Do you want to reduce your financial dependency on only one source of income – for example the net salary generated from your full-time employment in a large company? Would you like to get out of that dependency well ahead of your formal retirement age? In my case that is the age of 66! You may want to look at simple investments that do not require much of your time, or you may consider starting up your own company and make reality of a business idea. You may have the possibility to put aside some money as savings, but you are not really sure what you shall do with your cash savings. ‘What money valorization strategy is right for me?’, you might be asking yourself. Here are some ideas, based on my experiences throughout the last decade. Of course, over time you may go for all three options. That’s actually what I am doing. In a very simplified way, let’s categorize the options to valorize your money into three different areas;

1) investing in real estate,

2) starting your own company, or

3) investing in stocks and value papers.

There is also a fourth option – to set aside money in pension saving schemes, which are available in many different formats (life insurance, pension saving plans, retirement pillars, etc). Pension saving schemes are often arranged through employers and offered to people via investment funds managed by banks or financial institutes, which normally requires very little time and efforts from the individual. It’s regarded as an employment benefit or a part of the standard pension scheme in a country. It’s normally tax advantageous and a ‘no brainer’ to go for, despite often limited annual valorization of the invested capital. That’s why I do not mention more about that here. Needless to say, there are other ways of making money. Not all activities may fall into these three simplified buckets, for example speculation in virtual currencies (like the ‘bitcoin’) and other sorts of modern internet-based trading. There are also many illegal ways to make money, but in that field I am luckily not competent. Follow me and let’s have a look at the different options what you can actually do to valorize your savings:

The first option, investing in real estate, requires several building stones before you can even start with your (first) investment. The major hurdle in this investment strategy is to save up the required money for the down-payment, while the remaining part of the property price would be financed through a bank mortgage. The minimum requirement on down-payment varies from country to country, ranging between 6-20% of the property’s value. The initial phase of this investment option requires time – to search for the right property, get a mortgage in the bank, find tenants, arrange the first rental contract, etc. You may rent out the real estate for a longer period to a tenant (an apartment in the city where you live), or short term like on weekly basis or weekends, while keeping it available to enjoy for yourself some weeks in the year (like in a ski resort or in a popular summer destination). If you intend to go for short-term rentals you will have some work with listing the property on web platforms (like AirBnB, Booking, etc). Check carefully that the property you intend to buy is entitled to be rented out to others than the owner (yourself). Once this business model is up running, there is quite little time resource required for managing the investment over the years. Unless you want to assign and pay a facility management company to enter your property in order to fix things from time to time, this money valorization option normally requires yours presence close to your invested real estate. Buying an apartment or vacation house can be a very good investment, especially if you know the market you have a better chance to make a good deal. This is a suitable money valorization option if you have a stable income/employment and have the possibility get a mortgage in a bank. Let’s say you make 20% down-payment and 80% as mortgage for 10- or 15 years. Obviously, the larger share of down-payment, the less you would pay to your bank each month and the sooner the mortgage could be completely paid off. You will need to calculate the expected rental income versus your costs for paying mortgage, interest, maintenance and repairs. During the years that you pay the mortgage, you may not make that great profit each month, or eventually even run in red figures. When the mortgage period has ended, however, the bank is out of the game and the real estate is all yours. You will have reached “break even” and the rental income is basically pure profit from that point of time, minus cost for maintenance and repairs. Moreover, due to trends like general population growth, urbanization, experience society, etc, most properties increase in value over the years, significantly above the inflation rate. Should you need a large amount of money in the future for something else, or for funding a larger investment, you may always sell the property and make a profit on your purchase price. An option is to buy a parcel and build a house or vacation cottage from scratch. I know several people who do this kind of real estate development on full-time basis – buying and selling real estate, building new houses which they sell, etc. They live on the profit they make and constantly look for new investment objects and business opportunities.

The second option to invest your money and surplus is to start your own business. In today’s internet-based world, you can start many kinds of businesses based on sales of products or services via internet. This option can be extremely rewarding, especially if you run a business where you have your talent, interest, self-fulfillment and passion. Your new business might be your ‘ikigai” or ‘purpose’. Of course, being self-employed means that your time invested will be reflected in the size of the reward and potential profit. It’s not uncommon that success is only reached after many evenings and weekends spent on the business over a substantial period of time. Potentially this ‘money making’ option could be the most profitable of the three, but also risky, especially if it becomes your only source of income. The main challenges are; to come up with the right and competitive business idea, to get the attention of your target group or access to your buyer market (who will pay for your products or services), and to ‘survive’ until you start making money. That’s why many people stay in an employment while starting up their own business. You may test the ground and once it starts to fly, you might be able to say goodbye to working for somebody else and finally become manager of your own time and life. Some people build on the competence earned from their past career, becoming freelancer or consultant within the professional field they have become an expert. Others may have become so good at their favorite hobby that they are now able to start training others and make a living out of it, perhaps boosted by some studies to build competence within the area. Check out if you have not yet discovered this online training provider. Regardless if you build on your past profession or your life’s big passion, you may for example register yourself as a service provider at and other online platforms, and explore your opportunities from there. The market has become truly global – people in Pakistan, Saudi Arabia and the UK have provided their services to me through If you have some good product ideas, you may start listing your products on Amazon, Ebay, or other local online markets. Once you have tested the market for your products or brand in those well-established online market platforms, you may take the next step building further on your portfolio by selling through our own web shop. Imagine reaching customers around the world – or customers in different corners of your country – by selling your products under your own brand in your own web shop! If you outsource the physical handling of your goods, you can run your business from the beach house or mountain cottage, or even when you are out sailing or playing golf. The business runs to a high extent on its own, since storage, packing and shipping would be managed by somebody else than yourself. The Amazon FBA (FBA = Fulfilment By Amazon) business model offers exactly this option to their sellers. Last year, mainly out of curiosity and to explore how things work, I started selling one product on through this FBA model. I do not need to touch the goods that are bought and sold in the ongoing business. In this business model, the only goods I physically touch with my own hands are product samples from potential suppliers. This is the quality control and product development part of the process to select products suitable to sell under my brand. Instead of spending painful time on handling and packaging goods, you will spend your time on product development, design, marketing campaigns, customer communication, and other stimulating business activities. Cost competitive suppliers can be found through the Asia-based trading platform, who may deliver products directly into an outsourced warehouse (an Amazon warehouse if you chose to work with that market channel). Of course, Amazon charges some hefty fees for their services, making it worthwhile to consider packing and shipping on your own or even find the customer markets for your products via other channels. I dropped the Amazon and my brand, and since last year focus my ‘own business’ on life- and career coaching.

The third option is to invest in the stock market, to trade equities in stock listed companies and other value papers. In most developed countries, any private person may get access to the stock exchange through online trading providers. You get direct access to the market and can make transactions by yourself at very low trading fees. Plenty of performance information, facts and figures, as well as news about companies and trends are made available free of charge, all of that supporting your investment decisions. You can start with a small amount of money and build knowledge over time. Ideally you set aside a part of your monthly income, and buy new stocks at regular intervals which is good in terms of risk mitigation. When buying new stocks regularly, like each month or quarter, you may worry less if you buy at the right or wrong time. While the valorization of your invested money in stocks may become a bumpy roller-coaster ride, in the long run the stock exchange indices historically tend to grow by some percentages annually. This valorization strategy requires very low initial money and knowledge, while the risk level compared to the other two options is high. Another advantage is that you do not need to invest that much time; a few hours here and there in your spare time is more than sufficient. Unless you have such a large invested capital that you are able to live from the profit, you may want to dedicate a large part of your time and attention on actively managing your investment portfolio. While you should be prepared to risk loosing some of your invested money, you should have patience, keeping a cool head, and think long term. You may swiftly and comfortably follow the performance of your investments via an app in your tablet or smart phone, and do your trading activities there, anytime and anywhere. In Sweden, we have two major online trading providers – Nordnet and Avanza, with totally more than 1 million users. If you live in Czech Republic you may have a look at FioBanka and their e-Broker system. I have quite recently joined Avanza, and have so far bought stocks in a handful of investment companies listed on the Stockholm Stock Exchange (OMX). I aim at having a decent stock portfolio there in around 10 years from now, with the target to get some additional income from profits and dividends on top of other sources of income during my ‘retirement’. This is what some of my role models have been doing for some time, I and intend to do the same. An alternative to buying stocks directly on the market yourself, is to work through a bank that buys stocks for you upon your requests. If you have a large capital you may assign a portfolio manager in a bank who dedicates a certain part of his/her time to look after your portfolio of stocks and value papers. This normally requires that you would be willing and able to invest a very large amount of money, sometimes 100k euro or more, depending on your country.

Below is a table with the three money valorization options, with a ‘low-medium-high’ evaluation according to different parameters. This is a generic and very simplified model for your guidance – I am aware that you will always find exceptions from it.

Hopefully above ideas have given you some insights. In my own case, I try to valorize my money through all three ways. I don’t think I will really ‘retire’ when I reach the age of either 60 or 66. I’d rather contribute to the world around through my life- and career coaching (own business – money valorization option 2), keep my self stimulated by looking after the investments in stocks and real estate (money valorization option 1 and 3), and spend the rest of my time on other things I like to do, like playing golf and hiking with my wife. It’s just to hope that one will stay healthy and the current Covid-19 lockdown situation will not remain in place forever…

Please share this article with your younger friends or family members. It’s good to be aware of these money-making options early in life. Happy to receive feedback and comments as well.

This article is created as a part of my life- and career coaching initiative, supported by my background as economist.

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