Whether you want to become a millionaire or not, we all have some extra money in the bank and could make it work harder for us.

I want to share two fundamentals.(Needless to say, I am no financial expert nor advisor, so take everything with a grain of salt)

You cannot multiply money you don’t have. Hence, build up savings. Of my net income, I save about 60%-75%.

First, I keep my fix cost at a minimum. Apart from rent, I may have 1-2 smaller recurring contracts (ie. my phone bill, my photoshop license). Second, I track my variable expenses to get an idea on what I spend and ask myself if its necessary.

Invest long-term

There is this classical book on investing called The Intelligent Investor. I don’t recommend it as it is really dry, but the key message of the book is: The Intelligent Investor thinks long-term. There are no free lunches and we will hardly ever be better than any trader and beat the market, so forget short-term speculations (unless you can make speculations your full-time job).

There are different ways of creating a long-term balanced portfolio and this definitely depends on how risky you are. There are plenty of resources out there to figure that out, so I won’t go into details. As an example, I am currently at a split of 30% cash, 30% stocks/saving plans, 40% business capital (excl. apartments). My current return on stocks is about 30% right now.

I think most of us have difficulties with stocks and determining which to buy when and how much. I want to elaborate on ETFs (exchange traded funds) in one of the subsequent articles as I am a lazy person and like asset classes that generate returns without having to manage them on a day to day basis.

As a starter, I think a good way to start is to play around with a depot-simulator where you get some game money and you can start playing around and invest into some shares and see how it goes.

I’d be curious to learn how you think about personal investments and financial planning.