IDENTIFYING MY INVESTOR PROFILE

There is no investment without risk

After building up my emergency reserve, I could start investing. But before that, I needed to know my investor profile: how much I would like to earn and how much risk I would be willing to take.

There are three basic investor profiles: the conservative, the moderate, and the aggressive. The conservative investor seeks to have security and liquidity much more than profitability. The moderate investor has a higher degree of risk tolerance than the conservative one, but less than the aggressive one. And the aggressive investor prioritizes profitability and has great tolerance for risks.

INVESTING SAFELY

At that time I was a conservative investor: I would accept having a low profitability, but I would not accept losing money at all.

Based on that, I looked for financial products that would give me security. After a quick search, I found a type of investment: Brazilian bonds. But as I didn't understand anything, I indirectly bought bonds through Investment Funds.

Although there was a risk, the chances of losing money investing in these funds were extremely low, as the probability of the Brazilian government not paying the debts was very low.

I WAS NOT SATISFIED

Despite investing every month in that investment fund, I still didn't have an investment strategy. At that time (mid-2007), I was only concerned about receiving profitability above inflation.

But, little by little, I began to realize that the bank that managed the investment fund was charging a very high fee for it. Not satisfied, I decided that I should invest directly in the government's bond.

After some research on the subject, I discovered that it was necessary to open an account at a brokerage to invest directly in Brazilian government bonds. And that's just what I did.

PLANTING THE SEED OF FINANCIAL INDEPENDENCE

After opening the brokerage account, I redeemed all the money I had invested in the investment fund and allocated it directly to the government bond.

Opening a brokerage account also made my life as an investor easier, as their system allowed me to schedule my investments in government bonds on a monthly basis. Then, in December of each year, I would schedule how much I would invest per month for the following year. This was only possible because I kept detailed control of my budget.

At that time, I had just planted my seed to achieve financial freedom, but I hadn't realized it yet. I came to see this almost two years later.

But I'll write about it next week.

See you there!