You want your money to grow. So you start looking for the perfect investment: high returns, zero risk, guaranteed success.
But here's the thing: that investment doesn't exist. Every single investment that offers real returns comes with uncertainty. And the investments that promise safety? They barely keep up with inflation.
The truth is, risk isn't your enemy. It's actually the only way to build wealth. The key is learning how to manage it properly.
Risk and return go hand in hand
In investing, there’s one rule you can’t escape: no return without risk.
Every investment comes with some uncertainty. And it’s exactly that uncertainty that you're rewarded for. If there were no risk, there’d be no reason to expect decent returns. That’s why safer options, like a savings account or a government bond, offer little to no growth. Your money’s safe, but it doesn’t do much.
Low risk = low return
Playing it safe means accepting that your money will grow slowly, if at all. Think of your savings account. It feels secure, but it won’t help you build serious wealth.
Higher return = more risk
If you want to grow your money faster, you need to take on more risk. Stocks and index funds, for example, have brought higher average returns over time. But they also come with ups and downs. It’s the trade-off: more potential, more fluctuation.
There’s no way around this risk-return balance. You’re always choosing between stability with little reward, or risk with the potential for more. Smart investing isn’t about avoiding risk altogether. It’s about taking the right amount of risk for you and your goals.
Savings account: safe, but with hidden risks
A lot of new investors see their savings account as the safest place for their money. And in some ways, they’re right. If you have money in a regulated savings account with a Belgian bank, it’s protected up to €100,000 by the deposit guarantee scheme. Plus, your balance won’t suddenly drop 10% overnight. So yes, your savings feel stable.
But there’s a catch. That stability comes at a cost: savings accounts earn very little. And with interest rates this low, your money is slowly losing value. Some big Belgian banks still offer only 0.3% to 0.6% interest. But if inflation is at 2%, you’re actually losing about 1.7% in purchasing power every year. Your money looks safe in the bank, but it buys you less and less over time.
Let's put this in perspective: If you keep €10,000 in a savings account with a 0.6% interest rate for 10 years, you'll earn about €615 in interest. But with just 2% annual inflation, your €10,000 will only have the purchasing power of about €8,200 after those same 10 years. In other words, your money is slowly shrinking rather than growing.
While savings accounts serve important purposes, their most important drawback is that they're unlikely to help you meet your long-term financial goals. The reason is the low interest rate. With inflation typically running at 2% or higher, your money actually loses purchasing power over time when it sits in a savings account.
Why you have to take risks to achieve your goals
Over the long term, riskier investments like stocks have rewarded investors with much better returns. Global equities, for instance, have delivered an average return of around 7% to 8% per year above inflation. Compare that to a savings account, which usually pays less than 1%, often even below inflation. So the real risk might be not investing at all. If your money doesn’t grow, how will you reach your goals?
Ask yourself this: are you okay leaving your money in a savings account for 10 or 20 years, earning close to nothing? Or are you willing to accept some ups and downs in exchange for a much better chance of growing your wealth?
For long-term goals like retirement, your kids' education, or financial freedom, the answer is usually clear. To get there, you’ll need returns, and that means accepting some risk. Even inflation is a quiet threat. Prices go up each year, and if your money isn’t growing, it’s losing value. A savings account earning 0.5% interest during 3% inflation means you're actually losing money. So avoiding risk entirely often backfires.
On the other hand, smart investing, like putting your money into a globally diversified index fund, has historically beaten inflation. The MSCI World index (tracked by the popular ETF IWDA) returned 12.9% per year on average from 2010 to 2020. And over the past century, stocks have brought an average return of 6.6% per year after inflation.
It shows one thing clearly: risk is the engine that drives long-term growth.
The illustration below shows the difference between a savings account and investing. A savings account provides a predictable and stable return. But you don't earn much of a return. Investing is more of a roller-coaster because the financial markets go up and down over time. But over the long term, you can be almost certain that you will earn a higher return (by taking more risk!).
Managing risk wisely: diversification and the long term
Just because investing involves risk doesn’t mean you should gamble your money away. Good investing is actually about managing risk, not avoiding it completely, and definitely not taking unnecessary chances. Here are a few principles to help you manage risk as a beginner:
Diversify your investments
You’ve probably heard the saying: don’t put all your eggs in one basket. It’s solid advice. If you put all your money into one company and it goes under, you lose almost everything. But when you spread your investments across hundreds or even thousands of companies, like you do with an index fund or ETF, you protect yourself. If one company stumbles, it barely makes a dent. ETFs are built to spread risk. They invest in lots of companies, across different sectors and countries. You’re still exposed to the ups and downs of the market, but history shows that those risks tend to pay off over time.
Think long term
Time is your best friend when investing. Yes, markets go up and down in the short term. But over decades, the risk of losing money drops a lot. If you’re investing for 10 years or more, short-term dips don’t matter as much. The key is to stay calm when the market falls. Don’t panic-sell. Instead, stay focused on your long-term goals. That’s how you turn risk into reward.
Invest regularly
Trying to guess the best time to invest rarely works. A better approach? Put in a fixed amount every month, no matter what the market is doing. This strategy is called dollar-cost averaging. It helps you spread your risk over time and avoid bad timing. Sometimes you’ll buy when prices are high, other times when they’re low, but overall, you’ll pay an average price. It also builds good habits and keeps things simple.
Match your investments to your comfort level
Everyone handles risk differently. If market drops keep you up at night, you may want a more cautious portfolio, one with more bonds to balance things out. If you're investing for the long haul and you’re not worried about short-term swings, then more growth-focused investments may make sense. Also think about when you'll need the money. Saving for retirement in 20 years? You can probably take on more risk. Planning to buy a house in two years? You’ll want something safer.
Managing risk isn’t about avoiding it. It’s about knowing yourself, staying consistent, and investing in a way that fits your life. That’s how you give yourself the best chance to grow your money, without unnecessary stress.
Curvo helps you invest with the right amount of risk
One of the hardest parts of investing is knowing how much risk to take. Too much, and you might panic during market dips. Too little, and your money might not grow enough to reach your goals. That’s why Curvo starts with a simple questionnaire. We ask you a few questions about your financial goals, your timeline, and how you feel about risk. Based on your answers, we match you with a portfolio that fits you. Not too risky, but not too cautious either. Just the right balance for your situation and your goals.
Investing made simple and responsible with Curvo
Getting started with investing can feel overwhelming. We get that, because we’ve been there ourselves. That’s exactly why we built Curvo: to make investing easy, safe, and suited to your life.
Through the Curvo app, you invest in a globally diversified portfolio of index funds (ETFs), all tailored to your goals and your risk profile. You don’t need to choose funds, rebalance, or figure out taxes, we take care of the details. Your money is under the supervision of the Dutch financial authority (AFM), so everything is done securely and by the rules. The result? You get the benefits of global market growth, without the complexity or stress. You can start with just €50 per month and build up over time. And thanks to our approach, you avoid taking on too much risk, but also not too little.
Investing always involves risk. But with Curvo, it’s done in a responsible, thoughtful way. So you can focus on your future, knowing you’re on the right path.
Summary
If you want your money to grow, you have to accept that there's no such thing as risk-free returns. Every worthwhile investment comes with some uncertainty, but history shows that taking calculated risks pays off over time. The real risk might be doing nothing at all and watching inflation slowly erode your purchasing power.
The solution isn't to gamble with your future or hide your money under the mattress. It's about finding the right balance through diversified investing, staying consistent with regular contributions, and choosing investments that match your goals and timeline. When you manage risk thoughtfully, you give yourself the best shot at financial success.