WISDOM – Learning Chinese, materials

***🚧work in progress🚧***

Learning Mandarin Chinese has been a journey since Business School days. Least is to say that my study has been irregular but it gave me the opportunity to try a bit of every possible method! In this post I will propose some tips, based on my own experience to make the learning journey more enjoyable.

Apps

Apps are an efficient way to get a daily Chinese practice. Although you may not achieve fluency by only relying on such medium, it will contribute to memorisation and to increase your vocabulary. Given these two aspects are fondamental roots of language learning, I strongly recommend you include the App in your Chinese toolbox. My preference goes for Duolinguo.

Podcasts

I like to use podcasts to practice languages hence I have looked for useful ones when it comes to Chinese

  • Talk Chineasy is my favorite one. This daily podcast helps to learn new vocabulary. The format is very short and it work by idea association, linking the works you are learning to some of the participants personal stories. This facilitates memorization.
  • Coffee Break Chinese is a very well build ressource. It’s based on dialogues in basic situations. It’s actually much more demanding than the previous one but will do the work if you are serious about learning actual Chinese conversations

Flash cards

This is my go-to language practice.

MONEY – the only rule you need to know to get rich

I read countless books on Investment, Business or Entrepreneurship. Each successful individual has indeed a deeply personal and specific story, this is what makes the reading interesting. However, when it comes to Wealth Management or Wealth creation, there is a single golden rule: to get and remain rich, you need to buy assets.

I’ll borrow the definition of Asset from Robert Kiyosaki (if you never encountered this name, I recommend you get yourself a copy of Rich Dad, Poor Dad). An asset is something that puts money into your pocket, without requiring you to work. On the flip side, a liability is something that gets money out of your pocket while you sleep. See the difference?

An asset can indeed take many form. It can be stocks, real estate that you get a rental income from, a company, some intellectual property (such as a book) or even a YouTube channel.

Why your job is not an asset? When we work we trade our time against money, hence we are actively processing some tasks. That makes you somehow an asset for the company’s shareholders.

Studying rich people, you quickly realise that they direct a significant amount of their revenues to buying assets. Did you know that most of Bill Gates wealth for instance is not made of Microsoft shares or cash?

It does not matter if you have very little savings. The only rule you need to follow is actually to dedicate some amount of your revenue to buy assets. Over time, these assets will generate cash-flow (revenues) that will contribute to your financial freedom.

Let’s recap with that simple video from Robert Kiyosaki:

Read this post on passive income to get to know more about assets you can buy.

HEALTH & WISDOM – Yoga

I started yoga a few years ago thanks to a friend who practiced yoga as part of his overall fitness activity (focusing primarily on CrossFit). Given my natural restlessness and lack of physical flexibility, yoga seemed an interesting skill. I decided to embark on a “fast-track” by taking 10 hours of private coaching with my friend’s teacher. I quickly arrived to the conclusion that this practice was probably much more demanding than any of the physical practices I was already involved in (boxing, cycling, running…) but also that it would require much more than 10 hours to get to understand the basics. Hundreds of hours and few year later, I am still on the journey.

This post is about thoughts, readings or references that help(ed) me in my practice. Please feel free to share any reference in the comments.

Main practice: Iyengar and Hatha

Occasional practice: Vinyasa

Where to start?

If you can afford it, I strongly recommend you start your yoga journey with some small group coaching, ideally 1-1. This will help you to get the basics right and profit solid ground for your future practice.

Which type of yoga shall I start with?

My opinion is to start with a non-dynamic practice so you can focus on learning the poses (called asanas). This means I would favour Hatha to Vinyasa, until you feel comfortable with the basic sequences.

Can I practice on my own?

Indeed you can practice on your own anytime, anywhere, as soon as you feel comfortable with basic sequences such as sun salutation. You may want to get yourself some good yoga mats and props, see some suggestions here.

What Yoga brings to me?

Yoga helps me to bring stillness to my days. It enables me to pause the flow of thoughts and focus on present.

Yoga helps me to connect with my breath.

Yoga helps me to lengthen my body, increasing flexibility and comfort in movements.

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Guidance from teachers that I pounder

  • Broaden the back of your knees
  • Relax your eyes
  • Go beyond your mind (your body is capable of more than what your mind can believe, don’t let this refrain you)
  • Spread your palm, all the palm shall be touching the floor

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Notes – mat wisdom

In warrior 2, push the inside of the front foot and the outside of the back foot. That will help to maintain the full contact of the sole and increase grounding.

No meal in the four hours preceding the practice. No fruits or small bites in the two hours preceding the practice.

Scheduling appointment right after the yoga practice disrupt the practice itself as the brain is disturbed by the next appointment. Better a shorter practice to allow transition time between practice and next activity.

References

B. K. S. Iyengar, Yoga: The Path to Holistic Health, 2001

WISDOM – Business bookworm top tips

Countless people want to read more or to get back to reading yet it can be a difficult process. Here are some tips that help me to stay on track with my reading appetite for non-fiction books.

#1 – Know your classics

The more you read, the more you realize that business books tend to build on top of each other. It does make sense, as, in every discipline, people tend to drill down on the experience they gathered. As global knowledge progresses, people tend to absorb extra new knowledge and then to experience on the back of such knowledge. More recent books consequently tend to focus on most recent knowledge addition, on a specific topic. This indeed applies to business books.

Although I don’t recommend for the benefit of time that you read every single book in a chronological order, I would advice to follow two simple rules: build first overall knowledge in the discipline, second read the milestone publications. After these two steps, you shall be ready for the more recent specific books. Let’s say you wish to build up your marketing skills; instead of going straight to the latest digital marketing book, I would advice to spend time to read a couple of general marketing books and a handful of milestone more specific books (already recognized as of major influence) before you consider anything else. This process will help you to make the most of the new and specialized book, as you would already have significant background on that discipline.

#2 – Keep reading lists

Either a Favorite-Read, a To-Read or any kind of topic orientated list will do. Such list, first, gives a sense of achievement, also it helps you to pause and reflect on your reading and learning journey. Given the brain relies heavily on idea association, seeing the book names together facilitates memorization of key concept and cross-checking of learnings. I also use reading lists to answer the recurring question: “what do you think I shall read?” or “where shall I start?”.

My personal reading lists have now been shared across thousands of curious readers, namely thanks to social networks. I am personally a fan of Kit.com that offers an intuitive and attractive interface to store your reading lists. Sharing my reading lists also helped me to gather new reading suggestions.

#3 – Take notes

Although it slows down your reading journey, I encourage that you take notes while reading non-fiction books. This contributes to idea generation, reflection and memorization. It also saves a lot of time when you are trying to get back to a concept you encountered. I usually take notes both directly on the books and on notepads (or iPad) depending of the use I have in mind. I encourage you to write directly on the books the initial thoughts arising while reading. It’s been of invaluable use for me, namely writing down real business situations that could be relevant to the concept I was reading, then I can carry on the reading and come back later to reflect on this experience.

#4 – Talk about your readings

I used to remain discret about my non-fiction reads. I had the idea that most people are not interested in such topic and have only remote interest for any kind of business related pages you read last night. Yet, I started to realize that as people would see me carrying books that tend to ask questions about the book itself or my reading habits. This is powerful ice-breaker, including in business situations and made me realize that there are much more readers around me that I imagined. Talking about my readings also helps me to practice my summary and synthesis skills. I also tend to get challenged on the concepts from the books – while I would sometimes simply accept the books as wisdom raw material – which contributes to build up my personal thinking. Finally, I got fantastic book recommandations from very experienced readers by the simple fact of talking about books.

#5 – Gift books

One of the reasons I write is to express the need to share this wisdom with my friends. Regularly I experience during my reading the urge to share a great piece of knowledge because I genuinely believe it could help the people I deeply care about. Yet, life teaches us that unsolicited advice is usually detrimental to both the adviser and the advisee. To bridge this gap, I started to buy several copies of the books I really consider useful for me, and regularly gift them to my friends, business relationships or people who helped me. Not only the action of giving a book tends to be regarded as a very generous gesture – as you not only provide an item but also the wealth of the content – it nudges the receiver of the gift to pay attention and maybe prioritize this book. For instance, when my girlfriend gift me books, I will tend no only to try to read it soon (to show gratitude) but I tend to pay extra care as someone I care about and that knows me considered it was worth my time and effort.

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I hope you enjoyed this short pieces of advice!

#keepreading & #keeplearning

WISDOM – Exploring the power of Priming

[work in progress]

I believe my first encounter with the concept of Priming was thanks to Tony Robbins’ interviews by Tim Ferris, but it’s thanks to Nobel prize Daniel Kahneman* that I began to use this almost daily.

What is priming?

Priming consists in orientating the brain thinking thanks to hints, actions or associated images. In his book Thinking, Fast and Slow, Daniel Kahneman offers the analysis of an experience. Participants are made either smile or frown and then asked to rate the humour of a cartoon. People who were made smiling rate on average the cartoon funnier. What does this mean practically? That putting a physical smile on your face will get you more sensitive to identifying humour.

How is priming used nowadays?

Priming is studied a actively since the 1980s and has since been adopted by countless brands for their commercials. Subliminal images projections (projecting images for a very short period of time – ie long enough for the brain to perceive it but actually to little to really see it) has found its way.

How you can use priming?

I use priming to settle into specific mindsets. For instance, pausing and experiment gratefulness in the morning (something you can borrow from coach Tony Robbins) helps you to feel more grateful along your day. Thinking about your past successes (or surrounding you with an environment that speaks of quality) helps to increase your focus and boosts your creativity.

This gives credit to the old “fake it till you make it”. By stepping your mind into the “achievement mindset” you can visualize success and work toward it. That also helps you to raise potential benchmarks (I will publish a post dedicated to benchmark setting based on a workshop I attended).

Mediation and prayers can be studied as an act of priming as they contribute to put the participant into a specific mindset.

References

Tim Ferris, The Tim Ferriss show,

* Kahneman D, Thinking, Fast and Slow, Chapter 4 – The Associative Machine

WISDOM – The motivation quest

Motivation is the most valuable currency

Internet is full of motivational videos: business, health, knowledge… you name it, achievers are all over the place. Yet, it’s somehow strange that with such an amount of motivational wisdom out there, some of us still fall short on their health, relationship or money goals.

Don’t get me wrong, not blaming any motivational material consumer, but trying to understand the paradox.

Are we really lacking of ressources? Are we lacking of strategy? Let’s take the example of fitness: how difficult can it be for someone to have access to a relevant fitness program? Answer is simple: none, just Google it you will have thousands of FREE programs, some of them by the best in the world without any equipment needed (hence no money needed, not even access to a gym). So why is it that we so often hear people complaining that they don’t manage to keep up with their fitness goals?

This is all to do with motivation: people simple don’t want it bad enough. They are not ready to commit to the idea of doing what it takes to achieve this goal.

Let me introduce you to Dan Lock, an interesting motivational speaker that probably puts it better than me:

What Dan says might remind you of some of Tony Robbin’s speachs on “ressourcefulness”, that the same concept. According to this theory, in most cases, people tend to quit because of lack of apparent ressources yet it often proves that ressources were not the real cause. Individual tend to stop too early, while style learning, as the ongoing process is painful and unrewarding, Of course we can always find means to ease the process (think gamification for a moment) yet the ugly truth is that the process of marking hurts – and keep hurting.

Let’s spice up things. Say that you now live in a world without social media or smartphone. This means a world with only a remonte amount of distractions compared to what you may experience today. Then people are more likely to commit emotionally to that things that matter for them such as family, academics or their job. And the reason would be simple, most of the days would be boring otherwise. Now let’s get back to real world: today’s absence of action (or procrastination as often labeled) is in fact a very confortable state. If you have not seen it, please take a moment to watch this video from Simon Sinek on millennials. Pay attention to the connection between addictive substance such as drugs or alcool, and the physiological effects of our own smartphones.

My point is, motivation is already so difficult to build up, and yet we have to face so many distractions that have proven highly addictive effects.

How you can build a motivation scheme

The only point of this post is to encourage you to build your own motivation scheme to ensure you step and stay on your own path. I was fortunate enough to find my path early on – at least relatively compare to what I can see around me – so take this as a piece of experience (it does not mean it can work for everyone).

  1. Define what you want to achieve
  2. Make it your priority – read the article here
  3. Until this priority becomes a habit
  4. Assess and correct, regularly

With such a simple scheme – accessible to anyone and adaptive to any situation (business target, relationship, sports…) you own your key to your motivation. Make sure you use it correctly!

Please let me know your thoughts!

HEALTH – sous-vide cooking for all!

Anova story to come soon!

What is sous-vide cooking?

Sous-vide is a method of cooking traditionally used by professional chefs to achieve optimal cooking precision. It enable to cook and maintain any product at a very specific temperature. For instance, it enables you to cook this steak perfectly pink hedge to hedge, yet retaining most of the juices inside.

Sous-vide is also an healthy way of cooking your food as you won’t need to use additional fat (or very little, simply as a finishing or seasoning touch). As you may have read in previous post, I dedicate of lot of interest to nutrition hence this newly accessible healthy cooking is indeed appealing to me. It shall be even more attractive to those looking to increase their protein intake but who need to remain very strict with the amount of fat intake.

Historically this method of cooking was reserved to professional kitchens as requiring very expensive machine. That was before Anova introduced the following device. This is an unpaid review by an very happy customer.

Let’s what this introduction video:

I have now used Anova for several meat and fish products. I am impressed by the quality and easy to come out with a perfectly cooked dish. It also helps me to reduce the attention time I need to spend in the kitchen while I have people at home.

You can buy the precision cooker from Amazon with a discount current here.

Regarding beef

I’ll recommend using learner meat that you may usually have given the sous vide cooking won’t dry the beef as much as a pan cooking.

MONEY – Passive Income – reflections on new ways of making a living

[work in progress]

Why am I interested in passive income?

I am primarily interested in passive income not for the purpose of making additional money on top of my job but for the freedom it can potentially give. I consider passive income as an opportunity to break from the traditional day job and to dedicate more time to the people and the passions you love the most.

Let’s define passive income first. Passive income is the ability to earn money while you’re not actually performing a task. Another way is to understand what is is not: an active income is a trade of time against an wage, based on qualification or abilities.

They are countless examples of passive income strategies for instance investing in stock market and order property rental, but also books, online courses or even a blog or a YouTube channel. Thanks to Internet the ability to generate passive income is reachable too many across o’clock

Tim Ferriss books have inspired thousands to change their lifestyle, some of them through passive income.

Finding your own passive income strategy

I categorise passive income in two subsets first one is passive income link to your passions where are you actually perform something that you enjoyed doing. You can create a frame to incorporate an element of cash flow generation. The second subsets is purely based on making money. Taking the stock market as an example: investing in stocks would be the later m but if you were write a blog about investments and you happen to generate revenues thanks to the ads, that’s the first subset. Both can come in different scales and ambitions.

In all cases, the most important is to put the right amount of initial work on to kickstart the engine.

Personal interest based passive income strategies

Let’s focus first on personal interest based passive income. Idea is to leverage on something you are genuinely interested and passionate about and produce content. Chances are that across the Internet few hundreds of people that share the same interest. Let’s see you enjoy baking, why not putting your favourite recipes on a blog or shooting little clip with your smart phone and upload it on YouTube?

Examples of personal interest based passive income:

  • YouTube channel
  • Blog
  • E-books
  • Affiliate marketing

Business based passive income

As for this category you’re not trying to leverage on any specific passion you may have but looking to tap an opportunity. Real estate can be put in that subset.

Examples of business based passive income include:

  • Stockmarket investing
  • Real estate rental
  • Shipping goods
  • Professional blog
  • Online courses

The content generating step is crucial And often overlooked has people spend most of their interest in trying to get the content viral. Indeed that would be an important step but content comes first.

Take a moment to listen to this podcast episode by Tim Ferris about single people business generating over seven figures revenue – here.

About kit.com

I am a fan of the website kit.com that helps you to build recommendations and integrates automatically all the elements of affiliate marketing. I use this primarily to build up and share reading lists. As reading is a main passion and activity for me, I always enjoyed recommending books to my friends and kit enables me to do it on a much higher scale.

MONEY – Investing: practical thinking from investor friends and trading floor experience

The following article does not constitute financial advice. Please always consult a regulated financial advisor before taking investment decision. I am not qualified to tell you what investments are relevant to your personal situation.

This post is about my experience as an individual investor who started and keeps maintaining his own investment portfolio. I was able to generate recurring income over the last years, leveraging on simple principles and my professional experience. I realised that it takes much less time and effort than I initially imagined. Here is the story.

Few years ago, despite spending most of my days surrounded by successful professional investors, I realised I had never really started to take care of my own money. As I finally started my journey as an investor, I documented it via a previous blog (no longer online). This page is a digest of what I learnt and the principles I follow.

Before going forward, if you are serious about setting you investment portfolio, make a rather small investment to build up your knowledge with three books Tony Robbins’ Unshakable, Robert Kiyosaki’s Rich Dad Poor Dad and Ramit Sethi’s I Will teach you to be Rich.

Personal investment Principles

  1. Think long term
  2. Diversify
  3. Keep it simple
  4. Do your research
  5. Accept the truth

1. Think long term: making money over a short period of time and being systematically right about your assumptions is something that almost no professional fund managers is able to achieve. That means you need to accept that you will not be able as an investor to make systematically significant short-term positive returns. Having said that, over the long run, stock markets have an upward trend and compounded interest (from stocks dividends or bond coupons) will add-up to generate additional capital.

Consider that over the last 90 years, the American stock market annualised return, represented in our post by the S&P500, is above 9%. I am sure that strikes you as being much higher than any deposit that your bank can offer. The trick here is the timeframe: 90 years. Individual investors may be able to capture significant average return with much higher probabilities if they increase their time frame: contrary to your job, you can’t expect regular payout increase.

Another reason why I use long-term thinking is that I wish to benefit from global trends. Several leading Private Banks recommend to their wealthy clients to rely on global long-term trends as a compass for their investment. Let’s consider the Private Banking giant UBS, which is recommending to invest in companies linked to Automation and Robotics, Education services, Emerging Markets healthcare or Energy Efficiency. Don’t you think that these industries shall enjoy a significant growth cycle from where they are now? But can you say when? Would it be next year or in 10 years time? My personal answer is that I do not mind, as my ultimate conviction is that such industries will eventually go though a strong cycle. It does not matter which industries you actually have the highest convictions on. As for me, I believe automation will be a significant driver of growth and transformation, that is why I decided to invest in BOTZ US ETF. Solar energy is also a conviction play, that is why TAN US ETF is also part of my portfolio. Another long term strategy I use is to invest in emerging markets – see next paragraph.

Emerging markets – unlocking long term value

Before we start, let me highlight that there are actually two major risks you need to be aware before you invest in emerging market: companies (be it through stocks or bonds) present a higher level of risks, due to local regulation and domestic markets realities, second (and too often overlooked by investors) the currency may depreciate, which mean that although the asset value may appreciate, your actual investment return in your reference currently (let’s assume US dollar) may be negative. Having said that, I am a strong believer in Emerging Markets and they represent a significant part of my portfolio.

To reduce the transaction costs (see definition below) associated with such investment, a broad Emerging Markets tracker could be useful. A well known tracker is the Vanguard FTSE Emerging Market (VWO UP) that is a global Emerging Markets Equity benchmark. I’ve used this tracker in my portfolio.

Many investors are eyeing to Chinese onshore market, as one of the potentially most attractive Emerging Markets. I am a strong believer in Chinese economy over the long run due to the country’s transformation and the development of a middle class on a large scale. To access this market, one may use the tracker called China AMC CSI 300 (3188 HK). I use this tracker in my portfolio.

Investors may also overweight specific countries that they are confortable with or particularly knowledgeable about such as Russia or Vietnam (you can find trackers for most countries).

Another area of interest for Emerging Markets could be Fixed Income securities. Here it becomes even more important to consider the currency risk. I personally stick to bonds issued by Emerging Markets governments (so called Sovereign bonds). An investor interested in domestic currencies may look for the VanEck Vectors J.P. Morgan EM Local Currency Bond (EMLC UP) or if he would favor USD denominated ones, he could elect Vanguard Emerging Markets Government Bond ETF (VWOB UP) . I use the former.

Unless you have a specific knowledge about Emerging Markets, it may be quite a risky decision to put any money on this asset class. Make sure you are getting advice from qualified professional.

2. Diversify

After reading the previous section, you may imagine that my portfolio is a mix of Technology and Emerging Markets, concentrating a very high level of risk. That is why the second principle is probably the most important of all: diversify.

Asset Allocation may sound to many as a fancy word, but this is nothing more than splitting your investments into different buckets that serve different goals. To me, it is probably the single most important rule of the money management game. Additionally, building up a “safe” bucket shall be a priority and I encourage you keep adding to this bucket if and when you manage to make money on more risky investments.

Let’s bring to the table one of the world’s most respected investor, Ray Dalio, founder of the Hedge Fund Bridgewater. After decades of successful investment, even such a manager came up with the conclusions that it would close to impossible to predict market movements and decided to rethink his approach to investment. He looked for a way to build a portfolio that he would hold for the long term and that could do reasonably well across different economic cycles. The backbone of this work is diversification across different types of assets. By diversifying enough the portfolio, Dalio and his team believe that the All Weather approach is sustainable over the long run, to the extend that Dalio’s personal trust money is now allocated to such portfolio.

The below screenshots are directly from Bridgewater’s website (see sources section for the link). In the first one, you will see the different risk adjusted return of the different asset classes. What Dalio is trying to explain is that over the long run you do not give up returns by diversifying to asset classes that have lower historical return: you will be potentially able to extract more sustainable returns thanks to diversification.

This second illustration is how Ray Dalio simplified the view of economic cycles and associated different asset classes to each scenario. This approach to economic cycles (and their two major drivers) helps to select asset classes that benefit historically from such scenarios. By putting them together, Bridgewater team anticipates to be always able to benefit from the ongoing economic scenario.

At this point in time you may wonder how you can invest in Bridgewater All Weather fund. Also it would be indeed an attractive idea to many, unless you are extremely wealthy, there is little chance that you will be able to join the hedge fund investors as the minimum ticket size is significantly high. Yet, you can indeed be inspired by Dalio’s work to build up a robust portfolio. By studying the All Weather fund I decided to add Inflation Linked Bonds to my own investment (both USA and Europe government bonds for me).

Can cryptocurrencies be part of a diversified investment portfolio? Cryptocurrencies such as Bitcoin and Etherium gained a lot of popularity with investors, especially since 2017. However, cryptocurrencies for now still have some high level of correlation with US stock market hence may bring less diversification to the table than anticipated.

3. Keep it simple

Unless you have a lot of time on your hands and a passion for the stock market, I believe it is best to keep your portfolio simple. I observe two rules:

  1. Whenever possible, prefer trackers to individual stocks
  2. Review the portfolio only quarterly (you may even prefer a longer timeframe)

The reason for preferring tracker is that it helps you to gain exposure to a significant number of equities or bonds via a single trade. It also prevents you from handling most of the Corporate Actions (administrative requirements when you are holding a stock, such a voting rights for new stock issuance). As for the number two, there are many fact-based evidence that support it, but my favourite story comes from a portfolio manager I met in 2014 and shared with me that over the last fours years, each year he would set-up in January an allocation strategy for the year and try to stick to it all year long. Yet, every year, due to market new or specific information, the portfolio manager ended up marginally changing the strategy, trying to capture short term profits. As he wanted to assess how much these deviations form the strategy was bringing to the return, he realised that they only ended-up in negative or minimal contribution, while most of the time increasing the risk position. If even a full time portfolio manager (with a successful track record) admits difficulty to capture long-term profit by ongoing marginal rebalancing, I consider than I would rather dedicate my personal time to other things than such adjustments to my own portfolio, that’s why the quarterly review works for me.

4. Do your research

There are everyday thousand of “hot” investments or “bargain” deal on the market. That’s a fact. Yet, as an individual, by the moment you are made aware of it, the real investment opportunity is probably gone, as professional investor already stepped in and pushed the price higher. That is why, regardless of whatever you read in the news or online, you need to spend time and get proper advice before pulling the trigger on an investment. I can not recommend enough that you look for a qualified professional advisor, that could save you a lot of money.

While doing your research, try to always understand “why” the opportunity is there. Also spend time looking at the fee element.

5. Accept the truth

I have lost money on some transactions and I will lose money on future ones. I bought some trackers too late (already went up) and bought expensive ETFs while similar cheaper one were available. When it comes to investments you can’t achieve perfection.  It matters more to start early and to start somewhere, building your knowledge and experience in the process than actually waiting and waiting, reading countless books, looking for the Graal “ever-winning” strategy… All these delaying excuses are in fact the expression of our fear to fail. I had the same fear, despite working on a trading floor, I could not stand the idea of taking risk with my money. I was wrong and today I am grateful to my friends who mentored me through the first steps of setting-up my investment portfolio. Another consideration put me on the track: inflation over the long run erodes the value of your savings. In other words, cash tends to depreciate over the long run, hence the purchasing power you may end up with will be actually less than what it was when you initially saved the money.

If you have read the post until here, you probably know more than most people about starting an investment portfolio aiming at generate recurring income and wealth appreciation. Yet, I strongly recommend you keep building your knowledge on investment, primarily thanks to the books mentioned above but also take a look at this list of books that help me with money management and investments.

Taking action – the most important step

After I published an earlier version of this post, I got the following feedback from a friend “I read your post. I want to invest into ETFs. What shall I do now?” I would encourage you to take those steps:

  1. Find a licensed and registered financial advisors (it can be the wealth management arm of your commercial bank)
  2. Ask your usual commercial bank for their brokerage offer
  3. Compare the offer with a couple of flagship brokers available in your country
  4. If the prices are in the same price range, I would recommend that you start investing using your commercial bank’s offer. That is how I started and I decided to branch out when I increased my investment size and had more experience
  5. Work with the advisor to build a diversify portfolio – you can leverage for instance on the above content from Ray Dalio if that fits your situation
  6. Smart small – see the first trades as an investment in knowledge, as if you were paying for a course
  7. Take your time: research shows that investors prone to frequent rebalancing on average end up losing money. Be patient and set-up a quarterly of even less frequent review
  8. Don’t forget to build a SAFE bucket. No matter how smart you are and how much information you have, all asset classes are subject to significant market downturn.

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Definitions

Transaction costs: the fees investors are charged, on top of the price of the asset, while buying and selling an asset. For instance, the fees that your broker may charge you when you buy a stock, or the rebalancing fee in your portfolio. These transactions are charged based on the number of transactions hence a simple way to limit them is actually to limit the number of orders (buy or sell) to a efficient minimum

Sources

S&P Returns over last 90 years: https://www.cnbc.com/2017/06/18/the-sp-500-has-already-met-its-average-return-for-a-full-year.html

UBS Global Long term investments https://www.ubs.com/global/en/wealth-management/chief-investment-office/key-topics/long-term-investments.html

Bridgewater All Weather fund https://www.bridgewater.com/research-library/the-all-weather-strategy/