AFTER ALL, WHAT IS MY GOAL?

“The starting point of all achievement is desire.” (Napoleon Hill)

When I started to focus on long-term investments, I always had a clear goal of how much I would want to earn in passive income. However, my goal today is not the same as when I started investing with this long-term mindset.

At the end of 2017, I had as a goal to receive BRL 36,000 per year, which would give an average of BRL 3,000.00 monthly. However, as my cost of living increased, today I have a goal of receiving BRL 60,000.00 in dividends per year, which corresponds to BRL 5,000.00 monthly.

However, this amount of R$ 5,000.00 would not make me financially free, as my cost of living will certainly increase, as I still don't have children, for example. But, nowadays, this amount of R$5,000.00 monthly will bring me financial peace of mind.

And since I'm looking for a minimum return of 6% per year in dividends, I need to have invested 1 million of reais (R$1,000,000.00), which I still haven't achieved, as I have about R$ 750,000.00 invested. But seeing my progress, I believe I should hit that goal of having a million invested in the next year or later by 2023.

However, as can be seen from the image above, even though I have increased my invested capital, my dividend percentage is low (4.05%), which I also believe will increase in the coming years as I have invested in many companies that tend to pay more than 6% in dividends.

But despite receiving a low dividend yield, every year I have nominally increased the amounts received. In fact, I have been receiving practically more than 6% in dividends on the amount invested in the previous year.

It is observed that in 2019 I received BRL 21,000.00 in dividends, which represents 7.7% of the amount invested in 2018 (BRL 272,000.00). In 2020, I received BRL 25,000.00 in dividends corresponding to 7.4% of the capital invested in 2019 (BRL 334,000.00). And, in 2021, I already received R$30,000.00 in dividends, which gives me 6.0% on the amount of R$500,000.00 invested in 2020.

Thus, I hope that in 2022 I will receive R$45,000.00 in dividends, which represents 6% of the amount invested in 2021 (R$750,000.00). And if in 2022 I manage to invest one million reais, in 2023 I will have reached my goal of having R$ 60,000.00 in dividends per year.

Well, so these are my goals for the next year: to receive BRL 45,000.00 in dividends and have invested BRL 1,000,000.00.

I will have to work a lot harder than this year, but I am willing to meet my goal.

Wish me luck.

BRAZIL'S INDEPENDENCE

Today Brazil celebrates its 199th Independence Day.

On this holiday, while many Brazilians celebrate Brazil's independence from Portugal, some celebrate their financial independence, which basically consists of having enough income to support the rest of your life without having to work or be dependent on others.

There are many ways to achieve financial independence and here I’ll tell you how I have been doing it in Brazil. So far, my plan is perfectly on track and I should be able to reach my independence on my 38th birthday.

HOW IT ALL BEGAN

Since 2006, I have been thinking about being financially independent, but my plan has never been the same as it is now.

When I was 20 years old, I started investing in a private pension. It was a banking product and had a terrible return, especially because my bank charged a high percentage of fee (4%). I was not satisfied. I wanted to get a higher return than traditional banking products, so I started taking more risks in the stock market.

It was 2009, when I bought my frirst share, I had just turned 23 years old. I was very excited and it didn't take me long to imagine myself as a trader, but I was very wrong. After some losses, I got discouraged and abandoned the plan three years later, in 2012, selling almost my entire stock portfolio, keeping only the stocks that were at a loss.

Despite having stopped investing, I started making more money than before. My professional career was growing, so I decided to come back with the goal of being financially independent. I returned to the stock market at the end of 2017 much more confident than the first time.

AHA MOMENT

It had been five years since I last accessed my brokerage account. Before accessing, I was sure that I would be the best trader in Brazil, but I changed my mind instantly.

As soon as I opened my account, I was shocked by what I saw. The shares I kept in the account had incredible profitability. I really didn't expect this, because up until that point I was thinking about making money in the stock market by buying a stock and selling it at a higher price after a few days or weeks.

So I realized that the key to investing was not in the short term, but in the long term. That's how I started my journey, but honestly, I wish I had started this path many years ago.

TIMES IS MORE VALUE THAN MONEY

There's a popular Chinese proverb that says:

“The best time to plant a tree was 20 years ago. The second best time is now.”

Basically this means that the sooner you start, the better off you will be. Looking back, I regret that it took me a long time to develop a long-term vision, I think I would have reached my goal by now, especially knowing the power of compound interest.

I can't make up for lost time, but thinking I'm getting closer and closer to my goal is something that motivates me more to keep going and even write about it.

So come on, follow with me to FI!