In many countries, including Brazil, April 1st is known as April Fools’ Day. Speaking of which, the financial market is surrounded by myths and lies that can hinder you or even prevent you from investing and building wealth. We separate (and clarify) some of them!
The lies they tell you about investments
1. Emergency reserves are for beginners
You’ve certainly heard of emergency or opportunity reserves. It is nothing more than money saved for eventualities. In short, the ideal is to save 6 to 12 months of living costs. Here, we explain everything about the subject.
Anyone who thinks that the emergency reserve is only for those who are new to investing or for those with more conservative profiles are mistaken.
So, if you have been investing for 1, 2 or 5 years, you need to have a reserve. If you have a variable income portfolio, it becomes even more important.
“The reserve will prevent you from taking out unnecessary credit and allow you to take advantage of good opportunities. It is the safety cushion, even for more sophisticated investors”, explains Valter Police, financial planner at Planejar.
2. It’s too early to think about retirement
Living old age with financial comfort is everyone’s desire. Therefore, saying that it is too early to think about saving and investing for retirement is a mistake. On the contrary: the sooner you start, the easier it will be. Time, in this case, is an ally to make money pay off.
“Private Pension is a subject that you have to take into consideration as soon as you receive your first salary. The sooner you think about this issue, the less effort you will have, even if you have to adjust the path over time”, highlights Valter.
3. In fixed income you don’t lose money
Another investment myth. Fixed income is more predictable and secure, but not 100% risk-free. Factors that can make you lose money include marking to market and redeeming bonds before maturity.
“Investing in fixed income means you are lending money to “someone”. So, right away, you already have the risk of defaulting”, explains Valter. Even assets guaranteed by the Credit Guarantee Fund (FGC) have a limit.
4. To diversify, you have to take risks
Diversification comes precisely to minimize risks when investing. Furthermore, diversifying does not necessarily mean putting money in fixed and variable income assets. You can, for example, set up an investment portfolio with Treasury Direct bonds only, mixing different forms of remuneration, terms and roles.
5. Investing means making money fast
One of the most dangerous lies. Investing is a process that requires time, planning and knowledge.
So, miracle offers don’t exist. “If you hear about returns per day, per week, risk-free returns, or even the possibility of investing to earn a lot of money quickly, rest assured that it is a big lie”, highlights the planner.
In fact, the co-president of the Board of Directors of Itaú Unibanco, Roberto Setubal, gave an interview to Financial Intelligence, in which he said that investing is more like a marathon than a 100-meter run. Check out the interview below: