Money that grows on trees and 5 good financial strategies

(Note: This article contains unsolicited advertising). As a self-employed person, I have several accounts for the company and my private life. 

A while ago, I created an overview of all my accounts and discovered an account that I had forgotten about. Because it was free, I had created it at some point, presumably to save up for something.

Then I forgot.

Now I'm enjoying having a better overview again. Order in finances brings peace. 

Shares as an investment stress me out.

Quite. As a self-employed person, I am not covered by pension insurance. I'm entitled to a pension of just over 200 euros from my previous employment. Together with the pension insurance I've taken out, I won't end up with 500 euros. You don't have to be a pessimist to think that won't be enough later on.

Investing with a guilty conscience and uncertainty

So whenever I could spare some money, I bought shares. I invested in Swabian cutlery manufacturers as well as international computer manufacturers and pharmaceutical companies that produce malaria medication or artificial cartilage.

For me, shares were always associated with a somewhat guilty conscience because I couldn't see through or approve of all company practices. Who can see through everything? And it was stressful. Shares rise and fall - I find that increasingly stressful.

Ecological investment - My money grows on trees

A good 10 years ago, I made a big decision. I am investing in reforestation in Panama, which is being created on former cattle pastures. I understand that. Forests grow when they are well cared for. In the end, the sale of the mature trees brings a good return - about 6% per year. That may not be as fast as turbo shares, but it's pretty safe. And definitely sustainable.

I decided in favour of the young company Forest Finance (then still Futuro Forestal) because they combine responsibility for nature with responsibility for people. They don't plant monocultures, but mixed forests with lots of hedges that are also home to endangered animals. And they invest in their employees through educational programmes.

I then actually travelled to Panama and had a look at my piece of forest - I admit, flying is not ecological. But it was wonderful to sign the purchase deed and the maintenance contract at the notary's office.

It was even nicer to lie on the warm forest floor of my piece of land and look into the crowns of the young trees. Ecological investment - forest in Panama

Since then, I have received a forest report every year. The thin stems have now grown into stately trees. It will take a few more years until my trees are fully grown. But at the same time, new trees are growing, which are also being cared for. I am looking forward to a rich harvest. And wait with patience.

But I wouldn't do it again. Not because I'm not convinced by the concept, but because it takes so long. I'm 54 and it's difficult for me to judge whether I can and want to wait another 25 years for a return. Nevertheless, it suits me better than the shares thing. If you're interested in investing with trees, feel free to contact methen I will put you in touch with a consultant. (For the sake of transparency: I receive a small commission for this, but I would also recommend it without receiving any money because I am convinced of the concept). 

What suits you?

More than ten years ago, I played Cash Flow together with others.

This is an educational game for adults that teaches principles for dealing with finances and investments in a fun way. Not an unimportant topic for me, as I'm self-employed and don't receive a pension - so I want to think about how I can look after myself in a good way: I behaved in the game as I would in real life. What a surprise! But in the game, I was able to recognise more quickly than in real life what is helpful for getting ahead and what is not. That had a clear learning effect. It helped me once again to recognise which principles and behavioural patterns shape me and which of them are helpful in achieving my goals and which are not.

Finding the right financial strategy 

You need a different strategy depending on your goal.

• Gain an overview

List your income and expenses - It's best to look at a whole year and see what you have in terms of regular income and expenditure and what comes in from time to time. 

List your assets such as savings accounts, life insurance policies, shares, etc. Create a well-organised list with account numbers and contact persons. 

Budget: Think about how much you want to use for certain things, e.g. holidays, clothes, future tax payments, retirement provision, etc. If necessary, open a new account for larger items into which regular transfers are made or use savings contracts or ETFs. 

• Reduce debt

Here you can either increase your income - for example through sales or additional jobs - or reduce your expenses. 

If you have debts in different places, reduce the smallest item first - even if you have to pay more interest elsewhere. If it's really tight, start with one euro per week. The success of having reduced a small amount of debt will give you the motivation to keep going. 

• Save for something 

Perhaps you've been dreaming of a major purchase or adventure for a while, or a buffer for unforeseen expenses. It brings a lot of peace of mind to life if you have a buffer account of around 3 - 6 months' expenditure. 

Put money aside for this - for example by standing order whenever your salary arrives. 

• Be well protected in old age

Many people - especially women - are at risk of poverty in old age. A good first step is to analyse your current situation and find out about various options, preferably from independent advisors or friends who know the ropes. And then decide what you want to do now to provide for later.

• Doing good for others now or later

We do not live alone in this world. We can give a lot to other people - also through material support. Here you can set a monthly amount or decide who should receive some of your assets after your death

Now it's your turn

Think about it:

• Where do I want to change something in my finances to bring more calm and structure into my life? 
• What do I want to try? 

I am convinced that with good habits you can achieve almost any goal. I want to create a list of good financial habits.

I want to know:

What good habits help you to get or keep your finances under control? Write it in the comments ...

You can find more tips on this topic in our shop:

A financial advisor, Oliver Mack, has developed a Impulse booklet written.

I can recommend it to you if you want more order in your finances.

This booklet is also included in the Impulse booklet box: Order - together with 9 other impulse booklets to help you get a grip on your life. So when you buy the box you have 10 impulse booklets and save 8.30 euros.

Sometimes you also need miracles in finances. I built a ship with empty pockets and a lot of faith. I describe how I did it in my book. It gives you the courage to tackle an "impossible dream": Cast off. How I built a houseboat in the centre of Berlin to live my dream.

The swing balance concept 

click on the graphic for an enlarged view

The element of life Vision belongs to my Swing-concept: The most beautiful and profound thing I have ever developed for a holistically good life. While the other concepts strongly separate the individual areas of life from each other, the Swing-Concept the basic human needs that are important for a balanced life: 

The special feature of the Swing-Concept is that while it is important for a fulfilled life that all elements are present in life, it doesn't matter where and how you live them out. 

Whether vision and creativity unfold at work or in leisure time is not so important - the main thing is that they find space in life at all.

Online you can do a test herewhich element of life is currently being neglected.