Pensioner on one million

Sumlennyj Sergey

The lonely German pensioner, following simple rigid rules, steadily moves to the purpose - to make one million euro at stock exchange

Ingeborga Motz

Ingeborga Motz - almost typical German pensioner. To it 83 years, she lives in tiny small town Gisene, in the small apartment arranged with old-fashioned furniture. In a refrigerator it has a juice from a black currant, and on walls the turned yellow photos of the died or parted relatives hang. An ideal portrait of the average German of its age, if not one "but". Madam Mootts - one of the most successful private exchange speculators of Germany. For eight years the lonely pensioner has managed to earn at a stock exchange of 500 thousand euro and is not going to stop on the reached. Today it is rather popular in Germany, though, of course, not how the legendary investor Warren Баффет in the USA. She has written the book, reads lectures, distributes interview and learns pensioners how to gain money in the share market.

The correspondent of "Expert" has met with iron fray German economy to learn secrets of her success.



Success history

- Madam Mootts with what all has begun how you have come to play to thought a stock exchange?

- Know, it is all destiny from which you will not leave. Seventy five years of the life I lived very poorly. I grew in a poor family where there were many children and very few money. Then I have married and became the housewife. And I again did not have money. That is money in a family was, but my husband simply did not give them to me. I had to elicit at it each mark. If I asked from it five marks on any purchases, he gave to me two and added: «On more do not count». When I tried to go to work, the husband spoke to me: «You the silly woman, you never can earn money». Once I have not born and have told to it: «If you think, that I am not capable to work, I will play a stock exchange!» . It seems to me, he seriously considered this my phrase because when in half a year he has died, I have found out, that shortly before death he has bought one thousand shares of concern VEBA. They cost nearby соpока thousand marks. It also was my starting capital. I have decided, that it simply sign on destiny: I wished to play a stock exchange - and here in my hands one thousand shares has fallen down. I have told to myself: you should make one million of this thousand shares. Any fluctuations at me was not. I simply would not forgive to myself if has not taken advantage of this chance! And a choice special at me was not. Suddenly I became the poor widow. Really poor. My pension was simply tiny - in recalculation for euro of less thousand a month. I simply should find a way to survive!

- And this way has appeared rather successful.

- More than! For 1997 my condition has grown for hundred percent, for 1998 - already on hundred тpидцать percent! And after all it was year of financial crises worldwide. Today, in eight years, at me in a pocket an euro half-million. Three years ago my niece has given me to management the savings, and I have earned to it of hundred thousand on which she has bought the house. It was the first house in Gissen for which it has been paid hundred thousand by cash. When we concluded the bargain, the notary had very puzzled person! In general, I any more the poor widow, I should not live on scanty pension. On daily expenses dividends quite suffice me. I can go on the world and I do not worry any more, that I will have nothing to pay for heating. And I continue to multiply the semimillion condition.

- How you managed to transform for eight years соpок thousand euro into a half-million? Without the vocational education, without game experience at a stock exchange? Moreover and in rather old age?

- Actually all is simple enough. All my condition is made on a unique simple trick. I do not put up money neither in investment funds, nor in bank memory programs. I simply buy shares and I sell them. I have sold shares VEBA inherited from the husband a year later - with absolute profit. On the obtained money has bought shares of banks IKB and Commerzbank. Has waited, while they will grow, and has sold again - on such the eternal housewife like me, whether not so is capable even? I buy shares at a low rate and in a year-one and a half I sell on the high. After that I buy other shares. All is very simple.

Some good advice

- I so have not told. That is, of course, to buy cheaply and to sell expensively - really, sounds simply. But how to find shares which for certain will rise in the price?

- And it too is simple! Look, here my scheme. I from anybody do not hide it. I buy shares on primitive, but to very rigid algorithm. First, I accurately outline a circle of the companies with which it is possible to deal: only what shares form exchange index DAX-30 or, in unusual cases, M-DAX. That is shares of the most capitalised companies of Germany get to a circle of my interests only. I isolate from them that hundred and more years so, for certain will stay and the next years have existed. Besides, I put up money in new branches of these large firms. All new affiliated companies are insured against risks so if there will be any problems, the insurance company will pay expenses. So, my first rule: I buy only shares of the companies with solid history.
Secondly, I buy only shares of banks. Can laugh, but this my personal preference. A whim of the old woman. However, and he easily speaks: banks have the enormous sums on accounts. Their incomes of granting of services in service of accounts grow year from a year. These incomes allow banks not only to pay to the clients tpi-six пpоцентов annual under contributions, but also to pay to shareholders quite good dividends. Banks not so strongly depend on supply and demand fluctuations, and from the moment of introduction of euro as it began where easier to work. Look: in 2001 in Germany have paid миллиаpд eight hundred millions euro on payments by right of succession. What successors with this money which has fallen down them do? Certainly, they spend at once a part. But that they have not spent at once, - carry in banks. Of banks them convince to get the savings account, to participate in the memory program and so on. That is offer all this financial stuff with the guaranteed three-seven annual interest rates. At the best clients convince to give money to investment fund where they can easily disappear. For this reason I buy shares of banks - at them never happens problems to cash inflow, they will cope with any problems.
- Perfectly, with a sphere of action we were defined. What next?

- Is even easier further. I open the newspaper and I look an exchange report. By the way, I do not have the computer, I receive all information only from newspapers. In an exchange report me three figures interest: how many there are shares of the given company today and what was their maximum and a floor price for last year. If present cost of shares is close to a minimum, it means, that at the company serious difficulties. But as this company has century history, it is possible to be assured, that in a year-other it from these difficulties will get out, and shares again will rise in the price. To be convinced, that right after purchases the price will not fall even more low, I check, what falling minimum for last five years was. After that I subtract from a ceiling price of shares minimum - and here at me the approximate forecast of my incomes for the next year.

Certainly, these forecasts never completely come true, but about a situation they give the general representation. After such preliminary analysis I start to look further: and what dividends pay under these shares? If the company pays small dividends, I refuse purchase. For large investors, for hedge funds, for millionaires it, can, and does not play a role, but I - the old lonely woman, I should live on something. Therefore for me dividends are very important. At last, I study structure of shareholders of the company and if I see, that the majority of shares belongs to pair of large shareholders, it too a bad sign. It means, that, most likely, payments under dividends will be very small: large shareholders do not have stimulus to share profit with small investors.

- All the same it sounds too simply.

- Yes it also is simply! Know, I at times perceive myself, as bible David.
I - the old weak woman. And I one struggle with this huge exchange system, with this Goliath. Also I do it by the most simple weapon as David did also. I on the experience was convinced, that exchange Goliath has a weak place - cyclic rate fluctuations of shares of the large companies. On this weakness I have earned five hundred thousand euro, or one million marks. Now my purpose not to earn at all is even more money, I have already earned them enough. My purpose - to tell to all Germans as it is possible to win this Goliath and to provide to itself financial freedom.
Money corrects the world is, unfortunately, the fact. Millions Germans sit at the grown hateful offices from eight to six for the sake of several thousand euro a month, save on everything, than only it is possible. All of them hope, that will sometime grow rich, and the riches lay in one step from them! A problem that Germans are absolutely illiterate in the financial plan. And the large companies, first of all banks, in every possible way support this illiteracy. When the person comes to bank, in the operating company, he hopes, that to it will help to increase its money. Certainly, there to it tell that the best investments are long-term investments. The same nonsense to it is spoken by economists from screens of TVs. Give us your money to management on ten, twenty, thirty years - and we will make you rich!

As though not so! The employee of the operating company - the usual dependent worker. He will offer the client not that really brings money, and that is favourable its company. Certainly, the client will receive any incomes, but these are simply scanty sums in comparison with that it is really possible to earn at a stock exchange. Besides, the client should pay a single payment for opening of an investment portfolio, and after share sale - also surtax. The client can suffer losses in general, and nobody will be responsible for it! I am assured, that maintenance of Germans in this illiterate condition is absolutely realised position of banks and investment funds, and finally and the states.

Certainly, they would not like at all that simple Germans like me became millionaires. On what there will live investment funds? On what there will live lotteries which earn every week millions euro on operation of desire of Germans to grow rich? Just because I wish to change this situation, I and do not hide the methods of game at a stock exchange. I have written the book how I have earned money. I give practical recommendations to all interested persons: I read lectures in female club, I give interview to journalists, I answer letters. To me the weight of letters comes, basically from elderly women who have heard about me by radio or have read in the newspaper and at last have believed in the forces. All of them ask, with what it to begin and what errors should be avoided.

- Also what you answer them? Besides, that now to me have told?

- I give to all beginning players some practical advice. Council the first: the beginning player should understand, what purposes he wishes to reach. That is spoken in textbooks on business: a strategic target, tactical targets and so on. I always recommend to begin with the small: to buy, being guided by my technique, shares on one thousand euro and to lay down to itself the aim through certain time to become the owner of thousand shares of the companies entering into index DAX. So to say, to get the hand. It is the first and most important purpose at the initial stage. Because, as soon as you have one thousand shares of any of these companies, the volume of dividends which you receive, is already enough great, and for needy people it is always important to have though small, but a stable additional source of the income. As all of us are people rather poor, it is important to us to have possibility not to think of the most necessary expenditure and consequently dividends for us are very important. Besides, one thousand is such excellent magic number. The player should feel, that to it carries. And if you in the property suddenly have one thousand shares of the large company with a century name, it gives beliefs in the forces.

The second council which I give: have patience, but be able to jump out of a train in time. Hold shares of not less year, but also no more than two years - for this time of a paper of the large dear company for certain will grow up, but you will not have time to become attached to them, that for certain would lead to financial losses.

The third council: you should not concern money which have enclosed in the share as to a grist for rainy day as to means which you can start up if necessary for the consumer needs. It is postponed so it is postponed. Let's to them grow, help them, direct them, but do not deduce them from growth process. The passion to consumption is one of the main dangers to the exchange player. Yes, you can leave game in a year-other and buy on the earned money the car. It is exact where better, than to take the consumer credit. But what further? Again to consider each euro? And if you have patience and will allow money to grow as early as two-three years, you can become the millionaire in a literal sense - and you any more will not have any financial problems. I always speak to those who asks my council: to spend it is possible only dividends.

Without haste

- To begin with small, to be able to wait and not to take a great interest in consumption - sounds very much in German.

- Unfortunately, already is not present. Modern Germans have lost for a long time these German qualities and have turned to thoughtless consumers which only and do that follow the tastes of advertising, take credits and buy weight of unnecessary things. And certainly, cannot pay off with debts. I do not get tired to repeat: refuse senseless momentary consumption. Lay down to itself the aim - to earn one million. And it is quiet, without haste and without chaotic movements go to it. For this reason my following practical advice a beginner is that: cease to think of the shares in a category of their cost. Think of them only in a category of amount of shares.

If you buy shares and will start to watch quotations will go mad every day. Today any hedge-fund has bought a large share holding, and the price flies up on ten пpоцентов. And in couple of days to receive profit, the fund sells them is also the price again falls. For a hedge fund to make purchase on thirty-forty millions euro - all the same what to buy nutlets. But the small shareholder owning in one thousand-other of shares, never can make money for such fluctuations. He only will get confused, will undermine the health and will lose even that money which at it were. Therefore a unique working variant for us, small shareholders, - to consider the condition as amount of shares and to put to itself the purpose every year to double this amount.

- To tell the truth, it looks a little fondly. What difference, how many at the person on hands of shares if, let us assume, their price falls several times?

- Certainly, in most cases so it also is. You can buy shares of any company even on a floor price, but they never will rise to former high level, and you and remain with what. However I have already explained, that by my technique it is necessary to buy only shares of the large companies checked up by years. And to buy when they have come nearer to the minimum mark for the last years so, ahead at them only growth, it is necessary to wait only. Important in my system because I recommend to buy amount of shares only on what good dividends pay. Look: on the average under the share of large Deutsche Bank like Commerzbank it is paid twenty five-tpidtsat eurocents. Separate banks, for example the same IKB, pay very generous dividends, to eight-ten eurocents, but it is faster an exception. In any case if at you one thousand shares of the same Commerzbank, it means only two hundred fifty-tpista euros of dividends. But if them already two-three thousand dividends make one thousand euro and more - for any German pensioner it is very good increase to pension. And with each new doubling of number of shares this sum increases. Moreover, if the share belong to you of more year, and the total amount of dividends does not exceed two and a half thousand euro, that, under the German legislation, you are released from surtax payment. So dividends allow me to wait easy while the price of shares will reach a maximum, and not to shudder at each news about a short-term rate fluctuation.

- Also what, your technique never gave failures?

- Only once. In 1998 I have bought bank Bankgesellschaft Berlin shares. Then I thought, that, time is included into board of this bank leading politicians, he should be reliable. However all has appeared differently: all this time the bank actually to itself at a loss sponsored the Christian Democrat union. Remember scandal with chancellor Kohl? And so, when scandal has come up outside, shares have fallen even more, and I had to sell them with losses. I have lost on it of ten thousand marks. Since then I never trust politicians and I get shares only those companies in which boards of directors there are no party functionaries. However, this history has not so damaged to my condition. Just then shares Commerzbank have strongly grown, and I have finished year with profit.

- And never was fear to lose money?

- Never. I am simple not зациклена on money. I already spoke: I own not money, and shares. To lose them I am not afraid. Everyone year-one and a half I sell them and I buy new - usually, thanks to a difference of rates, twice larger числоt. As you can see, my scheme never brought me. The main thing - not to give in to a panic at short-term rate fluctuations, not to pursue excessive profit, to refuse a consumer fever and easy to go to the one million. By the way, in one million marks I already could reach the purpose - if have not entered euro. So now at me the new purpose, and I just stand halfway to it. In my opinion, it is a destiny sign: nobody should stop on the reached.

Frankfurt am Main