Investing is an increasingly important tool for ensuring financial stability and building long-term appreciation. Yet many people still hesitate over this question: What percentage of my income should I invest? There is no universal answer to this question—it depends on our life goals, financial situation, and current economic conditions—but experts agree on a few basic principles that we should follow.
Experts recommend that people set aside 10-20% of their income for investment. For example, if we earn EUR 2,000 per month, we should ideally invest EUR 200 to EUR 400.
For those who are just starting to invest, it is useful to follow simple rules, such as the 70:20:10 method. According to this principle, our monthly income should be divided as follows:
- 70% of income should go towards basic expenses such as housing, utilities, food, and transportation.
- 20% of our income should go towards leisure activities, hobbies, vacations, and other non-budgetary expenses.
- 10% of our income should be set aside for the future—for savings and investments.
This rule is especially useful for those who are just starting out with financial planning. However, if we can afford to invest more than 10%, it is advisable to increase this share and approach the upper limit of 20%.
One of the key factors that should influence your investment decisions is your age and stage of life:
- Under 30: Young people have the most time to recover from potential losses, so it is recommended to invest more aggressively, for example, 15-25% of income. This approach involves greater exposure to stocks and other growth assets.
- 30-50 years old: At this stage, our investment strategy should be balanced. This means 10-20% of income, with part of the portfolio going into safer assets such as bonds or real estate.
- 50+: The closer we are to retirement, the more conservative our portfolio should be. It is recommended to invest
