🚀 Where should I invest my money?

The question I've been asked 100 times...

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The question I've gotten by far the most so far:

"Kristóf, what should I invest my money in?"

And, as always, I can't give you a specific answer, as I'm not a financial advisor, but I can tell you what I have invested in. 😉

And I can outline all the investments I have ever come across! 😎

So, you can get a clear picture by the end of this article of what your ideal investments might be! 💰

But before we jump into the world of finance, let's see...

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🆘 Last chance for the Offline Event

This Sunday we have our biggest offline meeting ever! 200 like-minded young people in one place.

If you've been procrastinating, now's your last chance! 🤯

There are 9 tickets left for this meeting, where you can expect performances like this:

• 🧠 How to prevent burnout - Fuller with BioKauna

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But if that wasn't enough...

• There will be an organized matchmaking game where you can meet 12 new people in 60 minutes 🤝

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🗓️ Date: 10 December (Sunday) 13:00-20:00
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Grab one of the 9 tickets and let's finally meet in person! 👋🏼

Okay, now we can start...

💭 Why is it worth investing?

Have you ever noticed that money is always compared to water? 💧

That's why your account gets frozen, your money runs dry, money flows in, etc.

This was once explained to me simply as:

"Money can multiply when it flows."

If you don't invest your money, inflation eats it up. 📉

Inflation means: a general rise in prices.

So that's why people who are just hoarding cannot achieve a high level of wealth.

Because their only source of income comes from their own work - or it could be a business, but you work in it - and that's what they usually put aside, that's what they 'hoard'. 😨

But by the time they save up a large sum to buy a house, a car or whatever, that item has cost more, because inflation has increased the price. 🫤

The simplest way I can illustrate it is with this picture.

The same coffee 50 years ago was only $0.25, now it's $1.85, nearly 8 times as much. All in 50 years. That's why inflation is called the "silent killer", because that few percent a year doesn't mean much, but when you add up the "compound interest", you get some rough numbers. 😱

💡 Side note: Even I remember that a scoop of ice cream used to be 120 ft, now it's 600, so prices have gone up 5x in roughly 20 years. If you just saved your money, it would literally be worth 5 times as much now as it was 20 years ago.

Now, wait a minute... ✋🏼

What is compound interest?

It's also called the 8th wonder of the world. 🤩

Meaning: effective yield. When compound interest is applied, interest is not paid at the end of the interest period, but is added to the principal and this results in additional interest in the following period, so the interest earned also accrues.

Thanks, we didn't learn anything from this!

I will try to explain it in a simpler way. 😎

Meaning simply: If I deposit 1,000 forints in the bank and it bears interest at 10%, then at the end of the first year, I will have 1,100 forints. Yes, but the following year my 1,100 forints will already earn 10% interest, so I will have 1,210 forints. So, the interest I have already received will also accrue, hence the name compound interest.

💡 Side note: The sooner you start investing, the better off you'll be with compound interest. After all, the more years it will take to compound.

This is all well and good, but many financial advisors stop there. 🤨

They just tell you to invest the more you invest and the better you will live in old age. Which is 100% true! ✅

But...

I don't want to live a life of pleasure at 70, I want to live it now. ❌

So, the most difficult task is to find the balance between building the future and living the present. I have agonised over this the most in recent years.😒

Until one of my friends sobered me up with his advice:

"Kristóf, let's be honest, you're probably not going to go without in your lifetime, so it doesn't matter if you have 1 billion or 2 billion."

That was the moment when I admitted he was right and since then I have managed my investments differently. 🙏🏻

In the previous article I explained step-by-step how I allocate my money. If you haven't read it yet, you can do so here:

So, every month I allocate my money and what I have left I split in half.

💰 50% goes to investments - building my future
🏝️ 50% goes to Wish Farm - living the present (mostly travel)

That's how I found the balance, the magic number might be different for you, but the point is to NOT give up the present moments completely in exchange for a brighter future. ❌

Before we go any further...

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🧐 What can you invest in?

⚠️ Disclaimer: The information contained herein is in no way investment advice. This advice is not intended as a recommendation.

OK, now that we've got that legal bit out of the way, let's get down to the hard theory.

There are 1000+1 types of investments. Here I will only list the ones I have dealt with or at least learned about from credible sources. 😉

I don't consider myself an experienced investor, I may not use the right terminology or I may not have the right insight into the investment. I'm just sharing my experience and hope it helps some young people. 🙏🏻

If you like any of them, please check them out. If you don't agree with one, feel free to question it. The point is to start thinking about the issue and develop your own perspective. 👁️

Before we even dive into this list, I think the most important thing is to determine what type of investments fit your lifestyle.

For example, I travel a lot and don't like to be tied down, so I don't invest in real estate. I think real estate is a very good investment, but not for my lifestyle. ❌

💡 Side note: By the way, real estate has "made" the most dollar millionaires in the world, but internet businesses can make you a dollar millionaire the fastest.

So, you can evaluate the investments below based on time, energy and space dependence. ⏳

You're much more likely to find the investments that are really right for you.

1. Bonds 🏦

This is a form of quasi "loan" to a company or even a state.

Yes, this includes Government Bonds. 🇭🇺

But the bond market is far from equal to government bonds, it is much more than that.

It may be safer than a stock, but there are still real risks. For example, if the government or the company you are lending to goes bankrupt, or if the terms change along the way, for example with a government bond. 🫤

In this category, I have a Government Bond, which is one of my safer investments.

The Government Bond investment was probably the easiest for me. I went to the Treasury and had my account open in 10 minutes. Free and with no fees.😉

💡 Side note: You should also ask for "mobile treasury" access, so you can manage your investments on your phone. It's infinitely easier, better structured than 1-2 mobile banks. You can easily compare interest rates and maturity dates.

Let's scoot on to the next one. 🛵

2. Shares 📈

I think you already know this one, but I'll explain briefly.

A share is when you buy a share in a company.

There are two types:

• 💸 Dividend paying shares - you buy them mostly to get dividends

• 📈 Growth shares - you buy them mostly to make them worth more

Dividend paying shares can be said to be the closest to passive income. In Hungary, the "magician" of this topic is Dávid Sólyomi, who also wrote the book "Free from dividends".

📕 Book review: If you're interested in this topic, you should definitely read Dávid Sólyomi's book "Free from Dividends", you can find a summary of it in the BookBase. 🎧

One thing to highlight here, I have never had a dividend paying share and I don't know the tax implications of this, how it works. I've heard horror stories and heaven forbid stories about it, so it's worth looking into this beforehand.🔍

Growth stocks went big in my investment portfolio early in my career. Back then I was so ignorant of what they were and speculated.

And of course, I listened to my friends - My famous NIO investment which is still -67%, thanks Adam -. 📉

I have never analyzed, I have always bought based on hunches and news, which I do not advise ANYONE to do. That's how I was lucky enough to make a big profit on Tesla, for example, or a big loss on NIO.

If you know the basic rules of value investing, you can earn big returns on it, otherwise it's just a hustle. If you don't understand it and invest like I used to do, it's like playing a tip mixer. 🍀

📕 Book recommendations: "The Intelligent Investor" by Benjamin Graham is a basic work in this category. It's up in the App. Warren Buffet and Charlie Munger were two of the best-known value-based investors of our time. Charlie Munger just passed away recently at the age of 99. Rest in peace! 🎧

If I had to recommend a Hungarian site on this topic, these would be it:

• @kezdobefekteto

• @pib.befektetesek

These guys are really good, I know both of them personally.

You can buy shares at KBC Equitas (K&H Bank), Revolut (many people don't like this, I hold few shares on it, especially from a long time ago), Trading 212 and I could go on. 🏦

This is how you can transfer money to KBC Ű(HUN):

• Forint

• Foreign currency

Here you should pay attention to the account management fee, if any, and the transaction costs. Plus, bank insurance, as most banks insure account holders up to €100,000. So, if the bank goes bankrupt or whatever, you will get back up to €100,000. 🔒

If you have a lot more money than that, it might be worth opening an account with several banks and spreading your investments around to get as much insurance as possible. 🙏🏻

3. ETFs 🧺

Also known as equity baskets.

A much safer way to invest, this is the one I prefer. 😉

Think of it as, you don't buy 1 company's shares, but a little bit of each. 🤏🏼

Of course, it depends on what basket of stocks you buy, you can buy from the Top 500 US companies, you can buy from the world economy, European companies, etc. 🧺

The point is, you're looking at returns and losses here. If one company is loss making but the others are profitable, you'll probably be profitable.

One of the most well-known ones that I keep some of my money in is the S&P500.

The Standard and Poor's 500, or the S&P 500 for short, is a basket of stocks that tracks the weighted average of the stock prices of 500 large companies listed on the US stock exchange.

So, investing in it is like buying a small slice of all 500 companies. So, you save yourself the research and analysis and just put your money in that because it's diversified by default. 🍰

Diversification means you invest in more things and therefore reduce your risk.

Over the last 30 years the average return of the S&P500 has been 10.7% per year. Which is a perfectly fair investment, given that you do almost nothing with it. 👍🏼

⚙️ Pro tip: It's a good idea to open a Social Security Account (Permanent Investment Account), because you can easily reduce the tax on the investment.

What is a LTIA account?

A long-term investment account (LTIA) is a state-subsidized preferential scheme whereby the money deposited and invested in the account for a period of 3 to 5 years is partially or fully exempt from interest, capital gains and dividend tax.

So, it's a pretty good deal if you know what you're doing. Adam told me the same thing back in the day. 🤝

Let's see how exactly you can buy S&P500, because there are 1,000 varieties. The BizniszBoyzos guys and @kezdobefekteto have broken this down perfectly into steps. So, I quote (HUN):

1. You open a LTIA account with KBC. You can go to K&H bank and get it done there. 2-3 days and you'll have an account.

2. Then you can deposit your money and buy S&P500 on a HUF basis (type this into the search engine: SXR8 (BSE) iShares Core S&P 500 UCITS ETF USD)

3. If you want euro, which is what I was advised to do back then, you can either convert forint to euro on Revolut or Wise and transfer it to your KBC account in the bank. (note that this is a different procedure than the forint transfer)

4. Then you type iShares Core S&P 500 UCITS ETF (Acc) ETF into the search engine (this is an ETF that does not pay dividends but reinvests the return straight back, saving us some tax)

Okay, that was a serious section, but let's move on...

4. Crypto 🌐

You've 100% heard of this one. This includes Bitcoin, Ethereum, altcoins and about 10,000 others.

Bitcoin is also known as digital gold. 💎

In short, the current financial system is ripe for a change and cryptocurrencies and blockchain will help with that.

Cryptos can also be traded or held. I'm more of a buy & hold investor because I don't have the time or enough knowledge to trade. ⌛️

If I were to explain one by one what each crypto does, we would be here until morning.

So, it's easiest if I recommend a few books from the BookBase, so if you're interested you can easily dig in. 📚

📕 Book recommendations: "Digital Gold" by Nathaniel Popper and "Bitcoin Standard" by Saifedean Ammous, could be perfect reads to get you more into the topic. You can listen to them in summary in BookBase.

Among the Hungarian "celebrities", Balázs Sebestyén is the big pioneer of the crypto movement. 👍🏼

💡 Side note: I consider him the most authentic "celebrity" in Hungary, not only because of this, but in general. He's the one I look up to for his values, even though I listen to a negligible amount of radio.

If you're interested in Cryptos, you're in luck, because I can recommend some Hungarian content producers:

• MakeItCount

• Laszika

• Csaba Kormos

Let's see what cryptos I have. 👀

A long time ago, I made the mistake of "over-diversifying" myself and I had about 20-30 types of coins. The problem with them was that I couldn't manage them at all, I couldn't react to what was happening and they just started to get out of hand.

So, in the last bull market I sold all of them and rolled them into Bitcoin and Ethereum, the two I keep this part of my investments in. 🐂

If you don't want to take a huge risk, I recommend Bitcoin. 🙏🏻

If you like to gamble, then look into altcoins and try your luck in that segment. But be careful, I've seen more than one person lose all their money on them. 🎰

You can also find more brokers here. I am with Binance, for me they are the most trustworthy. I had a bad experience with Coinbase a long time ago so I let them go completely.

You can sign up for Binance here if you want.

This will save you 20% on your purchase costs!

And below is a video from my friend MakeItCount on how you can buy Crypto for the cheapest:

5. Currencies 💶

Short-term foreign exchange trading is commonly known as forex.

Here we are talking about longer-term "investing". I put it in quotes because I don't consider it fully investing, more like storage.

Which may work for safety reasons, but don't expect 1000% returns from it. ❌

I think it's a smart decision if you have some money:

• USD - In Dollars

• CHF - Swiss Franc

• JPY - In Japanese Yen

If any disaster should happen, you can certainly manage with this. I'm not talking about huge fortunes, just a little spending money that you can access immediately. 💸

I think Revolut is perfect for this, you can store your foreign currency easily and simply. It's also worth ordering a physical card to go with it, for sure. 🔒

Or there is now an Invitation Reward:

1. If you register at this link: Invitation link

2. Deposit 3.750 HUF into your account

3. Order a physical card (Maybe 2.000 forints)

4. And you spend that 3,750 on 3x purchases of at least 1,250 forints (you can also use the digital card; you don't have to wait for the physical card)

Then I get 12.500 HUF commission, of which I transfer 8.000 HUF to you. You can easily check this back on Revolut's system. 🎁

So, if you do it right, you've spent 3.750 HUF on anything, you've got a physical card for free and you'll get 2.250 HUF as a gift from me for all this. 🙏🏻

December 12 is the deadline for this. So, you can start your "Revolutos career" for free.

6. Property 🏡

Next up is a category I've never invested in before, but I'm surrounded by a lot of successful people who have made their fortunes in real estate.

As far as I know, there are 4 parts to real estate investing:

• Short-term rental

• Long-term rental

• Short-term lease Long-term lease Renovation and resale

• Build and sell

The uncrowned king of short-term letting is Peter Jones, who manages 166 apartments in Budapest. It's easiest to link to my interview with him. 😉

So you can hear the lessons from his mouth:

And Márton Mlinarik is the best expert in long-term rental and renovation. ✅

I also did an interview with him; I'll link it here:

I know I left out the construction part, but unfortunately, I have no experience in that and it's better to admit that than to give you the benefit of the doubt on something I have no idea about. 🤷🏽‍♂️

7. Gold ⛏️

It is crude to write this, but gold does not produce any value directly or indirectly. It has value because you and you say it does and therefore, I believe it does.

Just like Bitcoin. Only few people realize that! 👀

Gold gives a sense of security, mostly our parents and grandparents grew up in this system that the only security is gold. 🔒

Because, if a country's economy collapses, gold is the only thing that provides value.

In the end, yes, I more or less agree with it, I understand the logic behind it, but somehow for me gold investing is not attractive. ❌

I'd rather hold it in Bitcoin or some kind of bond.

If you want to play it safe, keep part of your portfolio in gold and then you don't have to think about it. 🤏🏼

And then we move on to the more interesting stuff...

8. Things to collect 🕰️

I've never had an investment like this because I don't think it's liquid enough. So I can get rid of it slowly or with difficulty, as I need a buyer. 😪

Liquid means: easily and quickly converted into cash.

People I know have collected these and seen serious returns on them:

• Watches

• Cartier jewelry

• Lego

• Comic books

Some collectibles, you can easily imagine a 10-30x close return. But they are few and far between and I think it's hard to find a buyer. Plus, let's not forget that these need to be stored somewhere. 🧐

9. Scaling 🚀

I would also include investing the money back into my own company so that it has a better position in the market or makes more money immediately.

This could be an upgrade at BookBase or a large-scale marketing campaign.📈

Here I am gambling on taking out less dividends, leaving the money in the company so that the company will produce more next year and I can take out more dividends. 🙏🏻

In short, that's what investing in my own company means to me.

💡 Side note: It's important to note that many people use this for everything, if they buy a table or a chair for the company, I ask why? And they say, I just invested in the company. Well, it's more or less true, but a lot of times it's just an escape from not knowing what to do with your money and blaming it on investing it in your company. How do I know? I was like that! For me now, the only company investments I make are those that contribute to making more money, preferably directly, but at worst indirectly. A desk and a chair won't help me do that!

For example, there will now be a new mascot for the BookBase, made by a foreign designer. It wasn't a small amount, but I don't consider it an "investment", as it can contribute quite indirectly to increased revenue. It will certainly help, it's just hard to measure the impact.

What am I investing in? 🤔

My investment portfolio has evolved steadily over the years. Now I feel I have finally found something I can commit to for the long term. 🔒

However, it is important to remember that this is tailored to my lifestyle and may not be the best choice for you.

As discussed above, I will spend half of the money I have left on Wish Farm on travel and invest the other half. 💰

This section is about how I'm going to split the money I have left to invest.

Because it's important for me to have freedom and liquidity, so that I have easy access to my money at any time. So, I invest more or less in things that meet these criteria. 😉

However, it is also important for me not to have to deal with it on a daily basis, just to buy and let the compound interest do its job.

However, it would be silly to keep my money in only 1 type of thing. 🤪

Warren Buffet has this saying:

"Never put all your eggs in one basket."

So, I split my investments into 3 parts:

• 🏦 33% in Treasury bonds right now

• 🌐 33% in Crypto (Bitcoin, Ethereum)

• 🧺 34% in S&P500

This is the portfolio that gives me the freedom I need and still helps me build my future.

However, it is hard to always keep in mind when and how much to invest.

⚙️ Pro tip: It's best if you can somehow automate this process, for example by transferring some of your money to a separate account at the beginning of each month. That way, that money will definitely be set aside!

Finally, let's see... 👀

✅ What exactly do you do?

[ ] First step, look at what lifestyle do you want? 👁️

[ ] Step two, what kind of investments fit with that? 🤔

[ ] Step three, pick 2-3 and try to diversify your investments. 🔍

[ ] Step four, then look at the first steps you can take in MA to get started on your investment journey (this could be opening an account or reading a summary) 📕

[ ] Step five, take the first step. 👣

💡 Side note: The sooner you start, the better off you'll be with compound interest. It is a nonsense that little money is not worth investing, any "excess" money is worth putting into something! Because you know, if it stands, it doesn't multiply.

Quite a comprehensive post. It may have been a knee jerk in places, but it's more to get you to see your options and start thinking about them. 💭

Because from there, your inner motivation will take you! 🙏🏻

🔥 Biggest obstacle

It's been so long since we've had such a big update on the App that I forgot how excited I used to get before it. But I don't think I'm alone. 😓

I got the Beta for my phone on Monday, it's crazy fast! Sometimes loading the covers is still a bit difficult, but Edu is improving that. ⚡️

I've been pushing through the whole App one by one. Honestly, I went through almost every possible way.

This is when I put on my "nitpicking" glasses and screen record, circle and write anything that doesn't work as it should. Usually it's just the little things, like a back arrow taking you back to a different place or the covers loading a bit slower. 🤓

It went back to Kokesz, they fixed them and the update for the stone arrived on my phone. I'm still testing this now, but, if it gets the green light, it will get Beta testers and from there it will be live on AppStore and Play Store within 1 week. 🤞🏼

It's like when you make a rocket and you have to check everything before launching it, so it doesn't explode or sink. 💥

👷🏼‍♂️ Fix It Friday

The guys fixed these in the new App:

✅ Infinite back arrow on the Read-Listen page
✅ If there's no book in search, you can submit a suggestion
✅ Fixed the exact length of books
✅ If you download a book, you can see it is loading
✅ Fixed bad book recommendations in Onboarding

📖 What have I read now?

• I almost finished reading "Scientific Advertising" by Claude Hopkins. It's gross to see that the marketing basics haven't changed in 100 years, because this book is exactly 100 years old and 80% of it still holds up. 📔

• I read 1 chapter of "$100 million Leads" by Hormozi. I was specifically interested in advertising so I could be more effective. He got me right on the money. 📘

  • I've been taking 3 ads a week so far, he suggested I take 10 plus 30 starts, you know the first 5 seconds of the video. And, if I put them all together, I will have 300 ads (because 10x30). Quickly 100x my ideas. Now I have 22 ads for now, I just don't know how to test them yet. Because 300 ads at 1.000 forints per day is 300.000/day. 🤯

📕 Book recommendations: You can find both in the BookBase, marketing category for outstanding reads!

🎧 What have I just listened to?

• Unfortunately, I didn't have time to listen this week. I read instead. Next week I might come back with a longer listening list.

✍🏼 Top quote

"I think Warren and I know the limits of our competence better than others, which is why we are successful." ~ Charlie Munger

💡 Explanation of quote: they knew what they didn't know and admitted it. So, they never invested in things they didn't know how to do. That's the secret of their success.

🧪 Question of the week