Money. Is it working for you?

by Dobromir Risov December 2025

Effortless Success: is it that simple?

Intro: Is money working for you?

Is it that simple to let money work for you? I will be reviewing this statement today. I sometimes get the impression personal investors are “sold” that profits on the stock exchange are created somehow automatically or by magic. Personal Finance offers additional guidance. As if, you merely need to join. If this advice is blindly followed by individual investors, chances are they be burnt in the markets. When I started investing I had read a book and had an idea that I applied.

The starting point for today´s blog is this statement from an ad I saw about a month ago. I write in the main part about what is missing for the personal investor. Then I write about two false friends I see beginner investors face. Identifying those allows you to bypass them and save yourself some money. When you don´t lose money, you apply the first rule to succesful investing according to Warren Buffett:

Rule No 1: Never lose money.

Rule No 2: Never forget rule No 1.

Agreed this is a very strict formulation, what is important is the idea.

Main

"Money. Is it working for you?" What is left out and needs mentioning

I read the statement about a month ago. It was an ad from an internet broker. I was thinking, well it sounds good. Unfortunately something is missing. The stages before however are left out. Yet they are crucial for successful investing. Those are: 1) Succeed in setting money aside to invest, 50€ for starters. 2) Learn to invest well (i.e. increase your chances of success)  3) over see your investments and 4) finally money starts working for you. Steps 2 and 3 you either know them or need to learn them. If you are here you probably need to learn them. You can do that on this site. Now let´s go to two topics I refer to as false friends.

Reap the benefits without doing the work first?

False Friend #1:

Along the way, personal investors will be offered some type of structured products:

"These are (...) prepackaged investments that typically combine assets (...) with one or more derivatives."

In plain English often these are leveraged investment products. Leverage means the product contains in some way debt. They allow potentially higher payoffs but also more risks. Those potentially higher returns are where people lure themselves in, hoping to make a lot of money with little money quickly. Structured products are taught in academia at a later stage. After the basics and traditional instruments were taught and understood. And so structured products are beyond the understanding of the beginner investor. Or as, Buffett puts it:

Risk comes from not knowing what you're doing.

There are enough opportunities to do well as a personal investor without premature exposure to those instruments. You can go to the Courses (List) or inform yourself more at Personal Investing. Some might object: But it´s only a small amount, I can afford to lose it. Yes, and while this is the case, it becomes more like sports betting and breaks rule #1. A beginner investor will have enough work to do with equities, bonds or real estate instruments.

False Friend #2:

Beginner investors hear from friends, family or by ads to start investing in the companies they know. Sounds good. Can´t be too bad, right? Actually it can. Here are my thoughts: knowing a company is not a criteria for a good investment. Instead, watch out first for investment criteria and then see if the company you know meets those criteria. I prefer to choose an investment in a company “I don´t know” (I haven´t heard of before), which matches a good investment than in a company I have heard of and then turns out to be a poor investment.

Some reading & reflecting is necessary to succeed in investing. .

Ask yourself, when you look out for an electrician, you look for a decent electrician, not for someone you know who happens to be an electrician. It´s the same with companies.

I know it is tempting, because I have found, the easiest step in investing is to press the button “buy”. This is also the step where brokers make money. Brokers prefer when you make a lot of trades - buying and selling frequently. Because they make money. However, when you look at the most successful investor – Warren Buffett, he prefers to trade rarely. A personal investor´s work is prior to pushing the “buy” button. And this is the stage that takes time. Time resources are a key criteria when deciding upon an investment approach. Hence selecting single stocks often proves too time consuming for personal investors. I have also heard, stock markets are like a casino. It is unpredictable, but it´s not a casino either. If anything beginner investors start assuming there is nothing that can be done. Gladly something can be done, investors are not helpless participants. They can steer the wheel themselves into their preferred direction taking into account their time resources. When you want to do that you can read more about it in the course section Courses (List).

Summary

I wrote about the statement I read at an ad from internet broker “Money. Is it working for you?”. This state is difficult to be achieved without taking a couple of steps before. I laid out those steps, most importantly learning about investing and applying knowledge. I further mentioned two false friends uninformed investors are facing at the start of their endeavour: leveraged products: I think investment success requires understanding and hence time. Success can´t be fast tracked even if you wish so. Another false friend is “invest in the company you know”: this is an easy and fast solution when you don´t know what to do. Yet, that company does not qualify for a good investment unless appraised in more detail.

Conclusion

Is money working you? Yes, if you are a seasoned, knowledgeable investor. No, if you are a beginner, a lay investor. Beginners must first learn the trade to become seasoned. What I am saying is practice makes you good at investing. In a nut shell – first you work for the money you have saved. Then the money works for you. So, to answer the second question from the start of the blog: Is it that simple? No. It´s not. However, the good thing is, it´s also not that difficult when you learn the trade. You can do that here Courses (List)

Sources

Quotes (Oxford Reference): https://www.oxfordreference.com/display/10.1093/acref/9780191866692.001.0001/q-oro-ed6-00012078

Structured Products (Investopedia):

https://www.investopedia.com/articles/optioninvestor/07/structured_products.asp

Frequently Asked Questions (FAQs):

1. Is it a good idea to buy structured financial instruments (derivatives) when you are a beginner investor? Avoid doing that. Buying them is easy, understanding them takes detailed knowledge. Derivatives are based on traditional instruments, like equity. It is important for individual investors to learn the trade, starting with traditional instruments. That will take enough of your scarce time.

2. Is buying stocks of companies I know or I like buying products from a good idea when I start investing? Be prudent. When you do that in investing you start upside down. Start with selecting investment criteria first and see which companies meet them. But it is tempting as it is a quick solution to a challenging part in investing.

3. Are financial markets a casino? No, they aren´t. Financial markets are unpredictable and they may be unreasonable for a long time. Yet, financial markets are not a casino. Approaching them like a casino, takes a personal investor away from the investment character to the gaming character. This is very likely not going to be successful.

4. What is the most difficult part in investing? There are several. What the most difficult is varies from person to person. One difficult part is reflecting upon and deciding on the investment criteria / approach. Also difficult is to give it time, so show patience. Like a farmer who has to wait until autumn to see results. To some it is difficult to stay away from the folly that can take over people and markets.