> That's it. There is literally nothing else in this book. There are like 5 stories or so set in a middle-age arabian setting or whatever about people who do exactly this. Invest 10% of their income, favorably in stuff they understand.
Unfortunately, you'd be surprised at the sheer number of people for whom this isn't common sense and need to read this.
I think I must be one of those people. I wouldn't even know where to start to "invest 10% of my income favourably in stuff I understand." What does that mean? Examples?
It means:
1. Consistently be investing some amount of your income (eg: Dollar Cost Averaging is a good strategy). Put some money in an investment vehicle every pay cycle or month.
2. When choosing something to invest in, don't rely on blind luck. Look into index funds and understand how they work (youtube, investopedia etc.) If you don't understand various industries and how they make money, pick a total market index and invest there.
3. If you do have an interest in say, biotech, pets, tech companies, you can independently invest in those.
The critical al thing here is to not just invest because you think something is cool. Do your due diligence and learn how those companies make money and what their outlooks are.
Real Estate is another area of potential investment but you should only do that if the math works out in your favor. Not just the mortgage but factor in repair costs, property taxes, expected appreciation and make sure you're coming out ahead if it is an invest area.
I'm in an European Union country. Personally, I've given up on even trying to invest when I saw all the strings attached.
The bank I use has a service allowing you to put money in their investment funds, configured for different risk profiles.
You need to pay some fees to opt in. There seems to be an already paid yearly(?) fee when you opt in, but you probably need to pay yearly to keep the money in the system. When you decide to cash out, you have to pay income tax.
In conclusion, from my money, the bank needs to be paid, the state needs to be paid, and I doubt their 6% (assuming this is true) yearly return rate is going to net me anything than a loss unless I pump some 6 digit sum right off the bat and leave it there for decades.
I don't really understand your point. Yes, it is more complicated than simply putting money in a bank account and gain a minimum interest rate.
However, it's relatively straight-forward. Not sure about your particular bank, but many banks offer some automatic payments. You simply pay monthly to acquire shares of an ETF. Of course, this costs money, because every transaction on a stock exchange costs money. But generally, this share is yours and the bank keeps it for you. Usually, you can cancel the saving plans and get to keep the shares.
This already is so much easier than private retirement insurances and stuff like that where cancelling a contract comes with hefty fees.
And yes, if you make money on financial assets, you have to pay tax on the returns. This is even the case for the little interest on your bank account. Fortunately, the first 801€ (in Germany) are tax-free and also, the bank handles all of this for you.
I'd argue: If you read about this stuff for 1-2 hours, you know enough about the system and nowadays, it is way easier to do any of this than at any other point in the past.
> and I doubt their 6% (assuming this is true) yearly return rate is going to net me anything than a loss unless I pump some 6 digit sum right off the bat and leave it there for decades.
Well, 6% is the past performance and yes, this doesn't mean that it'll give you the same returns in the future. But generally speaking, it doesn't matter if you put in a 6 digit sum all at once now or acquire shares over the next 20 years.
The only general rule of thumb is: You shouldn't treat this money as a saving account. Don't expect to have access to this money whenever you want, because if you need the money RIGHT NOW, you might be forced to sell your shares at a loss.
Yeah, same. I'm in a position where I could easily put aside 10% of my income for something, but what does it even mean to "invest 10%"?? Like, into what? Where? Through whom?
Invest 10%, what does it mean? Depends. For most people, this would be in stocks. Since most people don't want to have any effort with this, it would be an ETF that reflects a broad market index such as MSCI World or Vanguard.
Through what? A bank with a broker. Some offer you to save money automatically and invest it into an ETF such as Vanguard.
Unfortunately, you'd be surprised at the sheer number of people for whom this isn't common sense and need to read this.