Understanding how to invest is one thing; actually doing it is something else entirely. For most beginners, the real challenge isn’t learning what ETFs or diversification mean—it’s applying all that knowledge to build a strategy that fits their own goals, lifestyle, and income. That’s why today, we’re going beyond the abstract and creating a simple, concrete investment plan together.
This walkthrough is meant for the everyday investor. You don’t need to be rich or financially sophisticated to follow along. You just need a bit of clarity on your goals—and a willingness to start. Let’s dive into a real-life example and turn investing theory into practical action.
Step 1: Define the Investor Profile
Let’s meet Luca. He’s 30 years old, lives in Milan, works as a graphic designer, and earns about € 2,000 net per month. He has no dependents and pays around € 600 in rent. He already has an emergency fund of € 5,000 and wants to start investing regularly. His primary goal? Build wealth for the long term and eventually have the option to semi-retire by age 55.
Risk tolerance: Moderate
Investment horizon: 25 years
Savings capacity: Around € 300/month
Step 2: Set Clear, Measurable Goals
Luca’s long-term financial goal is to accumulate at least € 150,000 in investment capital by age 55, which he hopes will generate at least € 500/month in passive income later on. He’s not aiming to get rich quickly—he’s playing the long game.
To achieve that, he needs a plan that can deliver both growth and stability over time.
Step 3: Choose the Right Tools
Luca decides to invest using a robo-advisor (like Moneyfarm or Scalable Capital) to keep things simple and automated, with a moderate-risk ETF-based portfolio.
Alternatively, if he wants to take more control, he could use Trade Republic or Fineco and set up a monthly PAC (Piano di Accumulo) to invest in:
- 60% Global Equity ETF (e.g., iShares MSCI World)
- 20% Emerging Markets ETF (e.g., Vanguard FTSE Emerging Markets)
- 10% Global Aggregate Bond ETF
- 10% Cash or short-term money market ETF
This diversified approach balances growth with some downside protection, especially as market cycles evolve.
Step 4: Simulate the Plan
Assuming Luca invests € 300/month over 25 years with an average annual return of 6%, here’s how the numbers would look:
- Total invested: € 90,000
- Estimated final portfolio value: € 173,000+
This projection accounts for compounded returns and assumes reinvestment of dividends. If returns average closer to 7%, the final value could reach € 200,000+. Either way, Luca is well on track to surpass his goal of € 150,000.
Moreover, by starting now, he benefits from the power of compound growth—allowing time to do most of the heavy lifting.
Step 5: Adjust Along the Way
No investment plan is static. Over the years, Luca can increase his monthly contribution as his income grows. He might also rebalance his portfolio annually—shifting some equity into bonds or cash as he approaches age 50 to reduce risk.
He should also stay aware of costs: using low-fee ETFs (<0.25%) ensures more of his returns stay in his pocket. Keeping costs low over 25 years can mean thousands of euros saved.
Finally, taxes: in Italy, capital gains are taxed at 26%, so Luca will need to factor this into any withdrawal strategy or consider tax-advantaged plans like PIR (Piani Individuali di Risparmio) for part of his investments.
Investing Is a Journey—Start Walking Today
Luca’s story shows that building an investment plan doesn’t require huge sums of money, complex strategies, or Wall Street knowledge. It requires purpose, discipline, and a commitment to stay the course. Whether you’re earning € 1,200 or € 5,000 per month, the principles are the same.
Set a goal. Automate your contributions. Stay diversified. Review once or twice a year. And most importantly—start as soon as you can.
Because the real difference between a dream and a goal is a plan. And the earlier you start building it, the more powerful the outcome will be.
