How To Do Your Financial Planning?

Good financial planning is based on goals. That's why it's very important to keep our biggest goals in mind. What do you want to achieve a month from now? And what do you want to achieve 5 years from now?

Whatever your goal, we can imagine that it goes through having financial stability. From a detailed planning you can multiply the possibilities of achieving your goals.

If you are looking for financial stability and want to start planning your expenses. Read until the end and find out how to do it in the best way possible. We separate some easy tips to apply. That way you can start as soon as possible. Come on?

Keep your main objective in mind

You need to focus on what you will get through planning. Always having in mind what you want to achieve will enhance your actions. This is a way to motivate yourself. Imagine how good it will be when you achieve your dreams. Have the life you've always dreamed of. The sooner you start, the faster you'll get there.

It is very common to have multiple goals. At this stage, you can even list them in order of priority. Ask yourself “how much is this dream worth?” In front of each of these goals, put the value of each one. That way it will be very easy to know how much you need to have to do them.

Set a deadline to reach them

This part is very important for you to have an expectation of when your dream will come true. As far away as it may seem, setting a deadline will make it more achievable. Once you've defined your goals and set a deadline, commit. It is impossible to get anywhere without commitment.

Take the time to review your finances

If you have a habit of traveling, you've already spent a lot of time planning your trip. That's because you imagine what every detail of it will be like. Why can't your financial life be the same way?

If you take the time to plan your financial life, your relationship with money will improve. You will make much more conscious decisions. And just like a trip, you will have a perfect itinerary to put into practice in your financial life.

Avoid spending more than you earn

Ever notice how bad it feels to get your paycheck knowing that it's fully committed?

If you suffer from this feeling every month, it's time for you to change your attitude. After all, there is no way to get different results by doing the same things.

This reasoning may seem simple and obvious, but most people make this mistake. According to a survey by ANBIMA, only 33% of Brazilians saved money last year.

It turns out that when this practice becomes a habit, debts snowball. The person ends up entering the overdraft. Use your credit card as if it were an income. It ends up forgetting that the bill always comes.

 

Instead of maintaining a habit of spending more than you earn, try to develop a habit of saving. Beginning may seem difficult, it may even seem impossible. But with willpower little by little you can transform this habit.

According to psychologist Jeremy Dean, author of the book “Why We Do What We Do”, it takes 66 days to create a new habit. So, if you're not in the habit of saving, force yourself to do so for a while. Soon this habit will flow naturally.

One strategy you can apply to avoid unnecessary spending is to pay yourself first. Set aside a part of your salary either 10%, 15% or even 30% to invest.

A good tip is to program your account to reserve this money automatically. Face it as if it were another essential debt. However, a debt that will improve your life in the future.

Create your financial mattress

We've already talked a lot about financial reserve, or financial mattress around here. Financial mattress is nothing more than an accumulated money that can cover your expenses for a period. If you lose your source of income, you do not need to take out a loan.

You can start working with enough money for 6 months. Take a survey on your monthly cost of living. If you live on BRL 5,000, multiply that amount by 6. In other words, you need to add BRL 30,000 to cover six months. When you reach that amount of BRL 30,000, we recommend that you double it to 12 months. That is $60,000. So you can have peace of mind for up to a year.

Make a personal budget

About 36% of Brazilians do not know what they spend, according to a survey commissioned by the SPC. A lot of people think they know how much they spend. But it only becomes aware of this after registering all input and output. Personal budget can give a guideline of your financial situation. It will even take a snapshot of your current consumption habits.

Turns out, you might know exactly what to cut next month. If you see that you went to the cinema three times this month, for example. Next month you can go only one or not go at all. If you've seen that you spend a lot in restaurants, you might want to try making your meals at home. Knowing where the money is going, you have more autonomy to change your strategy.

In the face of this survey, ask yourself: “Is it possible to save a little more?”

Invest your money according to your goals

Once you've determined your goals and established your deadlines, it's time to invest. however you need to be aware of the types of investment related to each objective.

Goals of up to one year, invest in post-fixed fixed income products.

Goals with a term between 2 and five years, invest in fixed income securities. You can include inflation-linked and fixed-rate bonds.

For larger plans longer than 5 years, you may be building a diversified portfolio. This portfolio may contain government bonds, shares, debentures, real estate funds, among others.

When do you need to have financial independence?

Financial independence is being able to live only with the passive income generated by your investments. What monthly income would be interesting for you to have a comfortable life?

You guessed it, now take that value and multiply it by 100. Multiplied? Now divide that amount by 0.3%.

After setting this you will know how much you need to have accumulated to have this income every month.

Revaluate your planning

Changes happen, that's why it's time to review your plan from time to time. Ideally, it should be reviewed at least once a year. But you can set shorter deadlines for even more control.

There are a number of actions you can take along your journey to wealth. But first you need to start somewhere. Start as soon as possible. The life you've always dreamed of awaits. It's up to you to start this walk.

You Can contact to John Labunski for Safe Investment, Investment Finder Investment Advice and Safe Retirement plan.

Debentures: What Are They and How to Invest?

Here at financial coaching, we talk a lot about debentures as an alternative to investing in fixed income. But what are debentures?

If you want to know what debentures are, read to the end and discover not only that but how everything works and how to invest.

What are debentures?

In fixed income investments, you take your money and borrow it from some other agency waiting for the interest. You can lend your money to the government as with Treasury Direct. You can also lend your money to the bank like CDB, LCI and LCA. In other words, lend your money and receive interest as a reward.

Investing in debentures is nothing more than lending your money to a private company. It is an investment model where you lend your money to companies and get your capital back plus interest.

You may ask yourself: why would the company take money from you and not from the bank?

Because in this way, the company manages to have control over the form of payment and interest. It can reconcile the flow of payment to the investor with the maturation of your project. So, in terms of cash flow, funding via debentures is more viable than a bank.

Nominal Debentures

This modality is scarce in Brazil, it refers to debentures that are issued by the company itself and it is itself responsible for the issues and transfers. 

Debentures Booked

In this modality, the entire process is intermediated by an investment platform or stockbroker. This intermediation must be registered by B3.

Profitability of a debenture

Compared to other types of fixed income investments, the debenture has a certain advantage in profitability. However, this profitability advantage is associated with the risk of the modality. Was it difficult to understand? To make it easier, let's make a comparison.

When you invest in Treasury Direct, you have more security because this investment is guaranteed by the Government. When it comes to a company, the stakes are higher. So, to be more attractive to investors, debentures offer better interest. And consequently, the profitability is a little higher.

Debentures have a maturity date, sometimes it is possible to know how much the profitability will be before contracting.

Pre-fixed profitability: you already know how much the income will be even before hiring.

Post-fixed profitability: this modality is linked to an index. It can be indexed to the CDI, or also to the Selic rate. In this case, despite being fixed, the contractor only knows the profitability at maturity.

Hybrid profitability: this modality guarantees part of the profitability and another part is indexed to some index such as the IPCA, for example.

 

Incentive debentures

There are some products in this segment that are encouraged. They are exempt from income tax. So, in addition to the interest benefit, you have a tax-free return. This boosts your profitability.

This type of debenture is issued when the company is carrying out an infrastructure project. This is a government incentive for investors to facilitate the company's fundraising.

Risk assessment (rating) and guarantees

Before investing in a debenture, you have to be aware of the rating. Rating is a kind of risk level in which the debenture is rated. The higher the rating number, the lower the risk. The lower the number, the riskier the investment.

Thus, profitability tends to be lower the higher the rating grade. When the grade is low, the debenture offers greater profit possibilities. So, if you are planning on investing in debentures, stay tuned. Check that the rating level is in line with your investor profile.

Some people are looking for more security and prefer a higher level. More daring investors, on the other hand, prefer risk for the opportunity for greater profits. What's your profile?

Some debentures offer an additional guarantee in the event of bankruptcy. These guarantees can be some property of the company, such as buildings, factories, land and others.

Floating guarantee: this guarantee gives priority to debenture holders in the event of the company's bankruptcy. Debenture holders have priority over shareholders. This guarantee can be realized through the company's assets.

Unsecured Warranty: this warranty is the most inexpressive, after all, it does not actually express a real warranty. In case of bankruptcy or composition, the debenture holder has no priority.

Subordinated guarantee: Subordinated debentures offer higher returns because they are the riskiest. In the event of bankruptcy, the shareholder has priority over the debenture holder.

Term and liquidity of a debenture

If you are looking for a long-term fixed income investment, debentures can be a great deal.

There are debentures with different maturities, but it is common to see 10-year maturities for redemption.

A disadvantage of debentures is low liquidity. You may even be able to sell your debenture before it expires, but you could end up losing money if it goes down in value. Full yield guarantee even only at the end. So be careful before investing in this modality.

How to invest in a debenture?

You can consult your investment broker. Today there are digital brokerages that make it much easier when investing.

If you want to find a debenture in issue, look for a way to get notified. Otherwise, it remains only to buy on the secondary market. Through your brokerage, you can find out information such as the form of income, maturity and type of guarantee.

 

Try to invest in a debenture as a form of portfolio diversification. After all, due to the risk involved, it is worth protecting your assets by allocating them to different types of assets.

You Can contact to John Labunski for Safe Investment, Investment Finder Investment Advice and Safe Retirement plan.