Opinion – From Grain to Grain: Choose your plan to reach the first million

Your first goal should be to reach your first million. The number seems far off to most people. However, with simple planning and a lot of discipline, the goal becomes achievable. I explain below what you should consider.

Achieving financial assets of R$ 1 million was my first goal. I remember at that time that I imagined that when I reached it, I would stop working or start a business.

Those who follow me know that I started my career in the financial market in mid-1997. I believe I reached this goal ten years later. It was later than I would have liked, but it was earlier than planned.

Needless to say, I didn’t stop working after reaching the goal. I didn’t set up my own business at that time either. My investment advisory business was started 10 years ago i.e. in January 2013.

The great advantage of reaching the goal was not to stop working, but to have the security to make career decisions that maybe I wouldn’t have made if I didn’t have this “mattress”.

I remember at that time when I was saving, many said: ahh, this is silly, in ten years this R$ 1 million will not be worth anything.

I bet many also thought the same as soon as they read the title.

Obviously, inflation erodes the purchasing power of that amount, but listen to what I’m going to say. Twenty-five years ago R$ 1 million was a lot of money, today it still is and twenty years from now it will also remain an excellent amount.

I agree that the majority of the population is not in a position to propose this goal. This is not the goal for them, but for you. So let’s see how you can achieve.

I’ll give you five planning alternatives:
Plan 1- Target for a period of 10 years: save R$ 5 thousand per month;
Plan 2- Goal for a period of 15 years: save R$ 2,500 per month;
Plan 3- Target for a period of 20 years: save R$ 1,400 per month;
Plan 4- Goal for a period of 25 years: save R$ 800 per month;
Plan 5- Goal for a period of 30 years: save R$ 500 per month;

You have five alternatives to reach the goal of R$ 1 million. Choose the term according to your current savings capacity.

For all these goals, I considered an interest rate of just 0.8% per month. Therefore, a rate equivalent to only 80% of the current CDI and corresponding to 10% per annum. That plan should be revisited if interest rates fall much below the 10% per annum threshold.

At the beginning, as interest rates are higher, it will allow you to build fat for the future when they drop.

The most important thing is to get started and have the discipline to stick to the plan. In my case, in the past, I didn’t choose Plan 1. I was lucky to go through a time when interest rates were more than double the current rate.

So, take advantage of this moment of higher interest rates to make a bigger commitment.

More important than the goal is the acquired habit and how you transform yourself when you pursue it.

So, don’t make any more excuses, choose your plan and start this journey.

Michael Viriato is an investment advisor and founding partner of Investor House

Follow and like De Grão em Grão on social networks. Follow the investment lessons in Instagram🇧🇷

If you have any questions or suggestions for themes, please feel free to send by email.