One day become wealthy and never be poor again
My background
My upbringing was strict – but it shaped me into a person I’m happy to be. One thing that really got to me as a teenager: I had very little money, and that teaches you two things:
- It sucks to have no money
- You don’t learn how to handle money without having any
That’s why my framework is heavily defined by the fact that I barely had money growing up and never want to be in that situation again.
My influences
The books by Morgan Housel, The Bitcoin Standard, The Price of Tomorrow have excited me the most in recent years – and Der Bitcoin Podcast
The Framework
Start investing
Germans love to plan and think things through, including extremely unlikely edge scenarios. This tendency is a massive obstacle when it comes to investing. Very often, the only way to really understand something and develop a feel for it is to actually start using it. So just buy a stock or an ETF and watch it in your portfolio – the intuition develops pretty quickly from there.
Avoid debt
Whenever possible I will actively choose against financing – even against 0% financing. Buying on credit tempts you into getting things you couldn’t or shouldn’t afford. More importantly for me is the psychological effect: from the moment of purchase, my income goes toward things in the future – not paying off something I already own. Buying a house is a different story, of course.
Don’t play the victim
I hear the complaint so often that life isn’t fair. And I sense that many people feel entitled to fairness. It’s a comfortable way to see yourself as helpless in your own situation rather than accepting the truth: life usually isn’t fair. The only way to improve things is to take action and own your decisions.
Buying stuff doesn’t make you happy
I still catch myself sometimes seeing a great tech product and vividly imagining how it would improve my life. The camera that turns me into a hobby photographer or filmmaker. Or high-end speakers I’d actually sit down and listen to. None of that will happen, because you can’t buy a hobby. And you definitely won’t become happier from the purchase – life doesn’t improve. It’s the brief thrill of buying and the buyer’s remorse once the thing actually arrives. And yet I’m convinced that life isn’t just a series of rational decisions, and you should make your dreams come true.
Optimism beats pessimism
This lesson from Morgan Housel was an eye-opener for me: pessimism feels more threatening and convincing, but the world ultimately develops more optimistically than feared. So I’m very deliberate about this when FUD-news around assets I hold starts to trigger anxiety. Because fear is a primitive emotion that rarely serves any purpose.
Endure things
I recently read that what separates successful people from ordinary people is their ability to endure great hardship. I’m ordinary, and I feel volatility in my portfolio quite acutely. But I’ve made a commitment to sit through those moments – and train myself into resilience that way. Because often nothing visibly happens for a long time, or things seem to be going downhill, before suddenly a big step forward happens.
There usually is no “the next …”
People first refuse to grasp disruptive developments and then want to profit financially from “the next …”. I’m convinced there is no “the next Apple/Tesla/Bitcoin”, for example. These companies and technologies are leaders precisely because they overcame the enormous resistance that disruption requires. That’s why the leader remains the horse you should bet on. At least until the mojo eventually fades…
Bitcoin will be the backbone of the financial industry
Bitcoin is a disruptive technology and we’re still very early in the process. I notice all the arguments and resistance, as is often the case with disruptions. But the more I engage with Bitcoin, the stronger my conviction becomes.
Time preference
This concept from “The Bitcoin Standard” was transformative for my mindset. I consciously resist the temptation to fulfill wishes right now and save (invest) my wealth for more things in the future.
Contrarian indicator
I wasn’t sure whether to include this cynical aspect at all. But it’s part of my framework. When I hear a consensus in media and public opinion about the future, I get skeptical. The quantum computer is almost here, the hydrogen republic is about to be declared, or a tech leader is on the decline? These assessments often come from people who simply have no feel for what the future actually brings. I bet on the things I understand and believe in, and I stay away from things others think they understand.