Safe stock exchange strategies: earn money with financial investments


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Text comes from: Steuern steuern. Mit der richtigen Steuerstrategie zu Vermögen und Wohlstand (2015), Sichere Börsenstrategien. Mit 20 simplen Grundregeln und 4 unterschiedlichen Strategien für verschiedene Anlegertypen (2017) by Johann C. Köber, published by Münchener Verlagsgruppe (MVG), Reprints by friendly permission of the publisher.
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To paraphrase Henry Ford, getting rich is easy. You just have to spend less money than you make. Sounds logical right?

Safe stock exchange strategies: earn money with financial investments

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Johann Calin Köber (born January 24, 1956 in Munich) is a German author, speaker, entrepreneur and tax advisor.

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How to get rich easily

Just spend less - that sounds a little too easy. Because whoever manages this faces two central challenges: First, how do you not manage to pay everything in the form of taxes and duties? And what to do with the rest of the money? In view of the falling interest rates, it has long been no fun to rely on savings books, fixed-term deposit or overnight accounts. Even those who choose the top providers usually cannot even compensate for the inflation rate. That is why I have been betting on securities for a long time (and successfully).

However, if you want to emulate me, you should first deal with the basics. Because, in my opinion, there are too many speculative guidebooks à la “Become a millionaire in four weeks” on the market, with this book I want to convey a realistic picture of the stock market. That’s the problem; It is no coincidence that the stock exchange in Germany is of bad repute. Most people in this country are annoyed by the low interest rates, but shy away from a change in terms of money. Various price drops have burned themselves into the collective memory of the Germans. However, if you look at the situation soberly, you will primarily discover the positive aspects. Although the share prices plummeted in the year 2000 - the DAX lost three quarters in a short time - the losses of yore have long been made up for.

How to find the right stock market strategy

This roller coaster ride over the past 15 years confirms a pattern that is also characteristic of earlier stock market phases: prices recover after a crisis, and those who keep their nerves will achieve far higher returns on the stock market than with other forms of investment. I did not know such statistics when I became interested in money and the stock market. Instead, it was clear to me as a little boy that I wanted to become a millionaire one day. This "job" seemed absolutely plausible to me, after all it opens the way to many beautiful things. In other words, my goal was financial freedom. With this in mind, I began to study the recipes of rich people. One of my first discoveries was that the rich don't put their money in savings accounts or overnight money accounts. Rather, they invest it in their companies or look for profitable forms of investment such as stocks. In addition to this first insight, there was a second: It was and is very important for rich people to keep control over their assets. You don't give these to a bank advisor, you decide the right strategies yourself.

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However, you then have to decide for yourself which strategies suit you or what you focus on. Nobody can relieve you of this responsibility. After all, you are already on your way there; this book is an important first step. You will find different approaches that illustrate the range of possibilities. This text is intended to help assess the opportunities and risks of the stock market and to be able to invest strategically against this background. After all, the secret of successful stock market strategies is only to make a profit with the majority of transactions and minimize losses. Anyone who can do that will most certainly have financial success. And that's exactly what I'm about: I want to convey this security to you and show that it is related to personal know-how. After all, most of us don't make our money easily enough to knock it on the head.

Why it is important to be rich

In addition, in recent years it has been shown more and more openly that we even have to be rich if we want to look to the future with some care. After all, we live in a world with a great many imponderables and a constant redistribution from poor to rich. In this situation, financial freedom also means personal freedom, and this is very important to me. However, creating wealth takes strategies. Getting there requires time and know-how as well as perseverance - at least that's what the examples I have considered show. They also make it very clear that all aspects of money are somehow related. Earnings, consumer behavior, wealth structuring, taxes and much more must be optimally coordinated so that a significant wealth accumulation can take place. A comprehensive financial concept therefore seems important to me, which is another reason why this text is not exclusively dedicated to the stock market and the appropriate strategies. It also sheds light on the trappings and goes into the personal and structural requirements that are essential for stock market success. Unfortunately, knowing about promising strategies is not enough, you have to (be able to) apply them.

Many public and private discussions revolve around the desire to have money. Almost everyone dreams of being rich. However, in my opinion it doesn't matter whether you want to or not. Rather, we have to get rich, we have no other choice. This claim may seem a bit far-fetched to you, but unfortunately it has a very serious background.

The pension is not certain

Because the social and economic structures of our society have changed dramatically in the last few decades. The promise of lifelong stability through a good education, a secure job and an adequate pension is less and less valid. Even today, many people need two or three jobs to make ends meet. And more and more often our payments to the pension funds will not be sufficient to ensure a sufficient level of retirement benefits later on. There are also other challenges: We are getting older all the time, which means that the duration of pension payments is increasing dramatically.

The western industrialized countries are hardly adapting their statutory pension systems to these changes. The development described is therefore intensifying. Given this situation, it is hardly surprising that we hear incessantly about the importance of private supplementary pensions. But the meager approval rates for Riester, Rürup & Co. show how little the Germans think of these offers. And in fact, many studies show that their earnings are rather moderate - the low interest rates and various fees are welcome. The question of that Sense of the products advertised makes perfect sense, and it doesn't hurt if we look around for alternatives. Realistically speaking, we will have to live more and more often on our savings or the income from our assets if we do not want to noticeably reduce our standard of living. And this conclusion means nothing else than that we must be or become rich.

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Gut feeling doesn't help

For some of you, this logic may cause a lump in your throat, but the previous lines sound worse than they are. After all, we usually don't have to break anything over the fence; and most of you will have at least a decade to go. During this time, there is the opportunity to proceed step by step and strategically pursue wealth accumulation. Unfortunately, this task confronts us with a problem: This type of thinking is very abstract, and humans are biologically and emotionally inadequately adapted to it. It is difficult for most of us to calculate the long-term development of returns and to derive an investment strategy.

It is therefore very important to switch off your gut feeling and to translate the "I will get rich" resolution into a concrete plan. For this reason, this text not only contains stock market strategies, it is also devoted to inner attitudes, giving a lot of space to feelings and psychological processes. Please do not dismiss the soft factors as "fuss", keep listening to yourself as you read the corresponding chapters and think about how your career as a stock market player has gone so far.

Bad financial strategy - counterproductive decisions

Those who treat themselves honestly are likely to come across numerous situations and decisions that were downright counterproductive. In addition, a closer analysis should usually show that it was not the wrong strategy that was responsible for losses, but rather the lack of any strategy or the breach of one that was once decided. Healthy self-criticism has never hurt anyone. The reassurance of discovering one's own mistakes is that they can be avoided in the future, and the imperative of getting rich loses its horror. In this clarification process we have to keep another important point in mind. Accumulating a fortune is not child's play and there is someone lurking around every corner who wants our money, but we can shape the way there ourselves.

Nobody tells us how we invest, how much we save or how long it has to be. So we have a great deal of freedom, but we have to deal with it independently. But this is exactly where the rabbit is in the pepper. Our psyche often tends to reject the guilt. Too often we calm ourselves down with points that are beyond our control: "I couldn't make a profit, the overall market has crashed." Or: "I had to look after my mother." All of these are good reasons, but they don't help further - especially since there are always suitable excuses at hand. Instead, we should focus on things that we can influence. And we have to find the right path for each individual. This book therefore shows very different strategies. Some hardly require any expenditure of time and others enable or require daily intervention. And because the stock market is not a one-way street, it deals with opportunities to profit from rising and falling prices. Fortunately, there are ways to benefit from any situation and any conceivable framework. At what point in time we go in which direction depends entirely on ourselves. Each individual has to make this decision. Those who focus on those aspects of their wealth that they can control are the driving forces behind getting rich. This also means that the word "must" from the previous paragraphs loses much of its horror.

Rich people don't have to work for money

Being rich enables us to make a change: we no longer have to work for our money, we let our money work for us. But how can this task be accomplished? After all, interest rates are rocketing and a lot of properties cost more than they will ever earn. However, you should also take this opportunity to listen to yourself and look at the asset class that suits you best and that you know best about. If you prefer real estate and you have had a good experience with it, stick with it. If you are not sure, analyze the options before investing. I made this decision, my favorite is clearly the stock market. For me, it is the best and safest way to generate wealth. To many readers, the word “safe” in connection with the stock market may seem rather absurd. Shares are considered speculative and unsuitable for secure financial investments - especially when compared to savings accounts or fixed-income forms of investment. However, a look behind the scenes of money quickly shows that this classification has its weaknesses. It should be clear to everyone that (cash) money is only an addition of value. The decision whether we can buy a certain equivalent value for a euro or a dollar rests with the central banks and thus ultimately with states or governments.

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History has shown often enough that this ascription has not always worked. Many currencies have already lost their value completely, and even today there is a permanent, creeping loss in value - in the form of inflation. Interest of one percent with an inflation of two percent means nothing more than an annual depreciation of each banknote and each coin of one percent. Obviously, cash and savings accounts are not that extremely secure. Anyone who deposits money or gold in the safe deposit box can also fall in. Because in the event of a bank failure or if the government decides certain restrictions, access may be denied. Unlikely? Think of Cyprus, there have even been such measures within the EU. One hundred percent security does not exist with bonds either. These are based on the promise to repay the borrowed money within a certain period of time and also to pay interest on it. It can hardly be guaranteed in advance whether this will actually happen. This warning applies particularly against the background of exorbitantly high national debts worldwide. Because the indebtedness by no means only affects the much criticized "southerners". On the contrary: the USA and Japan in particular have piled up worrying mountains of debt.

The first basic rule: There is no such thing as a safe investment!

What about stocks or other publicly traded securities? Of course there are dangers. But companies like Siemens or BASF have a longer history than the euro or D-Mark; they have survived crises and world wars. 100 Reichsmarks or a German government bond from 1923 have long since become worthless, Siemens shares, on the other hand, have been traded since 1899 and still represent a value today. The reason for this resilience: While money only represents values ​​and requires a consensus on this attribution, shares represent concrete real assets. After all, (almost) every company has buildings, production facilities, goods and much more. Part of it belongs to the shareholder, and governments cannot easily dilute or even confiscate this property.

So security is always relative, regardless of whether it is about the savings book or a share. I did not include gold or other precious metals in this comparison. These are considered to be a safe haven, especially in times of crisis, but in my opinion they have a serious disadvantage: They do not bring any returns, they do not work for us. In addition, an increase in the value of gold & Co. is difficult to predict. They will therefore hardly make a significant contribution to wealth creation. From my point of view, stocks are particularly suitable for creating or increasing your own wealth.

The attitude counts

This also applies because they can be obtained very quickly, easily and inexpensively. A deposit at a bank and a click of the mouse are all it takes to get the share you want. This makes it clearly superior to other tangible assets. With real estate or art, for example, appraisal, buying and handling are much more complicated. In addition, there are usually very high transaction costs. For shares, on the other hand, there is always a clear price, and the valuation is absolutely transparent. We can track supply and demand exactly at all times. Shares can also be bought and sold almost at any time, and we are there with just a few euros in fees.

The general conditions for stock exchange trading are very good, but most Germans shy away from stocks and the like, and many are frustrated due to the lack of success. Above all, false expectations and an inappropriate attitude are responsible for this negative image. Many of us need to make a change first. So it is helpful if doing money is fun. Of course, this fun cannot simply be prescribed, but the potential and results of the strategies described in this book are quite impressive. And on this basis, your own consciousness often changes. Each of you should also be aware that neither the creation of wealth nor the change in your own attitudes can be achieved overnight. If you don't want to give up in frustration again soon, you should proceed slowly and rely on realistic milestones. With the first successes - even if they are only learning successes - the motivation for the further stages grows. In this situation, however, many of you will encounter certain reservations from those around you.

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Asset accumulation: a matter of time

Because a certain aversion to money matters is widespread, and dealing with it is considered a necessary evil by many people. But they prefer to suppress this unpleasant task. But we are often confronted with far more extreme attitudes: money is not only considered gross, many people even express the conviction that they don't have time to worry about their investments. In these situations, however, the question arises for me, why does someone want to earn more money beyond personal needs? If you don't have a plan for it, you don't need any additional income. Because the money will disappear again anyway. "Things" only grow in the desired direction if we take care of them. This applies to potted plants and children as well as to our assets.

And other questions arise from the supposed lack of time: How many hours per day does everyone spend on work? And what is the relationship between expense and income? Let us assume that eight hours a day result in annual earnings of 50.000 euros. So the time investment is enormous, we spend a third of our life at work. Investments are much more effective. Those who have learned to achieve a reasonable return can generate high income with just a few hours per week or month. And supposedly there is no time for that? This argument seems absurd to me. The attitudes described mean that the savings remain with the house bank, the advisor selects a few funds, and the bottom line is that two or three percent return per year jump out.

The finance license: If you start without knowledge, you make mistakes

But when it comes to investing money, it's the same as when it comes to taxes: if you let the responsibility go, you literally have to pay for it. A sustainable and noticeable accumulation of wealth is as good as impossible, the mentioned two or three percent return will hardly be sufficient. Anyone who wants to add to their traditional sources of income such as salary and co. Long-term and noticeably needs alternative paths. Strategies are needed to better invest your own savings. There are, but they require know-how and the willingness to deal with the topic of money. You have to be willing to sacrifice your time for this. I mention this willingness explicitly because you will be unlikely to be successful if you lack the right attitude to investing. This is also true because across all social classes it is downright chic to flirt with one's own ignorance of mathematics. When it comes to literature, history or music, most of them profess the educated bourgeoisie, but at the same time many of these people have no problem giving the math loser. But anyone who, out of sheer anti-math arrogance, fails to recalculate the supposedly surefire recommendation of their own financial advisor or banker should not be surprised by the red numbers in their own portfolio.

Because basically investing money is no different from driving a car or laying tiles: Anyone who starts without the necessary knowledge makes mistakes. It's not for nothing that we are only allowed to sit behind the wheel with a driver's license, and every craftsman does an apprenticeship for a few years. The accumulation of assets and the involvement in the stock market are also work and require know-how. Unfortunately, the term “passive income” does not apply. The more success or returns you strive for, the more effort is usually required. Therefore, you should decide at the beginning of your stock market career which goals you are aiming for. In what time frame do you want to save what assets? How much time can you spare per day, per week or per month, and how much can you start with? In addition, there is another, central set of questions about activities on the stock exchange - this also exists in connection with all other transactions: Do you know the risks and do you want to take them? Answering these questions will determine which financial strategy is right for you.

Analyze your financial behavior

So before every transaction and every deal, there is introspection. We need to look inside ourselves and ask ourselves what makes us tick when it comes to finances. Please be honest with yourself! All enthusiasm for a strategy from this book and all noble goals are of no use if the necessary consistency in implementation is lacking. The euphoria almost always ends in frustration, and in the end there is less money than at the beginning. I would like to emphasize one thing again: I do not give any rating when analyzing the behavior. It is not a question of whether, for example, spending money is "good" or "bad". In this book I am only showing ways in which you can use the stock market to make greater fortune. And I make all the conclusions against this background: Is a certain behavior suitable for accumulating wealth? And first of all, it is about finding the right path for yourself. You will find indications of your own attitude and your own relationship to money in your actions over the past few years. This is often where things get both exciting and frustrating.

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Have you ever observed and analyzed your financial behavior closely over a period of two years? The income side is usually described quickly, salary and perhaps even capital income can be easily identified. Much more difficult, but also more illuminating, is the view of the expenses. Because this provides information about how you tick financially. Those who do not achieve a savings rate despite reasonable income and who also lack the reserves are guaranteed to have difficulties in building up their wealth and should analyze how this situation can be changed. Often there are “dead bodies in the basement” on the expenditure side, for example long-term supply contracts or subscriptions to facilities that have long since ceased to be used.

Your personal income and expenditure account

In such cases, it is helpful to write down all expenses for a year - please on a piece of paper so that it is visible in black and white - and to check them very critically. Even if you can save only 50 euros per month, this step is an important start to a heightened awareness of money. The attitude is changing! You can define goals and develop yourself further. Because one thing is very important: if you start small, you don't have to end small. And like everything in life, you have to learn how to handle money. Unfortunately, financial know-how is neglected in our society, although money plays a central role. Learning units on the basic principles of housekeeping or on the mechanisms of money and banking are almost completely absent in school. That is why we are mainly shaped by what we experience at home and from our immediate environment.

In addition, we rarely question these learned behavior patterns and automatically act in the same way as our environment. We can hardly get out of our skin when it comes to money, regardless of the current situation. Incidentally, various studies on lottery winners cast a spotlight on these mechanisms. If "poor" people win large sums, 100 percent of this usually goes into consumption, and all those dreams are gone very quickly. Afterwards, these people are poorer than before. There are simply no strategies for holding a fortune. But it is precisely these that are absolutely necessary if we want to become and then remain financially independent.

The second basic rule: We can learn a lot from the rich!

The mentioned experience is also very much determined by emotional factors, for example fears influence our behavior with regard to money. Because this influence is very great, this book contains a separate chapter with an extensive insight into the psychology of the stock market. In this context it is instructive to take a look at the behavioral patterns of rich people. On the one hand, they attach great importance to investing their money. And an investment does not consist of a fancy car or the latest smartphone. Investing means: investing your own money in such a way that it generates income. On the other hand, the rich structure their money in such a way that wealth growth is even possible. For this they try to create the optimal framework conditions.

Almost all wealthy people, for example, have companies, corporations or foundations. This enables you, for example, to exploit tax potential and offset costs significantly better. Where, for example, cars or telephones are a burden on private assets, they reduce the tax burden in the company and thus even have positive effects. In any case, it is possible to structure a large number of expenses in a tax-optimized manner and thus reduce personal money requirements. Those who only "branch off" as much as they need to live and invest the rest will usually achieve a considerable increase in wealth very quickly. To become financially independent with the help of the stock market - or other investments - requires the right framework and the right attitude. And this includes the entire behavior of each and every one of us with regard to our own finances. If we do not optimize our income and expenses permanently and do not know the financial mechanisms behind them, the lottery jackpot or stock price explosion will not help much.

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