The 9 Most Important Aspects of Your Investment

Whether you want to invest a smaller or larger sum, in a one-time payment or regularly in instalments, it is important to understand the basic rules of our monetary and economic system. In this article, we will tell you the most important points you should pay attention to and how we as independent financial advisors can support you in reaching your financial goals.

1. Inflation

The number one requirement for a successful investment: beating inflation. The only way to generate profit for real, is when returns from your investment are higher than inflation. Anything else is a loss of capital. 

 2. Historical Development of Currencies

Our current monetary system developed in 1971 as a result of President Nixon declaring the end of the gold standard. The chart below shows how much currencies have lost in value in comparison to gold. 

 3. The European Central Bank’s (ECB) Total Assets

When the Euro was introduced in 2003, ECB’s total assets were at ca. 0,83 billion eros. By the beginning of 2020 it had risen to €4,5 billion, and after the Covid-19 pandemic in 2023 it amounted to about €8 billion. In comparison to 2003, the amount of money in circulation is eight times as big.

Here you can see, how the ECB’s total assets have changed over the past years.

A question that comes up in this context: How will the new Central Bank Digital Currencies (CBDC) affect our current assets?

4. Material Assets

We’re living in times of high inflation and rising national debts. A solution for this is investing in material assets. Material assets are, for example, real estate, precious metals or stocks and shares. Which amount of money do you want to invest in material assets?

Alternatively, many people decide on investing in our current monetary system or bonds. The question that poses itself in this context is, how advisable an investment like this still is nowadays.

5. Sustainability Preferences

We gladly incorporate your preferences for sustainability in your investment, also regarding material assets.

6. Chances & Risks

An important principle in investment is: There is no such thing as the perfect investment; there is just a broad, well-spread diversification. Every investment has its chances and risks, and nobody can say for sure, what the best investment is going to be. A point of reference to approximately assess the risks of an investment is provided by the Summary Risk Indicator (SRI). The SRI has seven different levels, ranging from 1 (= low risk) to 7 (= high risk).

Investing is a question of time and volatility: The volatility of a long-term investment can be higher than of a short-term investment. Even if there are bumps in the road over the term, it may still outperform other investments in the end. If you plan to make a long-term investment, you can be willing to take higher risks. After all, the higher the volatility and risk, the higher the possibility of reward.

7. Tax Advantages

When investing you can make use of tax benefits, for example:

• The purchase of gold with a high level of purity (e.g. gold bars) is always tax-free.
• Silver and white metals can be purchased via duty-free depots and therefore for the net price.
• International real estate funds often lower tax rates through various VAT margin schemes.
• Bauherrenmodelle, a form of Build-to-Rent for private investors, can be written off over a period of 15 years, which offers a considerable tax benefit to Anlegerwohnungen, another form of Build-to-Rent for private investors.
• By choosing the right platform when buying ETFs, for example, for arranging private pensions, yields can be tax-free (free of Kapitalertragsteuer, KESt). This is an Austrian prerogative.
• The Gewinnfreibetrag, an annual corporate tax relief, can be invested in real estate funds or in the renewable energy

8. Getting in Contact and Meeting your Financial Advisor

We greatly value detailed, holistic advice and professional diversification. In the first meeting, we will introduce you to different investment opportunities as well as the possible chances and risks of each respective option.

You’re welcome to send us a scan of your investment portfolio or a list of your current investments in advance.

9. Long-term Support

… to reach each and every one of your investment goals.