Investments: comprehensively, clearly
What do you need to know about investing? What does investing mean?
An investment is nothing more than the part of your wealth that you direct somewhere in the hope of making a profit. There is no such thing as an “absolute best investment”, just one that is most appropriate for a given goal or client.
- How does investing generate money in the money capital market?
- Investment risk
- Diversification of investment
- Why do you need investment?
- Investment portfolio
- What to do to put together your own investment plan
- Main directions for which coverage is important to plan
In the chart below, durable consumer goods are in yellow, the S&P 500 stock index is in blue, and 3 crises are “in play” with a gray bar. The first gray bar was the Dot-com scandal, the second was the mortgage crisis, and the last was the corona virus-induced downturn.
The more safe people feel (stable workplace, predictable vision), the more they are willing to spend their money on durable consumer goods (refrigerators, cars, computers, etc.). The more people want this at home, the more they need, so the economy is spinning due to production, and prices can be exercised above. This is nicely shown in the orange graph.
The growth of the economy was, of course, also followed by the share price, as if a company is stable, investors are also more willing to take their money there. They get it back more guaranteed if needed, and there is even hope for dividends. This in turn affects the price of the shares, which the blue curve shows very nicely. Thus, investors can also win due to the rise in the exchange rate.
Durable consumer goods obviously had to be manufactured, then shipped and maintained. This is both an expense on the part of the buyer and a revenue for the companies. This revenue is also reflected in GDP, making it an integral part of a system.
A properly put together investment will ride these economic phenomena as well as waves of growth.
The figure below shows the annual returns available on the S&P 500 stock index mentioned above.
In the money and capital market, other players experience a similar rate of profit-loss, so you know that the downturn is compensated for relatively quickly by the economy. You will not be left out of this either, if you have chosen the direction of your investment with the right expertise.
One thing you should definitely know before we actually turn to investment risk:
As you can see from the graph above, there are downturns that carry the potential for loss. There is no investment without risk. You could say you won’t invest then, it will be good for all in cash. Then cash makes up 100% of your investment, but here too you take a risk. On the one hand, it can be stolen, and on the other hand, there is inflation, which slowly but surely reduces the purchase value.
First, a definition to be clear: Return on investment is the weighted average of the expected return on each asset.
The risk is no longer so tangible. No matter where you read, there are so many definitions of it. The concept itself is not very tangible, nor is it easy to describe it in every area of life.
In modern portfolio theory, we typically talk about differences and standard deviations in returns.
From here, let’s take this as a basis: risk, the variance experienced in returns.
There are many types of risks involved in an investment. This can range from timeframe risk to legal risk. These all affect your own return.
You can read the correlations between the risk and variance of a given investment in the graph below or even plott it later. You will choose from the investment options available to you in the same way, taking into account the risks and expected returns.
For you, depending on your own risk tolerance, there will be a limit that it is not advisable to choose
- below (because you have reduced your own available return, so you will not achieve as much with it as you would be able to), and
- above it would be too risky for you.
An overly risky form of investing means that you don’t know it well enough, and so you can make a bad decision about it, and it’s likely that you may achieve a negative return over time.
Once the standard deviation and yield have been discussed, let’s look at some options in light of this and place it in an imaginary coordinate at the above.
|Cash||No standard deviation||No return|
|Lottery||Almost 0 (sometimes wins, only very rarely)||-100% because you almost always lose|
|Coin tossing||100% (about the same number of heads as writing)||0 (wins once, loses once)|
|Government bond||Very small (chance of the state not paying)||2-3%|
|Venture capital fund||Very high, almost 100% (you can lose everything)||As much as the given company brings (it can be very high)|
|Equities||Large spread in the short term, more balanced over time||The average of the last 100 years has been around 10%|
|Mutual funds||Adjusts for the variance of the assets that make up the mutual fund||Adjusts for the return on the assets in it|
Looking at this map, how would you choose an investment for yourself?
Suppose you are a so-called rational investor who is trying to maximize your return while minimizing your variance.
Would you choose one that has no yield? Unlikely, at most a small part.
And one that may have a return, but is very risky and you can fall on it a lot? The answer can be similar here as well, here too one would only make a small part of one’s own money.
The option where you can no longer minimize standard deviation and where you can no longer maximize yield.
When you talk about your own investment, everyone typically means it in the area of finance, and that’s fine. You will then choose from investment instruments that provide the highest possible return with the least possible risk (and therefore safest). So you want to move on the edge of efficiency in the area of investment. This, in turn, is rarely ends up in choosing a single tool very well. By choosing from at least 2 options, you achieve diversification.
One tool of the means of spraying risk, is also recommended by financial professionals, it is called diversification.
It is the distribution between individual assets, is one of the tools of risk management.
Let’s look at a basic example to make it easier to understand. You have 4 options at the beginning of the one-year period, at the very beginning all 4 promise good prospects. By the end of the year, the yields will be as follows:
- “A” 9%
- “B” 3%
- “C” -5%
- “D” -1%
If you split your money evenly, your money would have grown by 1.5% by the end of the year. You could say you are asking for the 9%, but you could not have foreseen this, you could have chosen the -5% blindly with this method.
To reduce risk, you will not only and exclusively direct money in one direction. Thus, the individual risk and return of any financial instrument (whether a specific security or an investment fund) will no longer be so pronounced compared to the whole. Losses on one type of investment are offset by gains on other types of investments.
If you do this whole operation well, you will be able to reduce the risk of your own investment basket without substantially changing its rate of return. That is, your return is expected to remain roughly the same.
The more you spread your risk, the less striking it will be if one or two direction doesn’t perform that way. That’s why larger mutual funds not only hold the securities of a “half-basket” of companies, but even more than a hundred.
As a basic rule of thumb, as you add more and more solutions to your own portfolio, your risk decreases.
Do you remember? The return on a portfolio is the weighted average of the expected return on each asset.
Each device has its own recommended time horizon during which you are likely to be at a loss (more), and your life also has stages that you need to adjust to.
Because money needs time to work, you invest the money you need for your long-term plans in assets where you can get the maximum benefit. While for medium- or even short-term plans, you choose an instrument that is more balanced or prioritizes security over return.
Then, as time goes on, long-term plans get closer and closer, so the funds invested for this purpose also need to be adjusted to shorter-term plans.
You can see that at this point, you chose diversification not only to ensure the maximum return available over a given period of time, but also to provide a solution that will ensure that your goals are met.
We’ve seen that if you direct your money in one direction, its expected return can be greater than the total, but your expected loss can also be outstanding. That’s why it’s a good idea to split your money and not put all your eggs in one basket.
But it matters what means you distribute your money among. If you have chosen all the devices in such a way that they are just going up at the moment, do not be surprised that there is a chance that they will also move down together.
Correlation is used to help determine whether or not diversification is beneficial. The correlation is very much in terms of the relationship between the two devices. That is, how interdependent they are, how much they move together.
Three cases can arise: positive, negative, or zero correlation.
You can also monitor the degree of correlation, as it does matter whether they move completely together or only move in one direction for a given external effect.
We talk about a positive correlation when the two investment directions move together. The correlation even shows the extent of this co-movement, but this is not important in the present example. Now the only relevant factor is that if one rises, so does the other.
Let’s say you want to invest and you looked at the papers of an ice cream company for yourself. Then for option B, if you invest in a company that runs beaches, for example, the correlation is positive. If the one does well, the other is likely will do as well. In winter, however, both stagnate.
In everyday life, this can be the case for co-movement due to geographical exposure (e.g., papers of Chinese companies), or it is the industries related to digitization that obviously move more or less together, regardless of their physical location.
The correlation is negativeif their values move exactly opposite to each other. When one rises, the other falls. If you split your money in half, they can even extinguish each other’s influence. Continuing the example above, this could be the case if you put one half of your money into an ice cream company and the other, say, to finance the production of ski equipment. When one is in high demand, nobody will buy the other.
In larger volumes, you can observe this in terms of the stock market and gold, for example. When people either invest more cautiously (such was the U.S. presidential election) or panic, they run away from stocks. Instead, they look for one they think is safe. (However, the exchange rate of the latter is affected by many other things besides security awareness.)
At this point, no relationship is observed in the change in the price of the two assets.
In the case of ice cream, this can be the confectionery industry (they have a job all year round) or even the vehicle industry.
We’ve discussed above what the concept of investing is, with what you face it if you move in any direction. It wasn’t even about why you personally need it.
We all have 24 hours a day, and we can dedicate some of those 24 to working. It doesn’t matter how much you love your job, you still have an upper limit. Thus, the solution to growth and achieving your goals is not necessarily to take on even more work, but the investment itself. Then you are not using your time, but your money to thrive. Choosing well, it also brings you money when you’re just sleeping, having fun, vacationing, or just doing nothing. So you make money even when you’re spending money. 🙂
In addition, according to your life situation and age, there is a cyclicality that necessitates the formation of reserves.
The highly stylized graph below depicts a person’s ability to spend and earn money.The vertical axis shows money (i.e.,% of revenue) and horizontally the elapsed time.
What can you see on this?
In the active phase of a person’s life, he or she earns far more than he or she can make a living from at best. It also does this in such a way that sometimes spending jumps significantly (e.g. buying real estate, raising children, etc.). Towards the end of his life, however, revenues fall, so he has to balance the loss from the results of the active phase.
Are the two curves synchronous?
Well, not exactly. Expenditures tend to fall nowhere near as much as revenues, and even if expenditures do fall, there may be a time lag.
What is the solution?
Hopefully you have a structured capital that allows you to bridge this even from your returns.
It can be seen that there is a significant difference between the red and blue lines. A well-structured portfolio serves the purpose of balancing this.
Now that you can see from what has been said so far that there are risks in your own life that useful to tick off in advance.
One typically has to plan this. If you’re running a business, or even just building, you’ve very likely made a budget. This is the same story, only here you are not planning for a maximum of 2-3-5 years, but from 0 to up to 100. You don’t have to be scared from the growing time interval, the calculation will not not become harder.
Once we have the key points in either business or private life that needs to provide for capital needs, it is much easier. By then, we already know where and roughly when you want to go. Accordingly, it is easier to tell which are the financial instruments, that will bring you closer to your goal.
And here comes the actual compilation of the investment portfolio as well as the portfolio management.
There are many types of investments in terms of their appearance:
- Bank deposit
- Government securities
- Mutual funds, index tracking funds
- Unit – linked insurance
- Home Business
- A business operated by others
- Real estate
- Commodity products
- Precious metals (eg gold, silver)
- Industrial metals
- Jewelry, watches
- Purchase of various rights
- Vehicles, art treasures (etc.)
The investment portfolio (investment basket) is compiled from these assets.
The compilation of a personalized portfolio at a given moment should be done according to the time horizon and capital requirements of the objectives, taking into account the willingness to take risks.
The investment portfolio typically consists of a selection of financial instruments. You will come across very few cases where you are offered all kinds of forms of investment to achieve your goals. On the one hand, this is unnecessary because it shatters your money, and on the other hand, the field of finance itself is complex enough to cover it all.
We’ve talked above about what the risk of investing is. Here we look at personalized risk-taking.
Although the main goal of the investment would be the maximum return along the efficiency limit, I would in vain offer a very easily frightened person a well-performing in the long run but riskier in the short run (e.g. stocks, equity funds) if the poor guy regularly gets to heart in short-term downturns, and he dies. So for him, look for a “reduced foaming” version where less volatile devices are avalilable.
Before you choose one, or following the example of your neighbor would like it too, think about how much you can tolerate having your money (only temporarily or in the slightly longer term) worth only half of what you paid. Of course, in light of the fact that there is a realistic chance of achieving the desired return by the end of the planned time period.
Time is an important feature of investments.
This is not only important so that you can decide if it is right for you and whether it serves your goals properly. This question would be relatively simple: if one of your goals is due in, say, 5 years, you obviously won’t put the amount allotted for it in a place that might become something in 10 years.
Selling a long-term investment because of short-term plans is probably one of the last things you’ll ever want.
If you look at the graph below, you can see an important thing about using the time slot.
Namely, increasing the time horizon can reduce the risk of the investment. That’s why if you’ve been looking for a promising, yet riskier stock / equity fund with a higher return prospects, know that the recommended time frame’s purpose is for to be sure, you are as unlikely to suffer a loss as possible. (In the case of investment funds, the recommended time period is indicated in the description of the asset fund)
Compiling a portfolio does not have to be done just once.
Since your life situation also changes from time to time, your investment portfolio is not a static thing you once did and done for a lifetime. If your goals or opportunities change, a redesign is needed.
You also need to review your existing investments at regular intervals to achieve higher returns. (It can be even on an annual basis, you don’t have to think on a daily basis.) This is because neither the money and capital markets nor the performance of individual assets is smooth over time. There will always be investment directions from which it is timely to get out, and also ones where it is worth investing money.
Thus, although the market will move uniformly upwards in the long run, higher returns can be realized by replacing overvalued assets with undervalued ones.
This type of portfolio management is the responsibility of portfolio management.
When the term „“portfolio management”” is uttered anywhere, some people reach for a dictionary of foreign words, while others search roughly in the Chinese language area. However, we meet one almost everywhere: they agree that whatever it is, they don’t have and never had a portfolio and they don’t understand portfolio management.
Let’s look at the term portfolio itself.
Do you have one, if any, since when have you had it, and can you have a lasting portfolio within reasonable limits at all. It has been said above that there are countless and one more ways to invest, and the portfolio is made up of these. So unless you’re completely destitute, you have an investment portfolio.
When you got pocket money as a kid, you could do a myriad of things with it. You could keep some of it in cash, deposit another part in the bank, ask for a savings stamp for it, or buy a scratch card in hopes of winning. At the time, this was your portfolio, and you managed it to the best of your knowledge and ability in order to maximize your available profits in some way.
So you didn’t even know, but not only did you have a portfolio, but you already became a portfolio manager. 🙂
Since then, a few years have passed and your options have expanded. You can put practically all of the forms of investment into your own basket.
Now that you see that you currently have a portfolio, let’s move on to management.
This wealth that now exists should be treated in the same way as when you managed it as a child in some way.
And here comes the point: in some ways.
As a kid, you haven’t had a really big bet on how you handle your money yet. In most cases, the worst thing that happened was that you didn’t go ice cream. Growing up, however, the situation is different, if not properly weighted, the consequences will be greater. This alone is not taught in many places.
Is this about investing? Not exactly. At least not just about investing.
You need to be able to choose the right strategy (you may have a lot of options). Thus, portfolio management is mostly about risk management..
At the time, this was explained to us at school with a very easy to understand example.
Somebody give you a fixed amount of metal. It is possible to use it to make a plow that you use in agriculture, and you can make a cannon out of it. You decide how many cannons and how many plows you make and whether you use 100% of the capacity. Here, too, you weight production in some way, so there won’t be one and always the right solution for everyone.
You do the same thing in real life, only obviously the story isn’t that simple.
As an individual, you also need to determine if you will live out all your assets now or reserve for later, and if so, for what. How much you spend on housing, how much you spend on your own retirement years, or what you went on vacation from. If you are raising a child, you need a redesign to make funds of what to raise. And then I listed only the simplest financial decisions.
As an entrepreneur, you also have to choose between how much will go in which direction. In the case of several suppliers, which one to order more from, where to group more labor, whether to accumulate raw materials, or just how to “juggle” with time intervals (so that not only is everything good now, but it will good in 2-5-10 years).
So you do this kind of activity, only the financial market offers a little bit of other “products” that are less tangible compared to a plow.
Everything works the same in the financial market. Whether you look at the market yourself or seek the help of experts, you have to choose from the different tools in the same way. You choose from a variety of instruments that differ in terms of recommended time horizon, liquidity, volatility, and many other parameters. To reduce the risks, it is handy to diversify. You will then distribute your money among several assets.
We have seen that provisioning is needed to avoid future expected risks.
Assign a device to a destination and select within those devices. Calculating the magnitude of the amount of money required is very simple.
As a rule of thumb, the main steps are:
0. Collect your main plans, only the corner points. You don’t have to count your Bahamas vacation in 20 years.
1. What would the given item cost today? Write it down item by item.
2. How much time do you have? Expressed in years, also by goal.
3. By redistributing the required capital over the number of years, you get how much is needed to you to realize yourself at today’s price using a piggy bank.
4. Since you have now done it broken down for each of your goals, summarize the results obtained. (no, don’t be scared of the number you see yet).
5. Choose, either on your own or with the help of an expert, an instrument that reduces the capital required because of your returns.
If it turns out in point 4 that you won’t have enough money for even the most vital things, then you need to use the economy as much as possible to contribute to your goal. If everything is fine without a return, then the return is at most a bonus category.
Once you have how much you want to get from the economy as a yield, look for a portfolio compilation that allows you to do so, either on your own or with expert help.
To estimate the return required to see if such an asset is available at all, you can apply rule 72.
Rule 72 shows how long a given item doubles.
If you know you have year X: 72 / number of years available =% of expected growth.
Or if they offer you a solution, based on the return on that solution:72 /% growth = required year.
Both as a company and as an individual, there are major points that will emerge almost surely. Thinking ahead is always much cheaper than rushing in retrospect.
For a company, the way investments are used is similar to that negotiated with individuals, except for tax refunds. The difference here is that as a company, it is obviously not the education of the child that will be the primary one. Security, advance planning, and emergency planning appear the same here.
It is a particularly important topic, considering that the Hungarian State (and a lot many states) also views it in this way.
One of the incentives for this is the tax refunds available for pension investments (in this case, up to a pre-determined limit, you can credit the amount still available from your PIT to your savings account when filing a tax return).
Another thing I would like to highlight is that in Hungary, as in many other countries, the pension system operates in a pay-as-you-go system. The point is that you cannot receive more for all retirees than the total pension contributions received under the heading.
As there will be fewer and fewer workers who, even if they receive higher wages (and thus pay more contributions), will not necessarily be able to make what will result in maintaining your standard of living at that time.
This way, you ensure the safety of a period when you can no longer or do not want to work. At this point, your earnings will decrease, but your expenses will either remain or even increase.
Life can and does bring unexpected turns. What you don’t want to do surely is that not only do you get funds for them from your other goals, or you can even ruin them.
In case of trouble, one has to get rid of the results achieved so far, even at a low price.
I am not just thinking here of the emergency reserve that bridges the problem in the event of unemployment. Here, even building a reserve can sound like a lifestyle from which you can live for years. Here are some examples of why you may need to rely on such a reserve:
- caring for a family member
- absence due to childbirth
- in our rapidly changing world, you can make a living from this as long as you retrain from one profession to another.
It’s no longer about your life, or it’s really only about you in part. If you are raising a child, you can decide at the moment of your birth (or even when you are planning to have a child) what time you want to start on.
Teaching is one of the main treasures a child can receive. A more highly qualified person can start from a better position, either appearing as an employee or an entrepreneur. But collecting a home also falls into the category of security. This is when you relieve the child of the risks and burdens of borrowing.
Whether it’s your own property or a property for your child, it’s definitely a significant item if you decide to buy or renovate.
If you have a proper reserve in the background, on the one hand you will not commit yourself to credit and on the other hand it will be much easier to say yes to a good option.
If you still make the purchase of your dream home on credit, there is no problem with that either. Just know that the interest you would receive by saving on time will be generously passed on to the bank.
In the life of a company, dividend withdrawals are, in a good case, not just for to cosmetic the accounting, or to be taken out of the company by the owner at a reduced tax rate at the end of the year and then distributed to employees as a bonus.
The receipt of the dividend is planned by the company management in a good case. If he takes out too little, he has done nothing on the merits. In the case of an excessive exception, however, it jeopardizes the intra-firm capital requirements of the subsequent period.
Of course, in the case of an owner, the dividend levied is taxable. In Hungary it is currently subject to a 15% PIT payment obligation on the dividend.
What most companies do when investing in dividend planning is to plan a larger dividend withdrawal and at least make the tax rate from the yields. If the company needs the money while building capital, it recalls part or all of it, otherwise the company did not have to produce the tax.
It can be a key issue for a family business. Planning for this is timely even if your retirement is still far away.
You can approach your own work completely differently, you can handle decisions more easily if you know that you are not forced to work, but can stop at any time.
What happens if the previous owner-manager actually hands over the company?
Then his income is sure to drop as he no longer gets a salary from his company. If he transfers the company within the family, he takes care of his income in this way, and if he sells the company, he has the opportunity not to price the company based on his emotions, but to get the actual market value (obviously in addition to the exit account balance).
Many people want to keep employees with wage competition. This, in turn, is only possible for a period of time, but beyond a certain productivity threshold, it is impossible to extract wages and their tax implications safely in the long run.
In addition to several other options, this is made possible by a bonus given according to either the core staff or any other objective criteria.
The investment is used by most companies not to have to pay out of the coffers. On the one hand, the money works in the case of the investment, and on the other hand, the fund may not be enough at the moment in the coffers. An account set aside for this purpose also acts as a kind of buffer.
A common question in business life is where they want to be in 3-5 years. This may even be asked by the bank. Many respond to this that they would like a new location or just replace the current one with a more comfortable one.
A company often implements a future project on credit. In the case of a business, the bank often does not finance more than 50%, so the business saves in advance in order to collect the necessary own funds or possibly to substitute a loan.
Protection against inflation from existing sources
Inflation is a slow killer. It eats the already accumulated wealth unnoticed. If annual inflation is 3% and your investment doesn’t give that much after deducting costs, you can be sure your money is worth less than it was before.
Many companies do so by investing short-term and ultra-short-term reserves, which are not needed for daily liquidity, but for reserves over six months. This is typically done through private banking solutions, so they have the opportunity to extract at least inflation for this amount, or even more.
The taxation described in the next section complies with Hungarian regulations. This may be different from what you experience in your own environment.
Now that you know practically everything about investing and building your own portfolio, let’s say a few words about what the state expects of you and what it offers when it comes to investing.
It expects a tax on the one hand, and here over time it tries to encourage you to think long-term as an investor and therefore offers protection in return.
Interest is nothing more than the amount of money given (or just) received for the use of borrowed capital. Yield is the benefit to the investor, which includes interest, but also exchange rate gains or any other increase. When you invest, all you do is “lend” your money somewhere. Thus, whether you receive the increase as interest or yield, the taxation of the investment is governed by the Personal Income Tax Act.
Deduction known as interest tax (PIT calculated after interest in its honest name) uniformly: 15%
Your investment: HUF 1.000
Increase achieved: HUF 100
Then you have to pay 15% after HUF 100, so the financial institution will deduct HUF 15 from you automatically, you will receive the remaining HUF 85 and the original invested HUF 1.000 (obviously after deducting other costs)
Unless you have taken out your investment beyond a certain period of time.
For a one-time investment (when you have invested the whole amount of money at a single time)
10% discount after 3 years,
After 5 years, the interest tax liability is 0%.
For a continuous fee investment (then you add a certain amount to your original investment at regular intervals)
Discounted after 5 years,
After 10 years, the interest tax payment obligation ceases.
In the financial field, the investment can be in the following 2 legal relationships:
In general, the funds placed here enjoy the protection of the NDIF (National Deposit Insurance Fund). You can always read fresh and up-to-date information on what exactly, when, what the fund pays for.
Fortunately, there have not been many examples of NDIF intervention in Hungary so far. It is better for everyone to help financial institutions that may be in trouble.
A domestic bank finds it relatively difficult to get into trouble “on its own”. Thanks to fairly strict banking regulations (which also cover lending practices), there are basically 2 things that could cause an emergency:
- crime or
There have been examples of panic on several occasions (perhaps the most memorable was the case in the ’90s, when customers lined up for their money at Posta Bank), a domestic bank had not yet been liquidated or rescued due to a crime.
Until now, the NDIF has been in the process of liquidating savings cooperatives. On the one hand, they have much smaller capital, so they fluctuate sooner than a bank, and are subject to a little more loose regulation.
On the negative side, it can be said that investments made during the banking legal relationship can be collected, sued, and are subject to the inheritance procedure upon their inheritance.
Basically, the Investor Protection Fund provides security for those who choose to invest in insurance. This type of service may only be performed by an organization to which the MNB (as Central Bank), as the main supervisory organization has granted a license. This can be achieved not only through insurers, but for sure through them. You can find out more about IPF on the IPF page.
In the case of an investment made through insurers, the amount placed here can be avoided by subjecting the beneficiary of the death to the lengthy procedure of inheritance proceedings.
This death beneficiary should not be confused with the fact that an acting person can be appointed in the bank in the event of the death of the account holder. Then the person does not inherit the money, he can only manage it (many people also keep the amount of their own funeral in a bank, which is thus accessible), while when the insurance is paid, the money is owned by the designated person. An investment made through an insurer cannot be collected or sued. They can only be taken if it is stated that it is really from a crime.
The viability of investments is given by the fact that in our lives the habits and opportunities of earning money and spending money are not in sync neither in case of individuals nor companies.
A well-designed portfolio gives the opportunity to its owners to achieve their goals with as little work or energy as possible. However, it is designed in several ways and requires due care.
I would close this article with the words of Albert Einstein:
„The compund interest is the eighth wonder of the world. He who understands receives… he who does not, pays. ”