Many people continually ask me, how can they make a significant change in their financial lives?
- The rate (%) of savings and personal investment
- The time during which we let ripen and work our investments
- The actual rate of profitability we obtained during this period
1. To strengthen and invest in a disciplined way 10% of all net income we owe annually.
This percentage so selected, because no one changes their lifestyle to adjust their expenses to 90% of their current revenues, plus a 10% personal savings and investment rate is perfectly sustainable in time. It is important in this respect that people can increase and diversify their income sources over time, and to the extent that their revenue increases their contributions.2. Keep the investment plan for a minimum 10-year horizon.
Investment accounting provides its fruits, the best profits are always obtained in the medium and long term. 10 years is a period of time that will allow savings and investment to be part of our lifestyle and the creation of a significant capital a reality. It is possible that by reaching the goal, many people decide to keep their investment portfolios longer, and that would be great.3. Get average income of 10% per year.
When history is reviewed in investments, we see that a diversified portfolio of good American actions in the past 25 years has achieved annual averages of 11%. For this reason, our portfolio must have a design that points to an annual 2-digit profitability with dividend reinvestment, to work compost capitalization.This is how this simple financial method supported in the mnemotechnic of 10 x 10 x 10, can contribute to the creation of wealth and accumulation of capital, helping to change financial lives forever!
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