Choose the investment

Below, you will find a few questions. By answering them, you will hopefully gain some insight to which investments that are suitable for you right now, based on your needs and preferences.


How much money to you wish to invest, and is it a lump sum or a monthly amount?

Do you have a lump sum to invest, or are you looking to invest regularly, e.g. once a week or once a month?


Certain assets require a rather big lump sum investment. It is for instance common for even a single corporate bond to be quite pricey. Another example is real estate, where even those who have been offered a mortgage normally have to put down a substantial down-payment.


Other investments do not require a big lump sum payment, and will be available to you even if you only have a small lump sum to invest or if you wish to invest a small weekly or monthly amount. There are many online brokers that will help you if you want to make small investments in shares, mutual funds, etc.


If your income is irregular, e.g. because you are self-employed or in a seasonal business, it can be a good idea to look for flexible investment options where you don’t have to contribute the same amount each month.


What’s the goal and time frame for your investment?

When will you need the money you invest today? There are quite a few investment opportunities that are only available if you are okay with committing for a certain amount of time, or at least pay a rather hefty fee if you want to withdraw your money prematurely.


Also, there are certain investments that are unwise if you know that you might need the money rather soon. You may for instance be offered by purchase real estate in an area that you believe is up and coming, but what will happen if you desperately need to sell that real estate next year? Will there be someone to sell to that also see this as an up and coming area?


So, before you make any investment, it is a good idea to decide what the goal is. Is this just a nest egg for a rainy day, or do you have special plans for your investment? The ultimate goal for your investment can impact your willingness to take risks as well as the time frame for the investment.


If you are investing in order to travel the world for 6 months, you might be okay with making really risky short-term investments, because the worst thing that could happen is that you will have to cancel or postpone your trip. Also, you are probably okay with taking higher risks if it means that you can get together enough money for the trip sooner rather than later. If you, on the other hand, are saving to be able to stay in your current home when you retire 10 years into the future, taking high risks might feel less tempting.


It is also important to take into account that sometimes goals will change. You might start out doing monthly investments hoping to scrunch together enough money to travel the world for a year, but then circumstances changes and you decide to devote your investment to paying for flight lessons instead, or buying a house, or starting your own business. Don’t be too stubborn to change your investment portfolio as your goals changes.


There are also many cases where an investment portfolio needs to be adjusted even though the goal is still the same as when the portfolio was first created. If you are investing with the hopes of paying for your child’s college education, the investment portfolio that is a great choice when the child is 2 years old might not be suitable at all when the child is 16 years old.


What are your values?

Most of us have values that we cherish, and one way of making an impact on the world is to allow our values to influence our investment decisions. We can use our money to help fund research and development in interesting start-ups, we can avoid putting our money into sectors that goes against our values, and so on.


Do you want or need an income from your investment?

Many people see investments as something that is essentially based on the principle of eventually selling the asset for more than what you paid for it. While this is a common method for making money from investments, it is not the only one. There are actually quite a lot of investments that can bring you an income while you still own the asset.


One example is shares in a company that pays dividends. Dividends are payments made from the company to the shareholders. Mature and well-established companies are the ones most likely to make regular dividend payments, since start-ups are more likely to retain the profits within the company and use them for expanding the business.


Other examples of investments that are popular among those who seek a regular income from their investment are corporate bond funds, annuities, and rentable real estate.


How does this investment fit in with your other investments and responsibilities?

If you already have made other investments, your new investment should be reviewed in light of those previous investments that you are still holding on to. Will this new investment serve to diversify your total investment portfolio? Are any of your existing investments giving you the opportunity to make an especially favorable investment, e.g. through a dividend reinvestment program? Have you received stock options that you wish to use to actually buy shares?


It is also true that if you are already sitting on substantial low-risk investments, you might be okay with doing a few medium-risk or even high-risk investments now, especially if it means creating a more diversified investment portfolio.



It is always a good idea to check out how a certain investment or investments would impact you from a tax perspective. Some investments are more favorable treated than others when it comes to paying taxes, and it is even possible to use certain investments to decrease tax payments.



Some investments come with more liabilities than others. Owning real estate is for instance a much greater responsibility than owning units of a mutual fund. .