How should a student start investing

Investing as a student - does it make sense?

Hi, I'm Dominik - founder of this blog! Together with a small (but fine) team of financial journalists, asset managers and stock market experts, I will provide you with the best content on all aspects of finance and investment.

Shouldn't I start investing my money as a student? Stick to individual stocks, equity funds, pension funds or at least stay with overnight money? You can read so much about ETFs right now, but is this right for me?

Stop! Before you can decide which asset class you want to enter, the all-important question is in the foreground:

1. Do I have money that will not be needed in the near future?

If the answer is yes: An investment definitely makes sense!
If the answer is no: Question two decides whether an investment makes sense.

2. Do I have monthly surpluses that will not be needed in the near future?

It is an absolute basic requirement that at least one question, at best both, be answered with yes. You should only invest money that is not needed for the time being. As a student, the available capital and the monthly savings rate are usually still quite manageable, but it can still be worthwhile to start early!

Benefits of getting started early

• Compound interest effect
• Gather experience
• Raise awareness of investments
• Test the risk-bearing capacity

The well-known compound interest effect is of course not to be despised. In principle, it is true that those who get on board earlier make more profit. But it is more precise: Those who get on board earlier make disproportionately more profit!
For example, if you invest € 2,000 with 20 (person A) instead of 30 (person B) with an average return of 5%, there is a clear effect.

Before I go through this example, I would like to add a few words. The most important thing is to know the most serious investment mistakes. Otherwise you can destroy a lot of money ...

So: inform first, then do it!

Get the following book while it is still being given away for free: Link to the book

The book should actually become a legal requirement before you can go public. 😉

Errors in the financial world are definitely 100 or 1,000 times as expensive.

Tip: To invest in stocks or ETFs, you need a securities account. You can find the best providers in the following overview:

I especially recommend:

So what happens if you moor earlier?

Investment capital 2000 €, 5% return

At the age of 40:

Depot value person A: € 5,307
Depot value person B: 3258 €
Difference: + 2049 €

At the age of 50:

Depot value person A: € 8,644
Depot value person B: € 5306
Difference: + 3338 €

Much more important than the financial effect, however, is that you are “forced” to start investing as a student. Making first investments and making mistakes. What happens to a student with € 2000 plays a much smaller role in the total return after many years than the same mistake with a middle-aged business person with an investment of € 50,000. This awakens an awareness of the investment and you get a certain feel for investments. What works for me Which asset class is the right one in which situation?
Before making an investment, it is very important to assess your own risk-bearing capacity. Can I live with it if my portfolio is suddenly 40% in the red? Can I stand not selling, even if “everyone else” is dropping out? You can speculate a lot in this regard, but you will only really know your own risk-bearing capacity when the scenario has occurred.

When not to get in

• Hardly any capital stock, very low savings rate

Little capital with a low savings rate is the only reason why you shouldn't get involved. Even people with a very low risk-bearing capacity should approach the subject of investing in order to become familiar with it and to be able to make wise decisions about their finances. Speculators, on the other hand, will be happy to get in and (in most cases) lose losses, but learn from these mistakes and approach future investments differently.

Typical initial situation

For the most part, students will have a very simple financial structure.
• 100% overnight money for example

It looked like this for me at the time (see The Student Depot - February 2017)
• 9.258,52 €
• 3% current account at 0% interest
• 97% money market account at 1% interest (1% up to € 5000, 0.01% from € 5000)

That gave a little over € 50 in interest per year, which corresponds to a return on total capital of 0.54%. (Return calculator)

My savings rate was unknown for a long time
• Income - Expenditure =?

The following approach is recommended (see investment calculator)

How much money is not needed in:

1. <1 year
2. 1 - 5 years
3. 5 - 12 years
4. Over 12 years

It is important here to see your own financial situation realistically. Very optimistic estimates often lead to overestimations; very pessimistic estimates will not generate an acceptable return.

Typical aspects that should be considered:
• Automobile
• Rental fee
• House building
• lifestyle
• Move
• Vacation
• Stay abroad
• Start of work

These considerations show which asset classes make sense for the different time periods.

Investments currently only make sense if there is money that will be needed in 10-15 years at the earliest. Due to the low interest rates, asset classes such as fixed-term deposits or pension funds are usually not worthwhile, as hardly more returns are generated than is the case with overnight money. Taking the risk of not being able to access your own money on a daily basis is currently not justified by the expected return! My recommendation is: overnight money + ETFs. (see article Student ETFs). The decision on the distribution of capital is therefore simplified.

Simplified scheme

1. <12 years: daily allowance

2.> 12 years: ETFs

The 12 years should be understood less as a strict limit and rather represent a tendency for how long the money will not be used. Your own estimates are of course not that accurate anyway.

Optimal case

The best case is when capital is available, something can be saved up every month and the investment horizon is well over 12 years. In this case, it is possible to continuously build wealth and get the greatest possible return. For example, if you want to start retirement provision early (which makes a lot of sense, especially for young people of the 21st century), the money can be invested for several decades without hesitation. Strong fluctuations in value can also be accepted, as the money will only be withdrawn in a few decades.

Get started in 3 steps!

Step 1: Avoid the most important mistakes!

Get my mini eBook for free (7 pages)

The 11 biggest mistakes made by students and trainees when investing

Step 2: Find out more!

for example on my website depotstudent.de.

An absolute must: Free required reading on the subject of investing *

A second absolute must:The bestseller on Amazon *

Step 3: Open your own portfolio and start investing!

Do you like it simple, cheap and want a big premium?


My asset structure at that time, income and expenses, etc. can be found below:

The Student Depot - February 2017

My transactions

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