5 useful tips for accumulating capital
Asset accumulation If you want to achieve financial independence, you will need to create and accumulate assets.
And putting this into practice can be much easier than you think.
However, a lot of what you say is completely wrong and will most likely lead you away from that big goal.
Last week I decided to watch Stere's excellent (link) video on his heritage philosophy and want to share the most interesting points in this article.
If you are interested in accumulating capital to live off your income, check out 5 practical tips for achieving this goal.
Tip #1: Work and save
Most people think that the "big secret" to achieving financial independence is learning how to invest and finding the best opportunities in real estate or the stock market.
These people can no longer be wrong.
Few of them got rich through investment alone. The truly rich have built their fortunes through hard work, discipline, and savings.
You will be more successful in accumulating assets if you focus on your job to make more money and have the discipline to save as much as possible on a monthly basis (without compromising your quality of life).
Let us compare the two cases I would like to refer to, Joseph and Mary.
Jose, an experienced investor, has managed to create an investment portfolio that consistently generates 15% per annum.
He spends most of his time looking for investments and saves R$500 per month.
Maria, a disciplined worker, has a more conservative portfolio, earning about 12% annually.
She does professional development most of the time, and has been able to save $1000 per month.
Although Jose has a more profitable portfolio, Maria manages to accumulate more assets because she saves a lot every month.
And if you devote more time to your business, you will definitely get a promotion and be able to invest more in the future.
While it is important to learn how to invest, your primary focus should always be on developing yourself as a trader in order to make more money.
Tip 2: Invest in the long term
Long-term investment practically only benefits you.
You will spend less time analyzing assets, you will pay much less fees and taxes, and you will be able to receive the accrued interest in your favor.
However, you will need to know how to choose good assets to invest in.
There is no point in investing money and “forgetting your money there” if you have not chosen a good financial investment.
Large investors - mainly represented by Warren Buffett - have long lauded the long-term impact of compound interest.
The longer you invest your money, the more interest you will get. When reinvested, this interest earns interest on interest.
Tip #3: Get out of debt
One thing is for sure: No matter how good you are as an investor, your return on your investment is unlikely to exceed the interest rates on your debt.
However, it is pointless to take the best courses and find the best investments if you simply cannot get out of debt.
Especially when we talk about credit card debt and overdrafts, which often exceed 10% per month.
For comparison: investments in government bonds yield about 1% per month.
It is one of the best fixed income investments available in the market.
The only acceptable minimum debt is a mortgage, because it means most people's big dream (buying a home) and it has a low interest rate.
In short, you need to pay off your debts if you want to accumulate wealth in order to live off future income.
Tip #4: Don't sell good assets
If the intention is precisely to accumulate capital, there is no point in selling the good assets that you have already acquired.
Even if the purpose of the sale is to buy new assets or take advantage of new market opportunities, you should be aware of the fees and taxes associated with each transaction.
In the case of financial investments, when you need to sell your assets, you will have to pay income tax, brokerage fees (in the case of assets with variable income) and up to the “zero” calculation period of the IR.
In other words, the new investment will restart the IR term and you will have to spend at least another two years with this asset so that you are not subject to a higher tax rate.
In the case of real estate, the costs associated with it are greater, especially considering fees and taxes for transfer of ownership (ITBI, registration and document).
In addition, there are capital gains tax payments (unless you buy new property within 180 days of the sale).
While most brokerages always have a weekly list of the best stocks, and this list “miraculously” changes every week, you cannot buy and sell assets on a weekly basis.
This will only benefit your broker, not you.
I even recommend watching this great video about the biggest problem brokers have (click here to watch).
Tip #5: Get passive income
If you have read the excellent Rich Dad Poor Dad book, you should know how important it is to make money for you (not the other way around).
In other words, you need to invest your money in assets that generate passive income.
For example, when investing in rental property, the amount received as rent is passive income.
When investing in government bonds that pay semi-annual coupons, this percentage is passive income.
Even when investing in stocks, the amount received as dividends is also passive income.
These three examples show how you can make money for yourself.
Another method is to invest with a focus on capital gains (the difference between the buying and selling price of an asset).
However, this method is very expensive, since you will have to pay all costs associated with the new sale and purchase (as I explained in the previous tip).
conclusion
By following these simple (but powerful) tips, you'll be on the path to creating lasting wealth in your financial life.
By making the money work for you, you will become less dependent on your main source of income and, perhaps, even in the future, you will start living off the income entirely.
To do this, you will need to focus on your job, and have the discipline to save as much as possible each month, pay off debt, and invest with a focus on generating passive income.
If you want to learn more about investing in fixed and variable income, I recommend these classes on Tesouro Direto (click here) and on the stock exchange (click here).
Finally, the most important thing is to understand that most wealthy people get rich not only through investments, but also from income from their work.
And this income, when consistently applied to good investments, allowed these people to live off the future income.
Investing money allows you to increase your wealth, but it will only work if your wealth continues to grow through new contributions.
The next day
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