Organise 3 x 3 finances
The initial situation:
As a self-employed person, I will only receive a rather small pension later on. It probably won't even be enough to rent a broom cupboard.
I've read a lot about finance in the past, and I've also made a few investments, but it was all based on instinct, without a clear system.
I felt insecure with regard to investments, pension provision, etc.
So for my first 3 x 3 I chose the topic of finance elected
3 x 3 is my strategy for acquiring and implementing knowledge from three sources (mostly books) in three weeks. Here I have briefly explained the advantages of the method.
So in three weeks there were three books and a half, plus a magazine and two expert interviews ... so a bit more than 3 things.
- Madame Moneypenny by Natascha Wegelin (great as an audio book!)
- Making Money is Killing your Business by Chuck Blakeman
- The psychology of money by Morgan Housel (also available as an audiobook)
- Smart Women Finish Rich-David Bach (Not finished yet - this is still bedtime reading)
- A financial magazine (not read in full)
- Expert 1: A school friend who used to work for a stock portal and knows a lot about shares
- Expert 2: A financial advisor
1st Madame Moneypenny
Madame Moneypenny is a really good introductory book on the subject of finance. Two aspects were particularly important to me here:
- Overview is important: What is my income (I pay myself a fixed monthly salary) and expenditure? What pension, what investments do I already have? How big is the gap between what I would like to have now or later in old age? How can I close the gap, e.g. by earning more or spending less or investing more money?
- Use "automatic" investments: Nobody can become a stock market expert overnight. And even 90% experts achieve worse results than normal ETFs (These are mixtures of often hundreds of shares that replicate markets, e.g. the global market). You can buy these as a savings plan and invest a certain amount every month, for example.
2. on the psychology of money
On the psychology of money by Morga Housel is a wonderfully clever book about the inner mechanisms involved in financial decisions. Morgan Housel is convinced that financial success depends not only on investment strategies, but is also strongly influenced by our psychological attitude and behaviour.
- Psychological influences on financial decisions: Pitfalls can include: excessive optimism, herd behaviour and the influence of social media.
- Time as a key component: Long-term thinking is important. As time is a decisive factor for financial success. The principles of compound interest and patience play a central role in long-term financial goals.
- Emotions and financial decisionsStrong emotions such as fear, greed and fear of loss can influence our financial decisions. It is important to develop emotional intelligence in order to make smart decisions.
- Diversification and risk management: A broadly diversified investment strategy and effective risk management are important. Diversification helps to minimise financial losses and ensure long-term stability.
Importance of financial education and self-reflection: You need financial education/knowledge and self-awareness for financial success. It's useful to understand your own financial likes and dislikes, such as how much you need to feel secure and continually educate yourself to make informed financial decisions.
3. making money is killing your business
Making Money Is Killing Your Business by Chuck Blakeman is - despite the title - not just a book about money. Rather, it is about the fact that financial success can be achieved not only through the short-term pursuit of profit, but also through a holistic corporate strategy.
- Financial sustainability: Entrepreneurs should not only look at money, but also at whether their company also gives them more time and more opportunity to create meaning. They should organise their business models in such a way that they are successful in all three areas: Money, (free) time and doing meaningful things.
- Set goals: Lifestyle should not be determined by greed, but by the goals you have in life - for example, if you want to promote certain projects, you need the time and financial leeway to do so. A mature company functions to a large extent without the entrepreneur.
It is a good idea to set yourself a target for when you want to reach business maturity. He calls this the business maturity date and distinguishes between different levels of maturity:
- Maturity level 5: The entrepreneur still does some things, but not everything.
- Maturity level 6The entrepreneur is still in management, but no longer in day-to-day business
- Maturity level 7: The entrepreneur is still the owner, but no longer has anything to do with the day-to-day business.
- Ownership and corporate culture: It is important to create a corporate culture in which employees feel like co-entrepreneurs and take responsibility for the long-term success of the company. This can strengthen the financial stability of the company.
- Customer orientation: A strong focus on customer loyalty and delivering added value can bring long-term financial benefits for a company.
3 x 3 What I want to realise
Learning new things and applying theoretical knowledge is nice and exciting, but it was important to me that I improve something in this area in a very practical way.
That's what I've changed for myself:
- Take interest with you: I automatically transfer a certain amount from my current account to a call money account every month. It earns more interest there. I keep filling it until I have enough money in it for 6 months as a buffer for emergencies (cancellation due to illness or unforeseen expenses).
- Invest money: I invest around 10% of my income per month in ETFs to gradually build up a pension.
- Corporate goals defined: I have determined for myself when I want to have reached stable level 5 of entrepreneurial maturity (31 December 2024) and what lifestyle (time and finances) I need to achieve my life's dreams, e.g. Millions of trees for Africa.
At a later date, perhaps in the summer or autumn, I want to delve deeper into the topic of finance. But first, there are another 3 x 3 topics.
At the end of this article, I would like to give you a Extra tip to your heart...
If you want a first introduction to the topic of finance or don't have time to read a whole book, then order the impulse booklet Money.
It gives you good tips and principles for dealing with finances.
A good introduction or refresher.
Your Kerstin Hack
