How much do you need for investment?
Let’s begin! I assume we both have some active income – the income for which we have to trade our time, like everyday work. The common goal for both of us is to transfer this active income into a more passive income. If this is not your goal or your goal is to make money fast, there will be less content for you to read on this blog as it is two different things.
It doesn’t matter whether you are a student like me with small active income a few hundred Euro/month or you work for 1000€/month or even better – live in some rich country with high income as 5000€/month.
When we abstract this, our shared problem is the same – transfer our active income into a passive income. Let’s look at both cases closer.
Person A
Person A earns 5000€/month but has to pay for living about 4000€ every month. (for rent, food, commuting, etc.)
Person B
Person B makes 1000€/month but has to pay about 800€ for living every month.
(For sure those number may vary a lot, I used them only for illustration)
What do they have in common?
Even thou those numbers are not the same, what is necessary, the percentage is similar – they have got about 20% of their income for smart decisions. This money they can save every month is all they need for investments!
For person A this is 1000€ from which he can invest, and person B has only 200€ for investing. Now, person A has more for investment, but at the same time, he needs five times more massive passive income to cover his expenses than person B. Whereas person B needs less to earn every month, but either has less to invest.
This example also illustrates why richer are getting richer and poor getting poorer. Perhaps the rich will make the same percentage of money increase as you, but in absolute sum, the portfolio of wealthier people will grow fastly. For ‘rich’ person A is 5% of his investment 50€ (from 1000€), but for person B it is only 10€ (from 200€). . This relativity of percentage growth is essential, and I will look at every investment from this ‘percentage’ view as it is the only thing I can control.
Scalability is the key!
As we defined our problem from the same perspective now, I will also add one important point – scalability. As I try to write for everyone without income differences, I have to keep in mind that there has to be an almost non-top investment limit or at least several thousands of Euro so you can follow me without a problem.
I will try to write here about the philosophy behind investing, which should be quite similar for all of us – with higher or lower-income for Western Europe as well as Eastern Europe.
I hope you can find new investing ideas on this blog about the way of investment and get inspired – which is one of the essences of this blog.
‘If you want to become a better person, you must also come away from something.’ Jordan Peterson
Let’s transfer this idea to my goal – cut my expenses and seek assets that will bring me the value in time and not putting my money into consumer goods, which will slow me down towards this goal.
Time is money!
Lastly, I want to warm you – despite I study IT at university and I like numbers; I value real life more than numbers or money. That means I may not do some super-time-consuming-expertise where I put my money (I will write later more towards this).
I do some research on a needed scale, but I value my time more for different activities like reading, self-education, and sports. I may sacrifice a few % of my profit just for my time.
Moreover, there will be tons of unknown investments to do, and the best way to understand the unknown is to experience it. If I see some potential in some form of investing, I will start with a small amount, and if it fulfills my expectations, I can add simply more money into it later.
‘The best way to understand unknown is to experience it.’
That’s either why I share my experience with everyone – so you may do even less research and focus on what’s important to you even more.
Finally, I hope I can connect on this blog more investing thoughts, which gets to my sense and look at them from a different perspective, which will hopefully create new value for both of us.
Conclusion
This blog is not about getting rich. You won’t. Not this way, at least. What I am describing here is how to keep the value of my hard-worked money over inflation (which steals them away – perhaps we can call it the ‘selective pressure’ of the modern advanced world?) and if the luck will be on my side, even earn something more from my investments. There are different, much more effective ways of getting rich and making money – such as entrepreneurship.
This blog is about the philosophy of investing my money into something that may eventually be my important source of passive income that will not get lost in the topical economic situation nor inflation and support me over time.
If you have the same goal, don’t hesitate and follow me on my journey!
