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Text comes from the book: “The Smart Investor's Handbook: Why Choose No! earned the most money and with which major shareholders you can go to bed ”(2016), published by Münchener Verlagsgruppe (MVG), reprinted with the kind permission of the publisher.

Here writes for you:

Dr. Markus Elsässer is considered one of the best bankers and fund managers in Europe. Alsasser grew up as the son of an ambassador in London, Hong Kong and Paris. After a banking apprenticeship and business studies, he worked as an auditor before being voted one of Germany's top ten young managers by Manager Magazin in 1986. His industrial career began as Finance Director at Dow Chemical Germany, then he was in Sydney as General Manager for Benckiser and finally in Singapore working as Managing Director Asia-Pacific for the Storck Group. Since 1998 he has been an independent investor and fund advisor as well as the founder of the ME funds, which he has been in charge of for more than 14 years. For several years he worked closely with the well-known New York stock exchange trader Guy Wyser-Pratte. In 2012 he also founded the sports management company Rolfes & Elsässer with professional soccer player Simon Rolfes. He has over 40 years of stock market experience and is a consciously independent investor with great passion. His investment style is characterized by a deep understanding of the business world and its global interrelationships. As one of the very few, he combines practical management experience in industry, including in foreign cultures, with in-depth financial knowledge. As a columnist he writes for Wirtschaftswoche, the magazine BILANZ and as a guest author for wallstreet online.

Invest successfully in finance: earn money, let others work

Wealth is mostly based on smart long-term strategies and perseverance. Then you can let others work for you in your sleep. But long-term thinking is not that easy.

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Invest long-term - get rich in a sleeping car

The successful long-term investors enjoy a good reputation on the stock exchange. They are considered like dinosaurs who, in a distant time, could seize the opportunity. "Yes, back in the 80s and 90s, yes, the shares were still cheap back then." It is completely overlooked that a long-term and consistent investment policy fundamentally increases the chance of asset growth significantly. Unfortunately, this has been forgotten. The financial system of the big banking industry prefers short-term action until the next picket fence.

When was the last time your bank or financial advisor advised you to keep an attractive share or a first-class fund in your portfolio for at least ten or 20 years? Even in times of financial turmoil? Have you been shown the great success stories of how such long-term investment approaches have paid off for other investors in recent times? Never? I wouldn't be surprised at all. The success stories are obvious. Look at the price developments over long periods of time and realize how quickly these periods of time have passed in the end. I would like to mention only two examples here.

Nestlé shares were quoted at EUR 2003 in April 18 and had risen to 2016 in April 65. And on the Frankfurt Stock Exchange, Darmstadt-based Merck KGaA also performed exceptionally well with an increase in value from 23 euros to 104 euros in the period from March 2003 to April 2015. This pattern has been in place since the Second World War in stages of ten to 20 years . Exorbitant asset growth of this kind is therefore no exception in the years 2003 to 2016. In addition to the pleasing price increases, there was also a warm dividend shower for many stocks. And that with an upward trend every year.

Longevity counts

Many investors simply do not want to admit this. The well-kept secret is seldom revealed: patiently sitting out in first-class values ​​was and is the best method to get ahead with your capital stress-free. A value investor friend of mine calls it this: "Get rich in a sleeping car". It requires a rethink. Let's use an old formula. When determining the equity quota, the rule of thumb used to be: "100 minus age". So if you were 30 years old, you should invest 70 percent of your wealth in stocks. Those who were 60 years old, on the other hand, only hold 40 percent of the shares. The same approach was taken on the subject of “holding time”.

For 20 years now, I have seen ourselves as pioneers in a statistical no man's land. In times of ever better medical care, with a life expectancy that can easily exceed the 100-year limit, I interpret the word "long-term" differently than in my youth. I am all the more in favor of long-term prospects for investments since fixed-interest income has been set to "zero", as it were.

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In the previous scheme, the typical investor is used to thinking (possibly under certain circumstances) long-term only in the period from 40 to 60. But today the sixty-year-old is advised to invest again with an 20 year perspective. Because 80 is not an art these days. In view of the uncertain state pension provision, I would fundamentally align my investment strategy with the long term. Regardless of my age. On the way to real financial independence, traveling in a sleeping car is simply more comfortable.

Just do nothing - a good stock exchange rule

The old stock marketers have always known: "Back and forth, make your pockets empty." However, the broker and stock exchange industry is looking for as many transactions as possible. Smart investors are prudent and calm. They follow advice that bankers rarely hear: just do nothing!

Warren Buffett (85) once said in Omaha: "There are times on the stock market when the brilliant investor is characterized by doing nothing." And his companion Charlie Munger (91) from California stated: "A really good stock is the one you can sit on for long years. ”This has nothing to do with a plea for laziness. However, it is mostly misunderstood that a fortune does not arise overnight. It has to mature. Instead of nervously studying the stock market comments every day, the level-headed investor can do better with his time: reading, listening to music, doing something for your health.

Beware of actionism

Building wealth has nothing to do with activism. A long-term strategy is required. It boils down to a simple formula: building wealth is not that difficult, but quite boring. And there are still stocks today that offer this long-term potential. Take a look at the Fielmann AG share. In the past eleven years, the value has increased more than fivefold!

My grandmother's childhood friend, Walter Beiler, was a well-known broker with headquarters on the Frankfurt and Düsseldorf stock exchanges during the economic boom. "What the boar in the forest is on the stock exchange Walter Beiler," he was described in the press. As a young man, I visited him in 1973 in his stock exchange office in the gallery of the Düsseldorf stock exchange. Carefully and quietly, he pointed out a colleague in the next office and said to me: "Watch out, he's a really great man with stocks. It often doesn't do anything. ”At the time I was amazed at this statement. Today, more than 40 years later, I appreciate his advice.

Building Wealth: The Ten Percent Model

Most workers run into a pension gap in old age. It is not the government's fault. There is a good solution for young people who are just beginning their careers. Financial independence in old age can only be achieved through a long-term strategy of saving behavior. Systematic saving forms the basis for later capital investments. The word "save" sounds a bit old-fashioned and is currently not popular with many people. But without the simple "spend less than you earn" pension benefits will not work.

What is the best way to approach this topic? What should you recommend to young people? A simple but effective savings model comes to mind from my past: When I started my career at Dow Chemical in the 80s, we had the option of investing 10 percent of our gross wages in company shares. The nice thing about the model was that this 10 percent of the gross wage was withheld from the outset in the payroll every month. So you never even got hold of this savings amount. It was as if the monthly salary had been cut by 10 percent.

The automatism of this savings model is the linchpin. The system of basing your consumption and spending behavior on a 10 percentage point lower salary from your first job is a good way of setting the course. With every increase in salary, the deductible savings amount is increased accordingly: always 10 percent of the gross salary. Whether the employer withholds the monthly amounts or whether you organize yourself by means of a standing order is ultimately the same. Anyone who uses this savings model continuously, month after month, winter and summer, for decades, without going back and forth, will one day be amazed. Without ever having felt a restriction in his life, the employee grows a considerable fortune.

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2 responses to "Successfully investing in finances: earn money, let others do the work"

  1. FnniFlure says:

    Helpful contribution

  2. Herbert says:

    Thank you for the great contribution. What Makes a Blog Post Great? That can actually be anything. The beauty of the internet is that there is no limit to the number of things you can learn about.

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