossary. Podcasts and YouTube channels focusing on financial literacy are also an excellent starting point for structured and informed learning.
6. Start with small amounts and regular top-ups
You don't need to invest large sums to get started. Investing small amounts such as €50 or €100 each month is enough to learn the ropes and make it a habit.
Many investors opt for a strategy known as dollar-cost averaging, which involves investing the same amount every month. This reduces the impact of market volatility and helps investors avoid making emotional decisions.
7. Be consistent
Investing is an ongoing process. Set aside an "investment day” each month, arrange automatic transfers where possible, and review your portfolio regularly to ensure that it is still aligned with your goals.
Remember that it's better to invest small amounts regularly, rather than waiting until you have a ‘large sum’ and never getting started.
8. When you’re ready to start, GoBulling Investor is here to help
GoBulling Investor is the ideal platform for those looking to take their first steps in investing, offering a simple, intuitive and secure experience. Designed with the new generation in mind, it enables you to invest in shares, ETFs, and investment funds via a modern, user-friendly interface on your mobile phone, tablet or computer. You can explore the demo version to test strategies, or open a real account and start achieving your financial goals at your own pace and with complete control. Access is available via browser and app for Android and iOS.
Take the first step: product suggestions for getting started with investing
There are several ways to start investing, even if you have limited funds. The most important thing is to select products that are suitable for your profile and your goals.
ETFs (Exchange Traded Funds)
ETFs are one of the most popular options for beginners. These are investment funds that track indices, such as the S&P 500 (which comprises the 500 largest listed companies in the US), and the MSCI World Index (which includes over 1,500 large- and medium-sized companies from developed countries).
What are the advantages? They allow you to invest in hundreds of companies with just one product and minimal funds. They are ideal for those looking to diversify their portfolio and grow their wealth over the long term, and reduce monitoring and costs.
Investment funds
Investment funds are a type of investment in which money from multiple investors is pooled and invested in various assets, such as shares, bonds, and other financial instruments. These funds are managed by professionals, with investment decisions made according to a defined strategy and the chosen level of risk. These funds are ideal for beginners as they allow you to invest in a diversified manner without having to select individual companies or assets. There are often no transaction costs for subscriptions and redemptions, either. This feature makes them ideal for smaller investments and for those who want to start with a small amount and increase their investment gradually over time.
Shares
Shares enable you to invest directly in companies such as Apple, Nike and EDP, and generate income from increases in their value or dividends. They carry more risk and require more knowledge. If you're just starting out, make sure you do plenty of research before you buy. We recommend that shares should only represent a small proportion of your investment portfolio.
REITs
REITs are listed property investment funds. These funds allow you to invest in the real estate sector – including shopping centres, offices and hotels –without having to purchase property directly. They typically pay regular dividends and are a good way to diversify your investments.
Bonds
Bonds are debt securities issued by companies or governments. When you purchase a bond, you are lending money in exchange for fixed or variable interest payments, which are often defined in advance. For example, interest payments may be indexed to the Euribor rate. Although bonds are less risky than shares, they also offer less potential for growth. They are useful for balancing a portfolio and reducing its volatility. This makes them a good option for more conservative investors.
Start investing with Banco Carregosa NextGen
Making an early investment is one of the best decisions you can make. The initial amount is not important. What matters is having a strategy and being consistent.
The Banco Carregosa NextGen project is here to support you every step of the way. It provides everything you need to grow with confidence, from simple tools and professional support to solutions designed for young investors.
Frequently asked questions about early investment
Before you start investing, it is important to consider the following essential questions.
How much money do I need to start investing?
You don't need much capital to get started. Many investors begin by investing €50 or €100 each month. What matters most is being regular and consistent over time.
When you are just starting out, is it better to invest in ETFs, funds or shares?
For those new to investing, ETFs and investment funds are generally considered to be the better option, as they offer diversification and easier management. However, it is important to bear in mind that these instruments have different cost structures. Investment funds are generally better suited to smaller investments and regular top-ups, while ETFs are better suited to those who trade less frequently and invest larger sums. Shares may be a good option at a later stage, once you have gained more knowledge and experience, and are ready to take on more active portfolio management.
Do you need a lot of knowledge to start investing?
You don't need to be an expert. Gaining a solid understanding of key financial products and committing to ongoing learning will give you the confidence you need to get started.