Capital Management, Investments And Financial Freedom

As a first approximation, I would like to point out that the ultimate goal must never be wealth but at most a dignified life and this regardless of the sector in which you operate (be it Trading, long-term investments in cryptocurrencies, IT sector, engineering and any other), in this article I will provide some advice on investments and how to manage capital. To be successful, the first thing is to take as an example the people who produce wealth but we must also take into account those who have not made it (studying their mistakes). Taking only those who have made it as a reference is wrong because what is valid for one person does not necessarily apply to everyone else. Whoever got rich with cryptocurrencies or with a lottery ticket does not mean that it is within everyone’s reach.

ADVICE
1) Train yourself in the sector you are passionate about and create a brand
2) Choose the sector where there is not much competition but it must not be zero competition either (otherwise it means it has no market)
3) Having luck (it may seem like a trivial concept but it is not. “Luck” should be understood as “opportunity”, the more you try, the greater the probability that sooner or later things will go in the right direction)
4) Spend less than you earn and therefore know how to manage your assets
5) Don’t fall into the “Rat Race” error (the more you earn, the more you spend. You can’t put anything aside or invest)
6) Look for “cumulative advantages” (those who are rich have opportunities that make them even richer, for this reason it is essential to invest and not waste money. After all, there is a famous saying that says “transforming $100 into $110 is work. Transforming 100 million dollars into 110 million is inevitable”)
7) Take advantage of compound interest (increasing your assets from year to year allows for exponential growth of your assets if invested or rented)
8) All the rich ones (we are referring to assets of hundreds of millions of dollars or billions) have worked little and invested a lot (be they properties, companies, shares, etc.) or are entrepreneurs. You will not become rich by working (this is not a sentence to denigrate those who work but it is a fact)
9) It is essential to have a strategy and a certain propensity for risk but not to be a crazy person who risks all the capital and therefore diversify investments
10) Anticipate/predict trends (think of those who invented online streaming services, who invested in Bitcoin holding for about ten years, who created a cryptocurrency exchange or who created online eCommerce like eBay/Amazon)
11) Choose a good business model
12) Avoid letting your company fail (by mismanaging money, risking more than necessary and choosing the right people)

4% RULE: FINANCIAL INDEPENDENCE
This is a rough calculation used in finance to calculate how much money you can spend from your investments each year without running out of them in the long term. This rule is often associated with the goal of achieving financial independence.
According to the 4% rule, you can safely withdraw about 4% of your investment portfolio per year, adjusted for future inflation (the amount you withdraw each year should be adjusted for expected inflation, meaning that you should increase the amount of withdrawals each year to account for rising prices).
The main goal of the 4% rule is to make your investment portfolio sustainable in the long term. In theory, you should be able to continue withdrawing 4% (adjusted for inflation) each year without depleting your funds.
It is important to note that this rule works best if your portfolio is well diversified and invested in a mix of stocks, crypto bonds and other assets. Diversification can help mitigate the risk of significant losses in your portfolio.
It’s important to monitor your portfolio and adjust withdrawals based on market conditions and inflation. If investment returns are lower than expected or if there are significant fluctuations in the financial markets, you may need to make adjustments.
Therefore, you can calculate financial independence by calculating the product of how much you spend in a month (total expenditure) by 12 months (you get annual expenditure). Then “annual expense” multiplied by 25 (the famous 4% we were talking about).
I hope that this article has been useful to you and that you are able to take advantage of some of these principles.