I will talk a little about this road of investing to achieve financial freedom and the evolution that I followed it.
There were four full years of monthly contributions, many books studied, many websites and blogs visited, many videos watched and a lot of initial concern about the project, if it was going to work, if I could get there, if it really was possible, if it was not a far dream among so many doubts.
At first, we get very anxious and make many accounts to achieve the goal. The truth is that all these accounts are useless. The real result comes with time, with the change in your life habits, with your frugal life and without excesses and with your adaptation to your own plan, this is the main thing, money becomes a secondary issue and things like monthly profitability , annual results, equity are even in the background, I put these things here only for a theoretical end of study for you readers, but not that I worry much these days.
The great truth is that there is no point where your tranquility will arise. Every day worked, every day lived with less, every month that I make a contribution I become calmer. I must remind you that the main reason for anyone to invest is simply not to impoverish.
Wealth is not something natural, it is an invention of capitalism, before that nobody needed to accumulate wealth, poverty is natural of the human being, most of the humanity is born very poor and always was so, it is up to us to prepare ourselves to leave of poverty and this is what I try to spend a bit here.
Let’s go to my 2016 expenses that I calculated for this post:
Condo: 350 x 12 = R$ 4200 (U$1272 annual) or (U$ 106 per month) (includes water)
Electricity: R$ 2958 (U$896 annual) or R$ 246 (U$74 per month).
Health plan: 455 x 12 = R$ 5460 (U$1654 annual) or (U$138 per month) (coletive ward)
Cleaner: 1200 x 12 = R$ 14,400.00 (U$4363 annual) (U$363 per month) (includes wash clothing and cook meals at home and to go to work)
Mobile phone + internet at home + Netflix: 248 x 12 = R$ 2976 (U$ 901 annual) or (U$75 per month)
Car: 600 x 12 (gasoline) + R$ 2800 (insurance) + R$ 1300 taxes = R$ 11300 (U$3424 annual)
Telephone at home: 26 * 12 = R$ 312 (U$ 94.54) (annual)
Family (donation): R$ 1400 (monthly) * 12 = R$ 16,800.00 (U$5090 annual) (U$ 424 per month)
Donation: 125 × 12 = R$ 1500 (U$455) (annual)
Supermarket / Grocery = 1000 x 12 = R$ 12,000.00 (U$3636 annual) (U$ 303 per month)
Financial expenses = 82.5 x 12 (990) + 40 x 12 (480) + 600 = R$ 1,630 (U$493 annual) (U$ 41 per month)
Credit card bill = 3000 x 12 = R$ 36,000.00 (U$10,900 annual) (U$ 908 per month)
Other annuities and taxes = 711+500+500+1000+600+600 = R$ 3911 (U$1185 annual) (U$ 98.7) per month)
Total = U$ 34,377 annual or U$ 2864 monthly
(Remembering I have no mortgage on my real state or loans at my car )
U$ 34,377 —– 4% (TSR)
U$ X —– 100%
X = 100 * 34,377 / 4
= U$ 859.425 ( total capital needed for my Financial Freedom )
My current assets = U$ 333,333
My assets = 38.78% (almost 40% of the way to Financial Freedom)
Assuming that I have reached 40% of the way in just 4 years, this gives a simple average of 10% per year, ie 10 years to reach the balance of financial expenses and revenues, at this rate.
Putting in the paper I see that nowadays this my expense is very high (did I raise my standard of living a lot?). I do not feel like it, but there’s nothing wrong with it either, I consider myself a very low average guy in things.
I know that almost (U$ 2864) a month is a lot, but you have to see the allocation of expenses and that almost 20% of my expenses are a donation and that I live in a very expensive city, more expensive than São Paulo included (a capital in the north of Brazil).
If I lived in my hometown in the northeast, I would have spent about 60 percent of it.
I could increase my contribution if I simply stopped helping my family or if I quit the cleaner, but there are two things that I can not give up anymore and more than 70% of my wage I put in my investments. Is not necessary too much squeezing so as not to sabotage the plan.
The credit card bill comes a little more expensive sometimes due to the many trips inside Brazil always to work, study or to meet my family and also leisure, but I always do all this without any excess, economy flight class, hostel or cheap hotels or friends house to host, including city bus ride when I’m traveling or uber.
Another thing that is logical is that in the case of marriage and children this expense is going to increase a lot, so in 5-7 years it can certainly be four and a half thousand dollars a month (U$ 4545) in today’s figures quietly, but if the wife works and maybe even slow down and I do not want to stop working after reaching the calculated value, I just want to slow down a bit.
I can say that I feel much calmer than 3 years ago, mainly because I have a good reserve and knowing that I will hardly be poor again (this is what most comforts me).
Well, friends, what really matters is the process, the peace of your mind, your commitment and your hard and tireless work, and getting along with life with all of this. Nowadays I am completely adapted to my work rate (+ 100h per week).
Do not just focus on numbers, focus on getting along with life and your choices, and expect the best. In doubt read books, watch documentaries, occupy your mind with productive things and learn more and more.
Invest in your profession too, the more reading and studying the less stress you get. I am undergoing an international certification that is very laborious, improving my English, passing on auditing courses to be able to improve and help my company and also intend to draw others in the financial market, including I was called to compose a Council and run for an election in a Private Company to be on the board of directors or the board of trustees or the prosecutor (I am only 31 years old, in meetings where the others have an average of 55 years or more).
The point is that when you study it yourself, make projects and suggestions, and stand out the staff feel you have knowledge and master the subject, decorate laws, regulations, and agreements, invitations and other opportunities come naturally, including in government ( something that I do not intend to work on), there is no way you can go unnoticed.
And this taking into account that less than 5 years ago I arrived in this city, so I’m not from here, people have known each other for more than 3 decades in many cases, and it’s always a little harder for you to get a little farther away from his city, without indication, without family, nor friends, without networking and nothing, counting only with your knowledge and your social ability to communicate. Anyone who moved out of town after completing college can feel a little bit of what I’m talking about.
In any profession move to the area of management, or higher councils is an extra step in the career and make you know new worlds. But this is not what I’m looking for, it’s something that came up and I do not feel like it at the moment
My plan is to be able to have the year 2017 as good as the year 2016, study, work and contribute to my portfolio and remain calm. About the expenses I think they will keep themselves, going up just as inflation rises, with no plans to buy anything, nor change cars, nor reform anything, nor buy anything electronic or greater expense.