In the elaboration of a plan for financial independence, the first step is one of the most relevant, but it is usually disregarded. When thinking about an investment plan, usually the quantitative part is placed in the foreground. However, a qualitative criterion, when poorly selected, causes more frustration. I comment on what this criterion is and how to face it.
Who has seen an investor profile questionnaire in banks and brokerages?
Many will say they’ve never seen it, but they’ve certainly filled it out.
Its completion is mandatory for everyone who invests. This requirement of the Securities and Exchange Commission (CVM) was established by Instruction No. 539, of 2013.
If everyone fills in, but many don’t even remember, that means he wasn’t taken seriously.
In fact, existing questionnaires in financial institutions are very insufficient and confusing.
So investors overlook them, but they shouldn’t.
The investor’s profile is extremely important, as for all the calculations to be carried out in the plan, assumptions about returns are necessary. It is necessary to make an assumption of return for the period of accumulation and for the period of enjoyment of the income.
However, these profitability assumptions must consider the portfolio to be invested. This portfolio, in turn, must consider the investor profile. Hence the importance of the profile.
For example, you could consider that the return in the usufruct period is 0.8% per month, above the IPCA, as you believe that you can invest 100% in real estate investment funds (FIIs).
This premise results in a lower capital required for financial independence than if one considers the net income tax gain on a government bond referenced to the IPCA, which would be approximately 0.35% per month.
However, if you don’t have an aggressive profile, you will despair at the first devaluation of FIIs. Possibly, you will want to sell and exchange for the most conservative option. However, the more conservative option will not provide the initially planned income, as the accumulated equity and the return are lower.
Therefore, it is extremely important to know yourself well to take the first step in building the plan.
Try to carefully assess whether you accept price fluctuations in the portfolio and how much variation you can withstand.
If you have doubts about what your real profile is, build the plan considering that you are a conservative investor. But, make non-conservative investments to get to know yourself better.
Remember, the plan will need to be revised periodically.
Therefore, if your profile changes due to any condition or if you realize over time that you have a different profile, you should immediately change your initial planning.
Michael Viriato is an investment advisor and founding partner of Investor House.
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Book: The Journey to Financial Independence
Understand how you will achieve your financial independence
Living on an income is the last step on the journey to financial independence
These are the biggest questions about the journey to independence
Chapter 1 – Construction of the plan
The first step in building the blueprint for financial independence
I have over 10 years of experience working in the news industry. I have worked for several different news organizations, including a large news website like News Bulletin 247. I am an expert in the field of economics and have written several books on the subject. I am a highly skilled writer and editor, and have a strong knowledge of social media. I am a highly respected member of the news industry, and my work has been featured in many major publications.