Forget about building your wealth!

I recently read the book ” The Millionaire Fastlane *” by MJ Demarco and today I would like to introduce you to the basic concept of the book.

The main message: stocks do not make you rich!

The book has made me think a lot in the past few weeks, so I have to admit that for a long time I followed the “wrong” path.

Which track are you on?

Back to the beginning, let’s start with the theory. Demarco compares asset accumulation with Traffic.

He distinguishes between three tracks:

The sidewalk

Who is on the sidewalk cannot handle money and lives by the saying: “Why is there still so much month left at the end of the money?”.Their money is spent meaninglessly until there is nothing left.  Common to all “sidewalkers” is that they go through life from paycheck to paycheck without building sustainable wealth.

The slow lane

The slow track is the classic hamster wheel. Earn money by putting x percent of it aside every month. Invest in long term equities and ETFs and at 50 or 60 you can opt out of working life and have a million in your portfolio. The classic millionaire next door …

But there are two problems: First, it takes an incredibly long time to reach this goal, and second, you are 50 or 60 when you reach your goal. Iit would be much cooler to have the million with 30 or 35 in the account, right?

The fast lane

The fast lane is the track of entrepreneurs. They take a high risk, invest in themselves and their company, and within a few (5 to 10) years manage to create a large fortune through their own business. The author himself built a company, which he then sold for several million.  The fast lane is the only way to really build fast assets.

Preach water and drink wine

So you see, this book has really brought me a bit of rethinking. In his book, Demarco addresses many American greats directly and even mentions them by name. But if you look around in the blogging sphere, you’ll quickly understand that many so-called “influencers” preach water and drink wine. They tell you that you have to invest in ETFs. That you should invest in dividend stocks. That you should save x percent of your income and that at the age of 50 you are finally a millionaire.

All well and good, except they themselves do not live up to these rules …

They themselves make their money with entrepreneurial investments, video courses, coaching sessions, etc. in which they teach you the above points. You are on the slow lane whereas they are well on their way on the Fastlane and have built a company that brings returns well above any ETF.

What do I need shares for? should I start building a business instead?

A good question right? Of course, shares have their merits. Any strategy with high returns (such as self-employment, entrepreneurship) is linked to certain risks. Stocks are a great way to pull out great profits and invest long-term while mitigating the risks. Shares are tangible assets. Even if they are sometimes subject to very strong fluctuations in value, the stock markets are rising in the long term.

My question to you: Which track are you on?

50 tips to become rich – Part 1

In the last few days, I did some brainstorming and thought a lot about which tips you should give every beginner about being rich. Coming together is a list of 50 tips to get rich.

Of course, this list is by no means comprehensive, and I will probably expand this list again as I come up with more strategies. I hope you will find some useful tips on your path to financial freedom.

Here are my 50 tips to build sustainable assets:

1. Think long term  – getting rich is not a sprint but a marathon, there are many reasons why you should invest your money over a long period.

2. Consider yourself as Business – When it comes to getting rich, you have more in common with a business than you think. Businesses need to be self-optimizing and getting better, setting goals and visions for themselves and reviewing their own achievements. All of these are points you should also consider in your own finances.

3. Start early to take care of your finances – Many people are dealing too late with their finances.If you want to pursue the goal of financial freedom or even become rich, you should start early to develop a plan, learn about money and let time work for you.

4. Say goodbye to the dream of getting rich fast – How many people are getting rich quickly? And how many could keep their assets afterward? Handling money must be learned. If you do not know how to make money, you do not know how to keep the money. Getting rich fast just does not work!

5. Set yourself SMART goals – The SMART formula (specific, measurable, ambitious, realistic, scheduled) is cheezy right? Nonetheless, it just makes sense. Set goals for different time horizons and you will achieve what you have set for yourself.

6. Check your attitude to money – How is your attitude towards getting rich? Do you consider people with money as rich assholes or do you see people who have achieved something? Is money something good or something bad? Why should you get rich if you are negative about money? Try to see money as something positive.

7. Take care of your finances yourself – Take responsibility and take care of your money yourself. It is your money. Why should you leave the most important decisions in your life to a broker or a consultant?  someone else

8. Improve your financial education – Unfortunately,  financial education is not taught in school does at all So put your energy into your knowledge. Read financial books and blogs and educate yourself.

9. Earn more than you spend – Or vice versa: spend less than you earn. Sounds logical no? But there are always people who manage to go bankrupt despite millions of dollars. Why? That’s right, they spend more than they earn. Gain control over your money.

10. build multiple income streams – Most people only have their  9-to-5 job. But what if you get fired? It always makes sense to generate multiple income streams. Be it a part-time self-employment, a side job, an online business, investment income or just about everything together.

These were my first 10 tips to become rich.

More to come soon;;;

What else do you think is missing?

What type of investment strategy suits you?

And so the fight goes on. What is better now? Active or passive investments? Should you buy individual stocks or should you rather lconsider  ETFs? Everyone has different opinions. But is there any one right answer to this question? No, it depends primarily on your personal goals and your personal commitment to the chosen investment strategy. It is much more important to answer this question: which investment strategy suits you?

Single shares or ETFs?

Let me first of all define what I mean by individual stocks or ETFs: in both cases, I am only interested in long-term equity market investments with the aim of building up wealth. Ideally, the stocks or ETFs are bought and held long-term under the buy-and-hold strategy. I have selected a few factors for both investment strategies that will help me compare the two investment strategies: Target Return, Commitment, Investment Amount, Cost and Risk / Spread.

Which investment strategy is better? – My conclusion

Both passive investments in ETFs as well as the purchase of individual shares are in my eyes good opportunities to build assets (even for private investors) . The most important criteria are the amount of your budget and youe preferences. If you do not want to deal with the stock exchange or individual companies , you should simply avoid single shares completely. T

Does it make sense to pursue both investment strategies at the same time?

Wellt depends on how you do it. In my opinion, it makes no sense to hold a global ETF portfolio while still investing in individual stocks around the world. What should be the goal of this approach? Either my goal is to replicate the development of the market (ETFs) or I trust that I can achieve a better performance than the market return (single stocks).

The pursuit of both investment strategies – according to me – ultimately leads to nothing.

If you think that you can invest better than the market, you should invest everything with the “better return”. If you do not think so, you should invest all your money in ETFs.

My investment strategy?

I follow the active approach with my dividend strategy, and I believe that in the long run I will achieve a higher return on investment with this strategy. Depending on how often I invest, only transaction costs are incurred. However, in the last 2 years, I’ve done very few transactions. In addition to the dividend strategy, I cover the emerging markets with a small additional ETF. This is because I do not know much about these amrkets at the time I am investing and therefore I prefer to invest in the entire market. With this approach, the “established” companies in Europe and the USA have long since generated significant revenues in the emerging markets.

Which investment strategy do you pursue?