One more hello everyone!
Here we are discussing another subject, and this time I want to talk about how best to invest your money: in savings, mutual funds or stocks?
Before you think that this is yet another “boring economist talking about how to get rich, when even he isn’t”, I’ll just say that you are partially correct: I’m not an economist, but I assume I’m boring 🙂 ; I’m not going to talk about how to get rich, but about how to get, who knows, “a little extra money with what you already have”, and finally, you’re right: I’m not rich. If it was, maybe I’d be on a private beach enjoying life right now – I’m just another geek who likes to talk and argue about different subjects. 🙂
In fact, these are not the only ways to save/invest: those who want to know more in-depth will come across terms such as fixed and variable income, retirement plans (I hope to address these in another opportunity), venture capital, etc.
For now, we want to simplify as much as possible, because the more complex the information and possibilities are, the more time it will take to study and understand what we want (you don’t want to shove the money that you saved for months/years into anything and pray that okay, will you?).
Well, of the three options that we will discuss here, the one that presents the most security (and therefore the least concern) is savings. When you put your money in a savings account, you know that:
- It will yield (a little, but it will) and its value will be corrected monthly;
- There will be no income tax on it (less headache for you 🙂 );
- Each bank agency dictates how you should proceed (care, etc.), it is interesting that your money stays there for at least three months without withdrawal movement, in order not to pay an extra fee for that movement. In addition, some movement is required (inflow or outflow of money) within a maximum period of 90 days, under the risk of having the savings deactivated (and then you will have to pay a fee for reactivation);
I’ve kept savings account for some time now (in case I have an emergency, because you never know what tomorrow will bring, especially when you’re a freelancer O_o ), and over time I’ve noticed some things, which I now want to share with you. as advice:
- If you are still a student and you are just an intern, for sure of all the options presented here, savings are the best for you. Try to save and keep some capital in savings – you may need it for an important conference, the purchase of new books, or any other type of need. Try to put at least USD 50.00 / 20% in your savings monthly;
- If you don’t already own any of the three and are parachuting into this one right now, saving is also the best option for you;
- Get into the habit of regularly putting money in the passbook, checking how much there is in it, and estimating how much you will have in a given period, so you can better know when you will have enough money for something you want;
- Avoid withdrawing money from her in the first three or four months, in order to avoid the fees that exist in that period when there is movement;
- Don’t expect high returns – savings, as mentioned, is a means that always pays, but the income is low.
The first possibility (and it is the one we are going to discuss now) is investment funds – each bank branch has its own funds, and there are several specific institutions for this.
An investment fund uses its capital to invest in companies (similar to savings, but here the risks are a little higher). The monthly income is a little higher, but it varies more than that of savings (in the last few times I checked, the average income of an investment fund was higher than that of bank savings) and is subject to income tax.
According to the institution, there are several types of investment funds: some in which you invest a certain amount and can only withdraw your money after a minimum period, others in which you invest an initial amount and each month you must invest a new minimum amount. (this is the one practiced by Banco do Brasil funds).
For experimentation purposes, hope you have enough capital (with a good portion already in savings) and then go into an investment fund. Thus, you will be able to check, in practice, if the investment fund will be performing as well as the savings and will be able to decide how best to proceed (keep still part in savings, transfer more or less amount to the investment fund, etc.).
Before entering the first investment fund, it is interesting that:
- Analyze various types of investment funds – know the fees you will have to pay (whether monthly or per transaction, for example), the rates of return that that fund has achieved, etc;
- Make sure you get enough money to keep at least the period indicated by the investment fund (because you can lose money if you need to get out of it sooner because you need the money).
Once the choice has been made and after a few months of working on your fund (no malice 🙂 ) and taking into account the same rules I described for savings (ie, keep an eye on how much is coming in and out of your investment fund, etc.), you can already consider yourself a good investor! Congratulations!
After this one, you may be capitalized enough to say: I want to earn more with my money and I have a good margin of tolerance for undercapitalization. You are ready for action!
Stocks are securities that guarantee you a certain percentage of the earnings of a company (or even the company). As it is strongly linked to a company, the value of a particular stock will go up or down according to various factors that surround the company, such as the number of products offered, its time on the market, its current reputation, crises it has faced, etc.
Realize then that you can buy shares of a company and, over time, they go up a lot; however, they can also lose value, and you would then be losing money.
Many companies practice the division of dividends (profits that the company had) with the shareholders of the same, thus allowing you to have some other way to make a profit with the company, besides buying and selling shares. In addition, when new shares are issued, current shareholders have a preference in purchasing them.
I still don’t work with stocks (for now 😀 ), so there aren’t many tips “from my own experience” that I can give, but from what I study and analyze around, some main ones are:
- Look for stocks that are compatible with your profile, that is, if you cannot take many risks, it is preferable to stocks that yield little but have low risk, to stocks with high risks and potential for profitability;
- Diversify your investments: don’t invest only in stocks, as well as don’t have shares of a single type, in this way, if you have an undercapitalized share, the other operations can cover the deficit;
- It is preferable to keep the capital as long as possible, aiming at a profit in the medium/long term. In a research carried out by Você S/A, it was found that if a person invested USD 10,000.00 in certain shares in 1960 and kept the capital there until today (38 years old), he would have more than USD 316,000.00, however, if this person had invested the same USD 10,000.00 in certain shares, but had withdrawn and replaced his capital only six times during this period (probably, in the face of a decapitalization), the total obtained would have been just over USD 15,000.00, that is, he would only get 50% of income in those 38 years. Quite different from the previous one, no?
- Know that there are always risks – if it were 100% safe, everyone would be a shareholder, right?
Well, that’s all. I hope what I’ve said here has helped someone better understand how they can achieve greater security in their investments.
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