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5. Investments and Asset Classes

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You’ve made it this far, to the last article in the basic series. Congratulations! This gives you a good You now have a good foundation for your financial freedom, especially if you’ve done the things I’ve encouraged you to do so far.

You now have an overview of your income and expenses, know your hourly wage rate and the structure and limits of your reserve accounts. You’ve looked at the negative returns of your debt, if you have any. You also know how much money you have available each month for investing, or at least this number will become greater than zero in the foreseeable future.

You now know where the money you want to invest will come from. And you also know how to motivate yourself to earn it and keep yourself head above water throughout the process. But where do you intend to put the money? What investment opportunities are there and which of them are the right ones for you?

In my experience, there are certain criteria that almost all investments have in common. Before I go into detail about investments, I would like to introduce these criteria first. It is important to be familiar with them. This simplifies a lot, later in assessment.

You can think of it like a deck of trading cards. All cards have certain characteristics with different specification. Attack cards have better combat values than defense cards and you also have cards that can produce and consume resources. When it comes to investments, it’s very similar. Each investment has a set of criteria in varying degrees. And depending on what type of player you are, you can choose the investment that suits you, and put my money on the appropriate card. Or spread it across multiple ones. As you like.

One more thing: this article is a bit longer than the others. But nevertheless it is worth reading. It doesn’t have to be in one piece. I’ve put a lot of my experience and knowledge about those criteria into every single section. I’ve never read or heard it like this anywhere else. It really helps to know these things before you spend your money. The chances of a good rate of return are higher. And if it is too much for you at the beginning, you can first skim through the article and then read up on individual parts later. In this case, I recommend having a look at the end of the article. There I tell you how I plan to progress with this blog.

The criteria for evaluation of investments I have compiled are eight in total. You could also call them The Magnificient Eight of Investment. Unfortunately, I’m not sure at all that this will become a catchphrase in the investment world, but let’s just get started.

Annual Return

Return is the most important thing in any investment. Otherwise, no one would do it. The money must increase eventually. This is the very purpose of investing.

There are various ways to report this return. Especially in financial circles, many funds and similar professional investment vehicles use a certain method I personally would label almost deceptive. They state the percentage increase the investment has made since it started. That supports marketing for those funds, because it can produce really high figures. Especially for assets with longer runtimes. Returns are advertised of 120% or 150% and more. Sure, that looks great on paper. However, if you look more closely, this means that over the entire lifetime, $100 invested have grown to $120 or $150. But if the fund has been on the market for five years or more, then the annual increase is just below five percent. Looks puny, right?

Reporting the return as a percentage is pretty good. You are not dependent on the actual amount you want to invest, and you can calculate the profits “per dollar”. But there’s one thing which is incredibly important in order to compare various investments: don’t factor in the runtime! And the best way to do that is with the average return per year.

Unfortunately, the formula for this yearly average return is a bit complicated, but it still fits into a single cell in an Excel spreadsheet. I have created a small table, which you can copy to calculate the return of your investments. We need the initial value the investment was launched (for funds this is usually 100), the start date and then today’s market value and today’s date. The result is the average return per year. It indicates how much the investment has gained each year since it started, like you had invested once at the very beginning and then just let everything run its course. You get a value you can investments compare with, in a similar way to comparing loans on the basis of the effective annual interest rate . At least in Germany, this value is required by law for credit comparisons. For loans, that value works very well, regardless of the runtime.

But what does this return really tell us? Let’s make an example to get a feeling for the numbers.

The long-term return on equities is around 5-8% per year. This can be calculated fairly easily by entering the annual increase of major stock indices into the Excel spreadsheet I just showed you. The Dow Jones index is a very good choice. It exists since 1884, so we have data of almost a century and a half. During this time, the index has risen from a starting value of just below 41 up to round about 35,000 points today. If I would report this gain as it is done in a securities prospectus, we would get a whopping 83,400%. An astronomically high figure, perfectly suited for marketing purposes.

But it also shows the massive potential of shares as an investment. Imagine, you invested $1,000 in an ETF on the Dow Jones in 1884. Today, you would own more than 83 millions! The average annual return, on the other hand, is “just” at 5.6%. This example proves that there is definitely potential in what appears to be relatively low numbers. All thanks to compound interest.

If you calculate the average returns per year for other major indices, you get at similar figures. There are some fluctuations, depending on the index, but on average you always come up with the aforementioned 5-8%. This is a good benchmark of what an investment should yield. As we will see, shares are one of the best and most sustainable investments ever, especially if I take into account the amount of work to maintain my portfolio in the long run. Depending on the investment strategy, this amount can be nicely cut down, sometimes to almost zero.

If another investment yields less than shares, you should think carefully if it is worth the effort. If it yields more, you have to look at the risks in particular, because a higher return often goes hand in hand with a higher risk (but we’ll see that this is not always the case).

That’s the essence of returns. The most important points are the average long-term return per year and the benchmark of 5-8% for comparison.


The lifespan of an investment often plays a minor role compared to the return, but it is no less important. What we want is investments which run over decades with a decent return. After all, we don’t want to worry about where to invest our money in every few years.

That’s the reason I the search for suitable investments completely different than most other people. I only invest in assets that have survived in the market for at least five, or better, ten years under real-life conditions.

Today, when investment advisors recommend something to me, one of my first questions, right after the return per year, is: “How long has this thing been around?” And if he responds by saying “We’re just freshly launched” or “Been around for two years already,” I usually say “Thanks, but no thanks” and tell him I’ll monitor the asset until it’s been around for five years or more.

Reason being that I have already invested in a number of investments, where after two, three or five years I was told the whole thing had “unfortunately not developed as expected”. The most common reason for investments going down are cycles on the stock market. The long-term cycles last exactly in that range of two to five years. If an investment has survived for five years, then, on average, it has gone through one of those long-term cycles. Including its down phase. And if the asset survives that, then it has a good chance of making it through the next few decades.

In addition, we want to have investments with an endless runtime. In other words, the investment should not be designed to get paid back in, let’s say, 10 or 20 years. Then you need to look again at where to store the money, and the learning curve starts all over again.

Shares are a good example here, too. A company usually wants to remain alive and grow as long as it can. A good share portfolio needs constant maintenance and every now and then a share must get exchanged completely, but the duration of the entire portfolio is laid out for all eternity. Or to put it correctly, for the rest of your life. And if your heirs have also mastered the art of investing, then, obviously, a lot longer.


Of Risks, we have plenty. Investment brochures are not that long for no reason. And this is despite the fact that those risk sections are usually printed in very small letters. Also for this topic, I would like to comment only briefly on the most important ones, because many risks are often assessed completely wrong. For example, the risk of total loss. Theoretically, it exists with every investment. Even for those with a guarantee. After all, even the warrantor could go bankrupt. Then you have a guaranteed claim, but as the saying goes: you can’t milk a bull.

But it’ s not as bad as it may sound right now. The most important thing about risk is the probability with which it occurs. Only when you can roughly estimate how likely a certain event will occur, you can tell more precisely how much you should pay attention to it. And the probabilities of total loss are often lower than you think when you first read on it. Particularly in the case of well-designed investments (those which are made for all eternity).

Nevertheless, these probabilities are often hard to quantify. Concrete figures are rare. Especially in advance. Afterwards, you can tell better, but if worst comes to worst, the money is still gone. In that case you may have made your learnings, but the actual goal is not to generate losses but to make profits. The good thing about such losses? Those learnings will give you a feeling for the most important risks relatively quickly: which ones have an impact and to what extent. And if you are in doubt, the second Golden Rule of investing applies:

Only invest money you can afford to loose.
Money you don’t need tomorrow.

You can combine this with the following rule of thumb:

The less I can assess the risk, the less money is invested.

Stick to those two rules and in most cases you will be on the safe side. You will be able to carry on, even after a failure. Investing small amounts for testing is usually a good way to become familiar with an asset and to better assess its risks. The key is: never put all your eggs in one basket. You want to get started, and you want to do it as early as possible, so that compound interest will work on your side long term. But no matter what goes wrong, you want to be able to keep going. Only then you will reach your goal eventually.

Sometimes, I can’t estimate the probability of a risk, especially the risk of total loss. Then, it often helps to look at the development of the investment during a black swan. How did the asset do when the stock markets dipped? Let’s say in 2008/9, the years of the global financial crisis. Or in recent years, since the Corona breakout. In the big stock charts, you can usually see such black swans very well, and if the asset I’m examining also has a chart, I can match the chart history and see what happened. How much did the price drop compared to the Dow Jones or other major indices? In a solid investment, I would expect a smaller drawdown because good management counteracted in time.

In trading there is a wonderful tool for assessing risk: the maximum drawdown. This is the biggest loss a system trader has made in his lifetime. The lower the maximum drawdown, the lower the risk you take when investing in this particular trader. Of course, you have to look at this number in combination with his return and the runtime of his portfolio. The drawdown is of little value if the runtime is below two years. But since I’ve been involved in systems trading, I always have a look at the maximum drawdown when I check other investments that have a chart.

Let’s get down to some numbers. The major stock market indices have maximum drawdowns of more than 70, in severe crises even 80%. This means that in a violent slump, on the stock markets, up to 80% of the previously made profits are lost! Nevertheless, you can make 5-8% per year with stocks in the long run, if you go steady and don’t lose your head when it goes down.

With a managed investment you want this maximum drawdown to be lower than on the stock market. For most good traders it is around 30-35%. If it is significantly more, say over 40, hands off! There are better opportunities. This is also true for funds. A good actively managed equity fund must exist for more than ten years, must have beaten the market during that time (average return per year greater than 8%), and then it usually has a drawdown that is not much more than 50%. Not even in the global financial crisis of 2008. And if you now start to research funds according to these criteria, you will see how scarce really good funds are.

There is much more to tell about the risk of investments. But most of the risks are specific to the very asset. Currently, I’m planning a series of articles where I will discuss various investments individually and also shed light on their risks in detail. If you are interested, please participate in my feedback survey. I can only provide helpful content if I know what knowledge my readers actually need.

However, there is one last point I would like to mention here. It’s psychological in nature. Humans are inherently risk-avoidant. The fear of losses often outweighs the joy of gains. This has been proven in scientific studies. It feels up to three times worse to lose a dollar than it causes joy to win one. You must overcome this psychological threshold. Viewed from a purely statistic perspective, when reaching a goal, more attempts will fail than there are successes. This also applies for investing. Therefore, the hits must overcompensate the losses. One way to make this possible is: start with little money, spread it across several investments, watch them for some time, and later on, increase the assets that have developed well.

And investing only works if you’re willing to accept losses and keep going anyway. Even if it hurts and causes more anxiety than a profit brings joy. From my own experience, I can tell that almost all of my long-term working investments initially dipped a bit. Very few stocks take off right away when you buy the first time. Also, the performance of pretty much all traders fluctuates over time and you will rarely catch a bottom of such a fluctuation when you first get in. And on the rare occasions the freshly bought investment rises immediately, a few weeks later you might see the first gains evaporate again or you even end up in the the red.

As long as the asset hasn’t changed fundamentally, there is only one way to survive this: Hands off from the sell button! Those who press buttons while driven by their emotions will make losses in terms of statistics. Gut feeling is deceptive when it comes to investing! At least in the first few years. For evolutionary reasons, our psychology is not designed to work properly right from the start. Only after a few years and many attempts do we learn to no longer get buffaloed by our psyche. Then, slowly, you can start to trust your gut feeling. And in order for you to do better than I did, I am writing these lines, and I hope that your learnings will not cost you quite as much money as they did for me.


With this we have handled the three most important criteria for the evaluation of investments. The following are not unimportant, but when looking for new investments and one of the first three are not met, we usually don’t even need to look at the rest.

Passivity means that I want the investment to become a no-brainer over time. After all, we speak of passive income all the time and of creating a machinery that works on its own to finance our lifestyle.

Needless to say, you don’t need to enforce passivity. Those who enjoy getting involved in trading stocks or cryptocurrencies or taking care of their own real estate, searching for tenants and organizing craftsmen, are more than welcome to do so.

Everyone else should check how much time they must put into maintaining an investment long term, once the basic learnings have been made and it’s up and running. The best way to measure this effort: look at the working hours per month. If I know how much time the investment will cost me once it’s up and running, I can ask if I feel comfortable with this number of hours, which I will have to invest regularly? How far can I reduce these working hours?

This also determines the hourly wage of the investment: divide it’s annual income by the hours that you have to put in per year. The higher this hourly wage, the better. And, of course, it should be higher than that of your normal work. Otherwise, the whole shebang is useless. But we’ve been over that already.

How might that look like in detail? I think you can get pretty much any of the classic investments to a number of working hours that is well below 40 a week. At some point, a good trader might sit at the computer for only two hours a day, and in that time he makes the money he needs to live.

With the classic stock portfolio, where you essentially buy and hold high-growth or high-dividend stocks, the effort can also go down to a few hours per month. Here, you won’t have to do much more than following the news of your favourites, read a quarterly report here and there and perhaps peek on the menu of the occasional annual shareholder meeting.

And even in real estate, you can often hand over the work to someone, to an extent that all you have to do is pick up the phone, if anything breaks, and talk your favorite in-house handyman, who you would have invited to the next barbecue anyway.

However, this “if anything breaks”can become an argument either in favor of or against a certain investment. In the case of real estate, you won’t have to do anything for weeks or months, and then, suddenly, something comes up. Sometimes, you can anticipate a defect, but it can also happen unexpectedly. Also there’s always the possibility that your tenant terminates the lease and then, you must come up with some time to find a new one. If you have already planned a longer vacation at that time, things might get complicated — or there will be downtimes that reduce the return.

The investment should not only fit into my life in terms of time to spend, but also in terms of the availability I have to have as an investor. How are the working hours distributed throughout the year? I personally don’t like investments where things can happen out of the blue and I then have to take care of them as quickly as possible. Even if there is nothing to do for months or even years between such incidents. Others may not like spending time on a continuous and regular basis. Even if it’s just a handful of hours a month.

As written before, this is a secondary criterion. I’d sort it in the category of “problems nice to have” once everything is up and running. But I think it still makes sense to deal with it in advance at least a little bit. After all, if it took you a few years to build up a well performing investment, you’ve most probably put in a lot of blood, sweat, and tears. And it would be a shame to realize afterwards that this investment is not the right fit for you in the long run.


Scalability of an investment is a fundamental requirement. I want my investment to still generate its return even after I’ve invested all the money I need to finance my lifestyle.

This is where the aforementioned magnitudes comes into play. For initial learning, it’s best to use amounts of money in a magnitude from one up to a few thousand dollars. Even total losses are quite easy to cope with, because I can regain them quickly and continue to invest, even when earning a low hourly wage.

However, I want my investment to yield a steady return when it has grown to a magnitude of $10.000 or $100.000, or even to more than a million. And with an average return of 5-8% per year, as we have seen with shares, I must exceed one million to be able to live a decent life. One million dollars, invested in a well-performing stock portfolio, results in a sum of round about $30,000 to $50,000 per year after taxes. It depends on the exact return and the tax rate. Maybe a little less, maybe more, but the magnitude is in the mid five-digit range. In the countryside, that might be enough to live on. In a city like Munich, at least half of that sum will be gone to pay the rent. There, a capital stock of two million would be better.

Long story short: before digging deeper into a certain investment, you want to check whether it will also yield it’s return with seven figures capital. The potential must not be capped at some point. There are many investments which don’t scale. Savings accounts, for example. Apart from the fact that nowadays you get no decent interest anymore on your savings, most fixed-term deposits have a maximum amount up to which the interest rate is paid. And this cap is often in the six-figure range, maybe at $100,000 or $250,000. Anything above that often yields less, or no interest at all. In the worst case, the interest rate is negative for such high amounts. More and more banks demand penalty rates for high amounts of cash in the account.

Stocks and real estate are the classic investments you definitely can scale into the millions, and even beyond. No problems here. Especially with stocks, the range of scalability is terrific. You can start with small amounts of play money and once the strategy is working, scale up until you reach your goal.

In real estate, it is exactly the opposite as with fixed-term deposits. Here you cannot start with small amounts, because you simply can’t buy an apartment for $1,000. There’s no problem investing millions, but you need a certain minimum to start. And with such investments, you have to be careful with cluster risk. If possible, you want to avoid bigger chunks in your portfolio. If something goes wrong, they might eat into the performance. Investments which don’t scale on the lower end are suitable if you already have some equity and you want to build up a second mainstay for diversification.

Learning Curve

There is not much to write about the learning curve. That’s is the time you need to familiarize yourself with the subject until it runs smoothly. The time you need to get to the “maintenance mode”, where the investment runs passive.

You must be able to fit these learning hours into your current lifestyle. You want to ramp the investment up in parallel to your job, otherwise, it won’t work. As long as you can use play money, there’s no pressure. Everything can be done in your spare time and if there’s a phase where you have more important things to do, you also can let it rest for a few weeks or months. But once you switch to real money, you can have unexpected losses if you run out of time.

The important question is: how much time do you need to master the learning curve? How many hours per week – and how long will the learning phase last?

When it comes to trading, it is often enough to read one or two good books and then start with paper trading. If you are a total beginner, grab a book about the basics: what are stocks, how to buy them and where are the risks. The second book should be about a trading strategy: what to buy when and when to sell again. Stick to one strategy at first. Mixing multiple of them can be dangerous. And then, open an account at your favorite online broker and you are good to go. Or start trading on paper until you feel safe enough to put your money on the line. Every one of those steps can be easily done in your free time. And even after you switched to trading with real money, you can always take a break once you’ve closed all your positions. With a long-term stock portfolio or if you follow well performing traders, it can be even more easy. Here you have no effort at best, when you find the right traders who have learned their profession and know how to make steady profits.

And with other investments, such as real estate, mastering the learning curve can become almost a full-time job. When buying an apartment, first I need to know the process, how everything works with the contracts, the notary and all the taxes. I may need to find an independent assessor to rank the flat I want to buy and after the purchase, I have to search for tenants. Later, I have to deal with craftsmen when repairs are needed. And much more. Over time, you will get used to those tasks and they will take less time. But in the beginning, you have to be available.

Please don’t get me wrong, I don’t want to discourage anyone from investing in real estate. I have been thinking for quite some time about buying my first flat and rent it out. But I decided against for exactly these reasons: not passive enough in the long run, learning curve too steep. The initial learning curve, like passivity, is a secondary criterion. But in my experience, you should at least invest a few thoughts before you start.


This section is about what an asset is suitable for. Most investments are made to multiply money. But there are also a few that can be used for other purposes and it is important to distinguish between the different classes. Not every investment fits every purpose.

As I just wrote, the classic investments exist to increase money. To do this, you take a certain risk with your hard-earned cash. Examples are investments in stocks, real estate, shareholdings in corporations, trading with everything that has a price or a chart (stocks, (crypto-)currencies, commodities, metals, oil, etc.) and lending money against interest.

In contrast, there are also assets that are meant to store value. Here, you want to have as little risk as possible. The money will be safely deposited so it retains its value over time, and I want to be able to convert it back into cash at any time if I ever need liquidity.

The conventional savings book or the bundle of banknotes under the mattress would be an example, even though the value of this form of money is eaten up over time by inflation. Here, the effect of compound interest is working against us. You don’t see that immediately. Depreciation due to inflation is more of a gradual process that sums up over the years. I myself have stashed away some cash reserves in a safe place, for absolute emergencies. It’s not much, though, because our money is becoming more and more of a returnless risk due to inflation and growing government debt. The actual advantage of cash is that you can spend it directly and at any time. There are no fees when exchanging, as with other stores of value. So it’s great for emergencies where you need some money immediately.

A very good store of value is gold, followed by silver and other precious metals. Gold has retained its value over several millennia. In ancient Rome, you could buy a high-quality toga for a single ounce of gold. Nowadays, this is similar to a tailor-made men’s suit. Depending on the tailor, the price of a decent suit can vary from $500 to $1,000, which is in the same magnitude than the gold price. And about 100 years ago, when the first industrially manufactured automobiles rolled off the assembly line, you could get a Ford Model T for about 10-15 ounces of gold. For the same amount of gold, today you can get a decent new compact car, maybe even a little more. Gold does not yield a return, but it also does not lose its value over time. Therefore, it’s a great way to conserve the value of your nest egg. You even can save some space in your safe.


OK, we are almost done. Storage is the eighth and last criterion. Here, we look at how and where the investment is seated, kept, stocked or shelved. This is important to know because an investment is a long-term affair. You want it to be stored securely, so that it is protected from unauthorized access. Even if the storing company goes turkey.

Most assets today are digitalized. This holds for stocks and other trading assets, where contracts, options or other derivatives change hands. Nowadays, a trader doesn’t get delivered pork bellies or barrels of oil anymore. For storing such digital assest safely, have a good look at the trading house or bank where you want to open your account. What country are they located in? How are they regulated? How is their reputation?

With all the major banks here in Europe and also in the United States, I have no problem entrusting my money long term. In addition, shares, funds, ETFs and certificates are legally treated as special assets, i.e. even if the bank goes bankrupt, they do not become part of the liquidation mass, but the owner has the right to transfer them to another securities account.

I am cautious about all the discount brokers that are available nowadays. I have made some bad experiences here and also heard negative feedback. Many of those discounters do aggressive marketing with low order fees. This looks nice at first. But especially with bigger orders, you might get a higher price for your order compared to a large bank. That’s one way of the discounter to make money and to survive. Alternatively, they may charge commissions that you don’t see at first. My bank tells me the exact cost of an order down to the penny before I press the buy button. The discounter I was before “told” me about various commissions by sending a letter a year after I did the trades. And I guess they would not do that if they were not legally obliged to. But regardless of the business practices, I would rather store my financial foundation at a bank that has been around for more than a couple of decades and has proven that it can survive severe crises.

Unfortunately, it is more difficult with cryptocurrencies. Here, you still have to take care of the storage yourself. Permanent storage on a crypto exchange is as risky as holding a large portfolio at a very young discounter. With that, I would feel comfortable only when spreading my assets across various large exchanges.

Since early 2020, there is a law in Germany that allows banks to hold cryptocurrencies. Much like a foreign exchange account. Yet, there are no offers for this so far. So for the time being, you will have to protect your Bitcoins yourself. But how? This topic is a bit more complex and would go beyond the scope of this article. But I can write about it. Interested? Well, I think you know the link to my feedback survey by now.

Not all good investments are digital. Real estate is the prime example. Houses get “stored” on their respective properties. I don’t think there’s much to say about that. For those who are attached to a certain place, buying a house may just be the right thing to do. And for the digital nomads among us, if you want to invest in real estate, I suggest you also look for a good manager you are willing to give up a slice of the cake.

For your self stored physical goods such as gold, silver or cash, there are basically two options: either you go to your favorite bank or precious metal dealer and rent a safe deposit box or you use the traditional safe in the basement. This does not necessarily have to be in your own cellar. Maybe your parents’ house will do, which has been there for several generations, or you have a summer cottage that is so isolated that you have a good feeling about storing your savings there.

If the cost of storage plays a role for you: the safe in the basement is a one-time cost and the for safe deposit box, on the other hand, you must pay an annual fee. Long-term, a good safe should cost less than a deposit. But it must be moved when you want to relocate. I think it’s a matter of taste. However, the costs are in a range one usually can afford long-term.

In contrast to the storage in a safe, the deposit box has one disadvantage if there should be a prohibition. In the past this has been the case for gold a few times. If such a prohibition comes again, the government would probably pass a law that the next time you visit your locker, a police officer may check that no illegal goods are stored there. That can’t happen if you store your posessions in a safe in the cellar. You just could not sell the stuff affected without risking a penalty and would have to wait until the according law changes again. However, I think it is very unlikely that such a prohibition will happen again in today’s democratically governed countries. After all, this is a massive violation of the right to property, which is guaranteed by almost all constitutions of western countries.

I believe the risks are equally low for both alternatives, the safe in the cellar and the deposit box in the bank. Just choose the option you think you can sleep better with. Of course, you can also divide your possessions and go with both options. This combines the disadvantages of each of them, but a loss will only affects part of the assets.

And last but not least, there are externally stored physical investments such as certificates on precious metals (so-called paper gold), baskets of industrial metals and the like. If you want to invest in such assets, the only advice I can give you is to do good research about the company which issues the certificate or offers the service. Maybe you can also go by recommendations. But for me, the risk of getting rotten apples is too high. I have had a fair share of such assets where something went wrong at some point. I want my investments to run as long as possible. That is several decades and more. A lot can happen in that time. If I’m willing to take personal responsibility for my financial future, then I shouldn’t put it at risk by entrusting my savings for a rainy day to others – and I wouldn’t use physical goods for more than storing such savings, since they usually are classic stores of value that don’t generate any return.


Investments have various criteria, eight on the whole, and we can use those criteria for evaluation. The most important criterion is the annual return, measured as average increase per year in percent. The second one is the total runtime of the investment, measured in years (at least five, preferably ten under real-life conditions), and the third one is the risk. These are the three most important criteria for evaluating an investment.

Each risk has a probability of occurring. But those probabilities are usually difficult to quantify. Experience helps to determine the risks and until you havn’t enough of that, I recommend placing only small amounts of money to start with. But it’s important that you start, that you do something. You can’t get something from nothing. And beware of your gut feeling. It can be deceiving, at least at the beginning of the investment career.

An investment should be as passive as possible. The time I have to invest for maintenance in the long run should be way below a full-time job, a few hours a month at best. Investments must be scalable: even if I invest millions, I want them to work and yield the promised return.

The learning curve must be compatible with my lifestyle and the free time I have available. The investment must be suitable for my purposes (is it used for growing money or for storing value). And finally, let’s look at where and how it can be stored so that someone else doesn’t simply steal it.

So far, so good. This was the last article in the Fundamentals series. You’re now ready to pick the investments that suit you best.

You’ve gotten a lot of general info here that can help you evaluate different investments. You’re probably thinking now: that’s fine, I can go with that. However, work has now only started. Next, I’d have to start researching investments and their criteria and play around a lot with the individual assets to see what is suitable for me. Plenty of people have done this before, can’t someone just tell me about it?

You are absolutely right. I’m already planning the next series of articles that will cover this very topic. But before I go any further, I need something from you. You can probably guess it already; I’ve brought up the topic several times in my articles. I need your opinion.

I want to know how the blog resonates with you. Do you get what you need? Do you like the writing style, and does it stimulate you to read on, or do you struggle to get the information you need? Knowing such things allows me to evolve and give you exactly the value you need.

So, if you want to continue, then …

… tell me what you think!

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