How I Invest My Money: The Minimal Effort Investment Strategy

Investment Strategy

Some of the most frequent questions I get are related to how I invest my money. Actually, it is really simple and below I’ll share my thoughts on how you could invest your own money.

My attitude towards investing

I’ll be honest with you. I am not particularly fond of reading long investor reports or company coverages from investment banks. I don’t want to read newspapers or check up on share prices day in and day out. As long as my investments provide me with a reasonable return, I want to spend as little time on them as possible. I want to set and forget the investments.

What is a reasonable return you might ask? I would like to make more than 5% per year after tax and inflation, which I base my time to retirement calculator on. So far that has worked out, but that does not mean it will continue in the future.

My investment strategy: The Minimal Effort Investment Strategy

I have a very simple investment strategy that is similar to other FIRE (financial independence & early retirement) bloggers’, although it has some distinct differences.

I call it the “Minimal Effort Investment Strategy”. Why? Because I really want to use a bare minimum of time on maintaining my investments – and of course because things sound better with an authoritative name.

I have come up with the Minimal Effort Investment Strategy by reading bits and pieces from personal finance experts, a few books (e.g. The Intelligent Investor by Benjamin Graham) and a few courses from business school on financial markets.

The strategy is based on an investment portfolio with a few key characteristics:

  1. Only invest in index funds (or close to – see #3)
  2. Rebalance every month according to the portfolio’s target share
  3. Have some ‘funny money’ to play around with

Below I’ll try to explain what I mean with these three characteristics. Keep in mind that I am not an expert in investments – actually, I don’t really believe in anything called ‘experts’ when talking about investments, as most of them are just out to get your money. However, consider reading about the topic of investing before starting yourself (I suggest starting with Benjamin Graham’s book above if you have some business knowledge already).

1. My investment portfolio: Index funds

I (nearly) only invest in index funds. Index funds is a collection of stocks or bonds that have been created to match or track the components of a market index (e.g. MSCI, S&P 500 etc.).

Buying a share in an index fund means that you get to own even smaller shares in a lot of different companies – essentially, you spread your risk across more companies than if you only invested in a single company. This means that if a company that is part of the index fund goes bankrupt, you only lose small share of your invested money – and hopefully the growth in the rest of the companies in the market index will make up for the one that went bankrupt.

Investing in index funds is nothing new. Nearly everyone who is trying to become financially independent and retire early invest in index funds in one way or another. In fact, index funds are not unique to personal finance – everybody can invest in them, and everybody does.

My portfolio is made up of four index funds. I invest in Danish passive index funds, because the Danish tax system is horrible when it comes to investing in index funds abroad (something that will hopefully soon change).

The Danish index funds still track global and American stocks – it is only the management fees that are higher than e.g. Vanguard in the US (0.5% yearly in Danish funds vs. 0.1% yearly in some Vanguard funds). If you are located in the US, make sure to check out the best roth IRA or traditional IRA for you if you want to invest some of your retirement savings.

I have the following four index funds in Denmark:

  1. Sparinvest INDEX Glb Akt Min Risiko KL: This index fund tracks the MSCI World Minimum Volatility Index, which means that the share prices of the companies in the index have relatively low volatility. The index fund is a combination of global stocks across regions
  2. Sparinvest INDEX USA Growth KL: This index fund tracks the MSCI US Growth Index, which is a mix of 374 large and mid cap growth stocks including companies such as Apple, Amazon, Facebook, Alphabet etc.)
  3. Sparinvest INDEX USA Value KL: This index fund tracks a wider range of 624 companies that are considered to be less volatile than the growth stocks. The index includes companies such as Apple, Microsoft, Facebook, Johnson & Johnson, Exxon Mobil, JPMorgan Chase & Co and Wells Fargo as the largest constituents
  4. Sparinvest INDEX Stabile Obligationer KLThis index fund tracks Danish government bonds and is used to slightly reduce the overall risk of my portfolio, but currently the return only just about covers inflation

My reason for choosing Sparinvest is solely based on the relatively low management fees. If you are investing in passive index funds (which you should), this is the only things – more or less – that is important to look for. The yearly costs are 0.5-0.6% for the three stock indexes and 0.3% for the bond index.

I know that many will find my portfolio highly risky – and it is. I have a lot of money in relatively risky stocks with high volatility, but since my time horizon is quite long (>10 years), I am willing to take on more risk (and volatility) to earn an even greater return (hopefully!).

2. My investment portfolio: Target share

After defining which index funds you should have in your portfolio, I would recommend setting up the target shares for each of the assets you have in your portfolio.

I have decided to have 30% on my global index, 20% on the USA growth index, 20% on the USA value index, 10% in the bond index and 20% on ‘funny money’, which I will get back to shortly.

Every month, this target share defines how I will invest my money. At the time of writing, my portfolio looks like this:

AssetTarget shareActual shareDeviation
Index: Global30%16%-14%
Index: USA Growth20%33%13%
Index: USA Value20%20%0%
Index: Bonds10%0%-10%
'Funny money'20%31%11%

When I have transferred all the money that I will to spend on my living expenses in the coming month, I invest the surplus of whatever is left.

Depending on how much you per for each transaction, you have two options for how to invest your money at the beginning of each month.

If you pay a fee for each transaction you make, I would recommend that you invest in only one of your assets per month – namely the asset where the deviation from the target share is biggest (i.e. this month I would invest in my global index, since that is where the deviation is largest with -14%). This is how I rebalance my portfolio, because I have to pay a relatively high fee for each transaction. However, if you do not pay for transactions (or only pay very little), I would advice you to invest in all of your assets to rebalance your portfolio to the target shares.

The second option is the one that diversifies your risk the most and ensures that you invest in both good and bad times across your indexes, but it is a bad financial decision if you end up paying a lot of fees.

This way of investing smaller amounts over time and rebalancing the portfolio is similar to the strategy of dollar cost averaging which is a subject that many people have written and researched about. I can recommend searching for it online if you are interested in the theory behind.

It is important not to fall for the temptation of increasing the target share in well-performing index funds, but to stick strictly to target share that you have set up. As John Templeton has said “To buy when others are despondently selling and to sell when others are avidly buying requires the greatest fortitude and pays the greatest reward“.

Looking at my portfolio, I might be too exposed to the US, so in the future I’ll consider whether this is the optimal mix (for example, I might add a few more European or emerging markets indexes to the mix).

For diversification across more asset classes, I like the idea of the “Gone Fishin’ Portfolio” (I believe the portfolio split can be found here), but for me it is a bit too complicated and costly in terms of transactions fees.

3. My investment portfolio: ‘Funny money’

Now, the final part of my portfolio is based on something I call ‘funny money’ – I don’t believe in playing around with money, so that is not how it should be interpreted, but I do believe that it can be a good idea to place money in something completely different from traditional stocks and bonds. For now, I have placed my ‘funny money’ (20% of my portfolio) in peer-to-peer lending. I have written a long article about how and why here. So far, it has been a great experience and I am making a nice return on it.

Apart from this, I also have a pension and housing equity, but I do not consider these a part of my portfolio as I have little control over them and cannot rebalance them every month.

Historical performance of my investment portfolio

I have not been actively investing for long enough to show how my portfolio have developed (and you can also see this in my monthly updates), but I can show you how it would have developed over the previous five years:

AssetTarget share of total portfolio5-year return (annualized) before tax and inflation after fees5-year return (annualized) after tax, inflation and feesStandard deviation
Index: Global30%13.4%5.7%10.5%
Index: USA Growth20%16.9%7.5%13.3%
Index: USA Value20%15.2%6.6%12.3%
Index: Bonds10%1.0%-0.5%0.9%
Peer-to-peer lending20%10.7%4.4%0%
Total (weighted)100%12.7%5.3%8.4%

My portfolio would have yielded a weighted average return on investment of 5.3% after taxes, inflation and return. Now, I know that it has been a few quite good years and that I might not be able to expect a net return on more than 5% in the future, but nobody knows, so I might also get an even greater return.

How do you start following the Minimal Effort Investment Strategy?

You can start investing with the Minimal Effort Investment strategy today by going through the following steps:

  1. Set up an investment account at a bank: I use a Danish bank that has the lowest transaction fees and a good user interface
  2. Decide on your investment profile: Find out what your time horizon is (when do you need the money again), how much you want to invest and what risk you want to carry. Are you ready to have a portfolio with high volatility and potentially lose a lot of money to have a higher potential upside? A general rule of thumb is to have lower risk if you need the money in the next couple of years and have more risk if you have a long time horizon
  3. Decide on your portfolio: Based on your investment profile, find out which portfolio you want to have. In the Minimal Effort Investment Strategy, you need to find out which index funds you want to invest in and where you want to place your ‘funny money’ – I have some suggestions above, but you can find a lot of people online (most of them much wiser than me) that recommend different index fund portfolios
  4. Invest according to your target share: Find out what the target share should be for each of your index funds and ‘funny money’ and make your first investments. I recommend setting up a Google spreadsheet where you can track the share and difference (see the first table above) by entering the current value of each index fund each month and comparing it with the target share
  5. Rebalance your portfolio: Each month, quarter or year (depending on what you feel like – I recommend monthly), make sure to rebalance your portfolio by selling/buying index funds to ensure that you stick religiously to your target shares

That’s how I invest my money – now get out there and try it for yourself. Find out what makes you sleep well at night while using minimum effort to keep the investments running!

A word of caution

First of all, I am not an investment expert, so always seek professional help before investing (even though it might be costly!), although I do have a business education, read books on the subject and practical experience with investments.

Secondly, THERE’S A CRISIS COMING!!! ARGH!!! From time to time, you will hear that there’s a crisis coming – and there is. I am 100% sure that we have not seen the last crisis of our lifetime. We are going to have market crashes – big and small. We are going to have booms and forget that things could ever crash – until they do again.

At the timing of writing, the P/E (price/earnings) ratio is historically high, which gives us an indication of an overvalued market. I expect that a crisis (or market correction as it is also called) will come soon. However, nobody knows whether it is tomorrow or in a few years from now – and it might happen slowly and be very undramatic. In fact, Mr. Money Moustache just wrote a great piece on what he believes is an upcoming crisis.

The best thing about the Minimal Effort Investment Strategy and long-term investments is that you do not care what happens to the market. You will have very few sleepless nights if you keep believing in the strategy. You will lose money and you will gain money (hopefully) – things will go up and down. You will invest in times where companies are under-valued and in times where they are over-valued – therefore, you do not care what it is right now as it should even out over time.

The important thing is that you stick to the strategy and continue to invest – also when everyone around you are screaming “SELL!!!” and panicking. For me, the best time to invest is during a crisis as you can get really good deals on under-valued companies. If you only invest in good times, then you will lose in the long run.

As the market goes up and down, you will make more money that you invest and gain dividends that you will re-invest to grow your net worth – and you will do it without worrying about how the markets are doing.

When you are no longer investing for the long term, you could start worrying a bit more about crises and might consider shifting your portfolio towards less risky investments (e.g. from stocks to bonds).

On a final note, I am actively considering adding other assets to my portfolio. For example, REITs (real estate investment trusts), European/emerging markets index funds, precious metals funds and inflation protected securities.

I am very open to suggestions on how I should structure my portfolio, so feel free to let me know in the comments if you have any suggestions 🙂




Omar January 14, 2019 - 00:05

Hi Carl.
I would like to know your opinion about something:

What do you think about leveraged ETF funds?
What about a 2X Leveraged S&P 500 ETF for instance?

Thanks for your time.

Carl Jensen January 14, 2019 - 11:07

Hi Omar,

I believe leveraged EFT funds are speculative products with high risk that might give you a good return in the short-term (but it might also do the opposite). They are usually much more expensive than normal index funds, so I would never use them for long-term investing.

All the best,

Omar January 15, 2019 - 01:15

I was thinking more or less the same… Thanks Carl !

Marcel November 11, 2018 - 13:03

Hi Carl,

Firstly, thank you SOOOO much for writing this blog in English! You would not believe how much time I’ve spent looking for some good FIRE blog for DK-based investors!

Now my questions:

1. You say that you invest though Nordnet, Danske Invest and Sparinvest – do I need to have the account with each of these organizations or can I get the funds through e.g. Nordnet only?

2. I am a bit confused by this article about dividends: Can you please explain how this is applicable to your case?

3. If I invest e.g. 150.000kr and potentially make something on dividends, how does that affect my taxes? If I understand it correctly, I am actually at loss for that particular year.

4. Do these companies inform SKAT about all this themselves, or do I have to do it for them?

5. When you balance your portfolio, you do it based on the current valuation, right?

Thank you very much for your answers.a

Carl November 12, 2018 - 04:54

Thanks, Marcel! I’m happy to hear you like it 🙂

Good questions!

1) No, you can invest in all of them on Nordnet (or at least many of them). They are all part of Nordnet’s “Investeringsforeninger”:

2) I am actually going to write a post on this soon, but I have just changed my strategy to have more accumulating funds, since dividends are taxed. In short, the pros of dividend funds are that you get money each year to sustain a cash flow without having to sell shares and dividends usually stay higher even in bad times when stocks decline. The main con of dividend funds is that you have to pay tax on the dividends which makes the money you re-invest smaller than if it just accumulated.

3) You will have to pay tax on your dividends, but if you decide to sell your stocks they might be sold at a loss compared to what you bought them for (dividends decrease the value of a stock) and you will get a tax deduction from that.

4) Nordnet informs SKAT of dividend taxes that are paid upon payout automatically in Nordnet (not sure about realization of gains/losses – haven’t tried that yet).

5) Yes, I balance my portfolio based on current valuation.

These are at least my best current answers, but keep in mind that I might have misunderstood some things 🙂


PY July 9, 2018 - 21:13

Hi Carl! I’m pouring through your blog and just set up a Nordnet account. I saw that you put a really good table on the 5 year annualised return before and after tax. How did you calculate that? I would like to know so then I can start building my portfolio. I’m not sure if I’m really clear how taxation works on index funds in Denmark. Unlike where I come from where taxes are low (or almost non-existent), I really hope you can guide me on calculating post-tax gains. Thanks again, and love reading all that you write!

Also, I’m a fan of Benjamin Graham’s book!

Carl July 10, 2018 - 21:48

Hi PY,

I have actually calculated the most conservative estimate assuming that I would be selling all of my stocks in a given year, but in reality, I am probably not going to do that. I also assumed an inflation rate of 2%.

In Denmark, you pay 27% tax on the first 52,900 DKK investment gains (dividends and return), and 42% on the rest. I have assumed 42% on everything, which is not realistic.

In reality, if I only realized gains below 52,900 DKK in a given year, the 13.4% return before taxes and inflation would be 7.8% after 2% inflation and 27% tax.

Hope that helps – and thanks for reading! 🙂

Omar April 10, 2018 - 01:07

Dear Carl.
First of all: Congrats man! Your blog is really good, reading your articles I can see that you know what you’re talking about. I really like your simple but very clear approach, etc…
Now my question: I was reading a bit about the Index Funds and I have found a lot of good things about the S&P 500, even Warren Buffet advises to buy that 🙂 He also (as you) talks very well about Vaguard, “so voila” after looing for it, I found the S&P500 Vanguard index fund (IE00B3XXRP09). With one of the best Brokers I found (degiro), each transaction costs only about 2€. If I want to invest about 200€/month, the transaction cost is 1% which seems to me quite high.

Is this 1% acceptable or should I just go with a much higher transaction to make it worth?
Thanks !!

Carl April 10, 2018 - 20:10

Hi Omar,

Thanks for the kind words.

I would say that it depends. If I understand you correctly, the question is whether you should invest once monthly/quarterly/yearly. I like to invest monthly as the probability that I both invest on highs and lows is bigger (you can read more about dollar cost averaging – remember to also read criticism of it). If you have a flat fee of 2€ regardless of the investment, I would just invest the 200€ monthly. Yes, you might be 1% behind on the investment return in a given year, but instead of having that money saved up during the year and earn nothing in return, I would just get them out there and work for you 🙂 Luckily, most years the return is above 1%, and it would be a good choice.

Mohmmad Mulla March 12, 2018 - 08:48

Good blog Carl. I should look at index funds too, just got to find a decent broker in the UK.

Personally i’m quite into property where I’ve had returns of 10%.

Some good tips here my man! Thankyou

Carl @ MoneyMow March 12, 2018 - 22:24

Interesting, Mohammad! 🙂 I have actually started to look at real estate as well, but I simply can’t find out which model is the best.

Mohammed Mulla March 13, 2018 - 09:41

I’m no worldwide expert. All I do know is the UK market especially locally. I’m confident that properties where I am can be rented pretty easily as there are many people either moving out or foreign workers who are looking to earn in pounds.

I kept my house basic and have had to pay for a few repairs but over the current mini retirement the income has been reliable.

What is the market like in Denmark?

Carl @ MoneyMow March 18, 2018 - 21:43

Very interesting! I also believe that the rental market is fairly good for people renting out in Denmark – except in Copenhagen where houses are expensive and rental prices are capped by the state. I am considering buying properties outside of Copenhagen where you can actually make a decent return.

Mohammed Mulla March 20, 2018 - 03:03

Good idea man. I’ve found the income to be pretty reliable so far and i’ll be looking to invest in more properties in the future.

Is there a demand outside of Copenhagen?

Carl @ MoneyMow March 25, 2018 - 22:13

Yes, there’s definitely some demand, so it is possible. Lately, I’ve also been looking into a few real estate investment companies where you buy a share of different projects. That might work too.

Mohammed Mulla April 19, 2018 - 11:46

That does sound like an interesting proposition. In affect you would play the lender here?
Would the income be from rents and profits from sales?

Carl April 19, 2018 - 22:26

If we are talking about peer-to-peer lending, I am the lender, and I get the income from interest paid by the people getting the loans. This means that I both get interest and the principal paid back over time 🙂

Mads February 27, 2018 - 10:17

Hej, jeg spørger på dansk, men svar endelig på engelsk hvis det er.

Hvorfor er det du skriver din portfølje er af høj risiko? Du har jo valgt den sikre spredning med indeksfonde.

Carl @ MoneyMow February 27, 2018 - 23:27

Hi Mads,

I’ll answer in English – hope that is ok! I write that my portfolio is high risk even though it is invested in stock indexes with great diversification. This is because stocks in general are considered a high risk investment. Normally, all investment professionals would advice you to have some part of your investments in safer assets such as fixed-income. Allocating 100% to stocks is definitely considered a high-rish allocation.

Let me know if you have any additional questions 🙂

Hanne October 22, 2017 - 08:07

Tak for et godt indlæg, som gør mig nysgerrig på en ting.
Jeg spørger lige på dansk, håber det er ok.
Hvorfor køber du ikke bare enkeltaktier og dermed slipper for de omkostninger på 0,5-0,6 % hvert evig eneste år? Se fx her:

Carl @ MoneyMow October 22, 2017 - 10:34

Thanks for a great question, Hanne! I hope it is ok that I answer in English:

There’s three reasons why I invest in passive index funds and not individual stocks.

1) I get a lot more diversification than I would be able to myself. My investments are spread passively across thousands of companies, thus minimizing risk and volatility of my investments. The report you link to has some great insights, but they are only focused on Danish stocks. For me, that is not enough diversification. I want to be exposed to the global markets rather than just Denmark (The US, emerging markets, Europe etc.). For some people, however, buying 15-20 stocks in different industries in Denmark (e.g. C20) could be an appropriately diversified portfolio.

2) It is cheaper than having to buy individual stocks and constantly re-balancing the portfolio to have a fair share in each of the companies (this is done automatically in my passive index funds), but of course 0.5% is still more expensive than a “set and forget” individual stock purchase.

3) I don’t have to spend time on deciding which 15-20 companies to invest in, nor do I have to follow their development more closely than with a passive index fund. I don’t believe I am smart enough to make that decision, nor do I have the time or want to spend energy on worrying about these 15-20 companies.

I am not saying that index funds should always be preferred, because as you say, it does come at a cost 🙂

Hope this makes sense.

All the best,

Marius October 4, 2017 - 10:19


Great overview!

I just wanted to ask what bank do you use for investment?
If you use Nordnet, do you use Månedsopsparing?


Carl @ MoneyMow October 4, 2017 - 22:20

Hey Marius,

Thanks for reaching out! 🙂

Yes, I use Nordnet as my choice of investment. I don’t use any particular product with them, so I just set up an investment account, transferred money and invested in Sparinvest and Danske Invest. I try to keep my investments as simple as possible with the lowest amount of administration fees.

Let me know if there’s anything else!


Marius October 5, 2017 - 05:58


Great 🙂
I might be wrong, but as I understand Månedsopsparing gives you no “brokerage fee” and should save some money 🙂 however as I can see using this product you can buy only Sparinvest INDEX Glb Akt Min Risiko KL (from those you have).

Thanks again!


Carl @ MoneyMow October 7, 2017 - 11:36

Hi Marius,

That is correct as I understand it, but as you say, I am not sure you have the full selection of index funds. I’ll investigate it further one of these days because it sounds like a good deal!


Marius October 7, 2017 - 11:40

Please share your thoughts afterwards 🙂

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