Sjoerd’s Wealth Formula

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Hi!

My name is Sjoerd, a Dutch guy living 18 years in Ireland with my Irish wife and 3 kids. I work at a big American software company and also started a coaching business called, ‘Become a Millionaire Limited’.

So, why should you care?

I aim to take the mystery out of money so you can ‘Become a Millionaire’.

But I had to come a long way myself.

For the first 14 years of my career in sales, I had been a mindless spender. I didn’t grow up around anyone wealthy. Nobody ever showed me that money had any purpose other than to spend it.

So that’s what I did. I bought stuff I didn’t need, to impress people I didn’t know.

In early 2020 I knew something had to change. It didn’t feel right that I was a sales leader making good money and was still living paycheck to paycheck.

I tried several books that made investing sound complex and time consuming. But, I finally found the book that changed everything. 

In JL Collins’ ‘The Simple Path to Wealth’ I learned that investing isn't complex. And it's not something only wealthy people do.

It can be simple. I can even do it to get wealthy. 

I put my own plan into place and it worked. 

It started me on a journey to discover everything I can about the ‘Financial Independence’ movement.

Many colleagues wanted to hear what I was doing. So, I started doing ‘Become a Millionaire’ presentations at work and sharing my tips on how to ‘Become a Millionaire’ on LinkedIn. I’ve even started a course to become a Qualified Financial Advisor.

So how does this benefit you?

I wanted to make building wealth as easy as possible to understand. 

For this purpose, I created a system modestly called ‘Sjoerd’s Wealth Formula’.

The idea is simple. There are 4 pillars to the system. If you have a plan for all 4, you will ‘Become a Millionaire’. If you miss one, you probably won’t.

Here they are:

1. Increase your earnings;

2. Control your spending;

3. Let your money work; and

4. Give it time.

Let’s take a look at each of them.

1. Increase your earnings

This is what most people think of when they wonder how to ‘Become a Millionaire’. You have to earn a million. But it is the least effective of the four. Only when the other 3 are set up properly, can you supercharge your wealth by increasing your earnings. If you earn a million and you spend a million, you are still broke.

2. Control your spending

My LinkedIn audience was a lot more interested in the first pillar than in the second. Controlling your spending is less sexy than earning more. But if you save 10% of your income, you can take a year off for every 9 years that you worked. If you save 50% of your income, you can take a year off for every year that you’ve worked.

3. Let your money work

This is where the magic starts to happen. Every euro, dollar, or pound that you save is like a little employee. When you invest, they can work for you while you sleep.

 These employees will never complain, never be tired and will never be late.

4. Give it time

Time is the main ingredient for the magic of compound interest.

Let’s say you invest € 1,000 per month into an index fund that grows 7% annually. If you do that for 20 years, you will have €490,000. If you do that for 50 years you will €4,900,000 (10x).

So what can you do today? 

1. Start tracking your earnings, savings, investments and net worth

2. Research how your pension is invested and if you are maxing out your Additional Voluntary Contributions

3. Optimise your spending (Spend extravagantly on what you love. Cut costs mercilessly on the things you don’t)

4. Pay yourself first (Automate your investments at the start of the month)

A question from the PitchedIt founders

Rob: Sjoerd, have you invested in private markets and, if not, what’s preventing you?

Sjoerd: Not yet! Truthfully, I don’t know enough about it. I'm always looking for new and effective ways to invest but I haven't found a platform that matches my expectations yet. I can understand that the upside is bigger when you invest in private businesses but I like the simplicity and effectiveness of investing through index funds. If PitchedIt can make investing in private markets equally easy, I will definitely try it out.

The Unsophisticated Investor is brought to you by Scott & Rob, the founders of PitchedIt. We were both sick of private markets being a playground exclusive to the ultra-wealthy. So… we started a company to challenge the status-quo. PitchedIt’s singular focus is to unlock private markets for Millennial and Gen Z retail investors and help them build wealth through the highest performing private market opportunities.

Scott & Rob
PitchedIt Co-Founders