Many people have that desire to live only on the income that investments provide. In other words, having that little money dripping into the account monthly.
But how to get there? I bring here some keys that are essential: work, save and have discipline.
Work is the place where you use your time to carry out some activity. At work, the more you leverage your ability to add value, the greater your chances of achieving success and increasing your income.
Specialization and studies are great allies for the worker and help him to add more and more to his work.
It is also important to emphasize the act of entrepreneurship, either by vocation or by the need for a new source of income.
The money saved is basically the unspent part of the income that will have to be used at a future time. When we save to make an investment, we are precisely “planting a seed in the garden of freedom and financial independence”, which will thus have to be used in a future moment, it will be the “harvest of the fruits”.
However, along the way (and continuing the analogy), the inputs would be as if you were watering your garden.
Savings and contributions are fundamental parts of the process of accumulating wealth for the small investor. The more you can save and invest in good quality assets, the greater the chances that you will have a good reserve accumulated in the future.
It is a mathematical question: a person who invests R$ 20 thousand at a rate of 1% per month after five years, without any extra contribution, will have a final value of R$ 66,007.74. Now, if a person starts investing with BRL 300 per month and continues to invest this amount monthly, over ten years at a rate of 1% per month, he will have a value of BRL 69,011.61.
Notice how small amounts can produce large amounts? Now imagine a contribution of R$ 500 per month. The final amount would be BRL 115,019.34.
Use compound interest and recurrence of applications to your advantage and enjoy the knowledge of Einstein who said: “Compound interest is the most powerful force in the universe”.
3) Have and Stay Focused
Of the three keys I’ve highlighted here, having and staying focused is arguably the most challenging, yet most important. Few people are focused on investing the values they receive from their work on a recurring basis. Investment should be the first budget commitment, not the last.
When you prioritize investment, you are automatically prioritizing your quality of life and stability in the future.
In the long run, the discipline of investing on a recurring basis will be the main key to your freedom, independence and financial success from your future self.
Therefore, at the end of reading this text, look for your bank or broker to start this journey in the world of investments. Start by taking the investor profile test, which analyzes your level of risk tolerance, experience, goals, etc.
Then program your investments according to your current savings capacity, preferably with automatic debit. Over time, increase this value, and you will soon see the power of compound interest allied to your goals and dreams.