Investing – The Right Way

The biggest mistake I’ve made has not been where I put my money but rather how I used to view saving and investing overall – as a source of immediate income within the next few years. However, that’s not what it is for … unless you already have a ton of cash.

The biggest strength of investing lies in the power of compound interest and time. Combine these two and you can do a lot of damage with relatively little money.

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My purpose for investing is to generate an income for later stages in life, to have financial security then and be able to do what I want – not running risk of being an old fuck and having no money! That’s perhaps the worst scenario anyone could imagine.

The invested money will not be touched within the next 2 decades (or unless target amounts are reached where the interest alone throws off enough cash) and I don’t perceive it as disposable income. It’s almost as if that money doesn’t count. I balance the different buckets (see below) once a year, don’t even think about that money and simply let it grow.

At the same time, it’s important to have a balance when it comes to saving money. I’ll never know if I’ll ever be able to use it, so making sure I also have a great quality of life NOW is equally important. Whenever I feel comfortable, I can make sacrifices to save more … but the remainder of that money will be used to take advantage of present opportunities such as

  • Business
  • Travel
  • Lifestyle
  • Experiences

That way, I’ll always be more relaxed and enjoy spending money on stuff I’d be interested in – use money as a tool. Right now, all I am doing is saving. It’s neither fun, nor does it offer peace of mind.

3 Levels of Passive Income

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Covers food, housing, cars, travel, and entertainment.

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The basics + everything else is covered.

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Asset Allocation

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  • 70% Security Bucket (Cash, Fixed Deposit, Savings Account)
  • 20% Stocks (Index Funds -> S&P 500)
  • 5% Commodities (Gold, Silver)
  • 5% Growth Bucket (Individual stocks/any other type of investment)


You can set the percentages based on age and risk appetite. I simply asked myself how much I am willing to lose (in the worst scenario) and came up with these numbers. There’s no point in risking more but having trouble sleeping at night.

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In terms of how much I save minimum per year, I’ll base that on the yearly budget (goal) I set annually. It will also depend on my other goals/projects for the year and the spending they require.


Disposable Income

Very easy. This is the overall income minus the amount I add to my savings. The money here is used to leverage life and maximize the best of it: fun, joy, excitement and business opportunities. It’s meant to be enjoyed but still requires to be spent carefully.

For this, I’d make sense to set up an entirely separate account. After all, disposable income is also used for regular monthly expenses such as insurance, food, rent.

Saving money, investing for rainy days is super important, but perhaps the present moment shouldn’t be forgotten. There’s much to be enjoyed while saving your way to a fortune and if I only always save most of the money, money and I will never have the love relationship I’d dreamed of.

Money is a tool for leverage and power. It should add to life, not make you a greedy old bastard.

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