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This question was originally asked here by @Marina.

Interestingly @Marina – your question relates to @Ilkka’s question as I now have to put a legal disclaimer:

The below references are only an opinion and are listed for informational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice, as I am not aware of your specific financial situation and am not a licensed investment advisor.


When I started thinking about investments and wealth, I concluded that there are two paths: capital multiplication and wealth creation (not sure if those are actual terms, but that’s what I call them).

Capital multiplication is having capital/money and then figuring out ways on how to make more of it by merely using the existing cash as your starting point. Many people do that through stock market investments, real estate investments, startup investments, P2P lending, etc.

The other is wealth creation. When I started, I did not possess almost any starting capital – so I decided to focus on the latter for the most part.

At the time, my thinking was that even if I can have a starting capital of say 10 000 EUR for capital multiplication approach, and can invest into all sorts of assets to get a pretty good return on investment of 7% yearly, and if I add 10 000 EUR to my investment portfolio every year, then with compound interest and 30 years timeline – I would get about one million EUR in my bank account and a decent yearly income to boot.

Which is great, but I would probably have a lower quality of life while saving all that money, but a much higher one later down the road. Since I prefer to live in the NOW, I decided that this was just not my path to wealth. Besides, one million might sound like a lot, but to me – it is in the same category as 10 000 EUR, so I would instead aim for 100 000 000 right away.

As a result, I want to focus on wealth creation – that is to work on things that have a higher risk, lower cost of entry and a potential “black swan size” reward. That is why I have been starting companies, and getting equity in other companies and not investing/saving as much. That is also why I have been focusing on generating more income from more sources in addition to salary: Consulting, Mentoring, Rental, etc.

In a sense, I am betting that one of my businesses or equity holdings will bring more than one million within 30 years and that I will get to use the money that I make now to have a relatively higher quality of life, while at the same time growing my monthly income.

That said, I still invest into capital multiplication nowadays, as there have been some good results from my “wealth creation” approach, and I can put some small amounts of money away to invest on a monthly basis. For instance, from any card transaction that I do, I move a fraction of the value into my savings account and then invest that monthly.

So if I were to give five ways of how I look at investments, they would be:

1. Go where nobody goes, and do the opposite of what everyone is doing.

Market crashing – buy. Market growing – sell. That might fall into the “basics” category for you, but still – most of us fail to do it, and I have failed to do that many times as well. Still, even when it comes to startups – I like the ones nobody else notices at first. The ones that do not go to startup events for example.

2. Learn the basic concepts of investment.

For that, I would recommend to read about Warren Buffet & Fooled By Randomness.

3. Generate passive income sources.

In addition to my primary income source, I try to find ways to have alternative income sources, and hopefully some of them in the passive category. Even if it is not a lot of money, to begin with – even a 5 EUR monthly passive income is impressive. Especially when compounded. There are a lot of sources of passive income out there. Most of them require your time in the beginning.

4. Invest with your time.

Again, as I chose to focus on wealth creation mostly – I invest with my time, my knowledge, and my network to get both equity and financial returns. Starting a business would also go into this category. When that works out, you can start investing your capital, which I now also do.

5. Find your path to wealth and money.

Everyone is different, and I think it is essential to figure out who your “real you” is and then base your decisions on that. If you save money, would you feel like you are losing out on life or will you be okay with it? If you invest into startups, would you think its too much of a risk? Etc.

Tools that I have used in the past: