Keep it simple
I’m a minimalist in most things I do, and that also includes building wealth. If things get too complex, it’s too easy to give up. Simple is where it’s at. Keep it simple, and you’ll move forward effortlessly.
I remember a pension salesman coming to my condo when I had my first proper job. I wanted to invest a percentage of my salary so that I’d have an income when I retired.
I was expecting a straightforward presentation of the amount I’d need to invest and the likely payout I’d get.
Instead, he talked for around 30-40 minutes non-stop. If I invested $X in fund A and left it for X years, I’d get 1/35th of the amount invested each year multiplied by some complicated formula that may or not include bonuses. The bonuses were based on something so convoluted that it didn’t make any sense.
I told the guy that unless he could explain it in plain English in a few sentences, I wouldn’t be investing.
He couldn’t do that. I showed him the door.
It was all a scam anyway. Some financial consultants like to make investing sound like rocket science. It makes it easier to hide the massive commissions they take. That’s exactly what the pension salesman was trying to do. He wanted to keep the commission well hidden.
I want to know how much of my money they’re stealing. With the above salesman, he would have got almost all my first couple of years of contributions. No way, Jose.
From that day on, I decided that my path to wealth would be simplicity itself. It was to be a minimalist, 2-step process. If only two steps are needed, why complicate it with another 27 steps?
Step 1 — Earn Money and Live Below Your Means
You may think I’m stating the obvious here. I am. It’s so obvious that we should be doing this, yet most don’t do it.
The idea is that you earn enough money to cover your living expenses and also have enough to invest. That’s simple enough, right? We can all do that if we make an effort to.
What you don’t do is spend your monthly paycheck and hope you have some leftover for investing. That doesn’t work, except for a few that have exceptionally high earnings. That’s not me. That’s not you.
Hoping you’ll have enough leftover just doesn’t work in practice.
Instead, you invest a percentage of your salary as soon as you get paid. You then live off what’s left. If you don’t have enough to see the month out, you cut back your spending anywhere except your investing.
You can’t live a champagne lifestyle if you have a lemonade salary.
You need to always live within your means.
“But my salary is too low to be able to invest anything“, you say.
No problem. You can set up a side hustle and invest that income. Remember that you’re doing this because you want to build your wealth. This isn’t some extra cash for frivolous spending.
It doesn’t matter if you only have small amounts to invest. What matters is that you invest regularly, and preferably from a young age. Compounding, the 8th wonder of the world will work in your favor.
Step 2 — Invest in Assets
I already mentioned living within your means so that you have some money to invest. To begin with, these may be small amounts and not enough to buy any of the more expensive assets.
First, take care of setting up an emergency fund. Next, buy assets that are very easy to buy. Don’t make this complicated. You don’t need to take a course in stock investing and spend hours studying company accounts.
I’m not a financial adviser, so I can tell you what to invest in. But if I was starting again, I’d invest in index funds and some crypto to begin with. I’d dollar cost average into them over the long term. With crypto, I’d make sure I was investing mainly in the top assets. I have most of my crypto money invested in the top 10 coins. I also speculate with smaller coins and tokens with smaller amounts.
I would advise against putting your whole investment in some meme shitcoin. For those that don’t understand crypto, sticking with the top two coins, Bitcoin and Ethereum, seems to work. If you don’t like crypto, you can stick with index funds. Do your own research before investing.
When you build some worthwhile wealth, you may want to consider investing in some land and property. Over the last 100 years or so, this is the number one way that the wealthy have made money. People will always need property.
That’s how I keep my investing simple. Each step can be broken down into different parts, but I always keep these two steps in mind. All I need to do is earn money and invest that money in assets. That’s all you need to do.
Once you’ve done the above and have more money and more experience, you may want to consider other forms of investment, but you don’t need to think about that right now.
I write here as a side hustle. I invest what I make in assets. At the moment, it’s all going into crypto. Next year I’ll be adding a property to my portfolio. I already have my index funds set up.
I’m also keeping some cash spare for other opportunities.