“At 51 years old, Juca still works hard to support his family and keep up with the bills. Without any financial reserves, Juca cannot even think about stopping working, as he is still finishing off some debts and the financing of his own house, which is finally coming to an end.
By dedicating his whole life to his career, he occupies a good position in the company he works for, and with the good salary he earns he manages to have some luxuries like keeping two cars, one for his lovely wife and one for himself.
Juca also manages to take a nice trip every year on vacation and on top of that pays for college for his youngest son who will be graduating in law in two years.
Juca cannot even think about losing his job, but always seeing the “glass half full” he continues to work smiling every day, because in a few years he will be filing the paperwork for his retirement.
The problem is that if you retire through Social Security, you will hardly be able to maintain the standard of living you have achieved over all the years of work, and if you cannot count on the help of your children, you will have to see everything you have achieved go to waste. away and bitter a retirement with a standard much lower than what you had when you worked.”
This is a fictional story, but unfortunately it is not far from being true for many Brazilians.
Do we know how to identify which mistakes we make throughout our lives that prevent us from being financially independent?
We will now see what they are.
Error #1. 18 years, the first car
Upon turning 18, the dream of most Brazilians is to get a driver's license and then buy the first car of their lives.
The feeling of freedom of having one's own vehicle leads young people to use all their savings to take that first step. And the most important thing is to see that the financing installments fit in the pocket and still have the right to have some change to go around on the weekends.
The absurd amount of expense that comes with such an acquisition is not taken into account. IPVA, fuel, maintenance, insurance. (excluding financing installments)
Soon all the salary earned early in his career goes to the car dealership and more taxes that support our corrupt government.
Retirement? It's still too early to think about that...
Error #2. From intern to first major role
The first promotion at work we never forget. That joy of having the salary increase is priceless! Or is it?
“New salary, new life.”
The second big mistake we make is to increase the amount of spending as our salary increases.
Young people today live in a culture totally focused on consumerism.
Being called the “poster boy” of big brands, Brazilians today are concerned with consuming designer clothes, expensive cell phones, and vintage cars.
Instead of maintaining a simpler standard of living, or just maintaining the same standard as the salary increases, again the opportunity to start the retirement plan is left for the future.
Error #3. Who marries wants house
One of the best phases of life and of a relationship is dating. We meet our soulmate and soon we want to spend the rest of our lives with her.
Therefore, we take a new important step: marriage.
But as the popular saying goes: “Whoever marries wants a house”. Soon, we look for a new financing that fits in our pocket.
Third big mistake, getting into real estate financing right at the beginning of the marriage.
With no stability at all and still with the wedding party debts, we move towards yet another huge debt, and again the concern with retirement is for later.
Error #4. children's studies
Giving all the best to our children is not wrong, the problem is leaving the retirement plan aside once again.
Fourth mistake, leaving everything aside and returning all savings to the children.
Our children will be able to count on student loans for college or even be able to enjoy a public university. But what about our retirement, how is it?
Error #5. Trusting the Pension System
At the end of our professional careers and with no financial reserve, the only alternative is to rely on the government for retirement.
Debating whether the social security system will be overloaded or not is not even worth it. The question is: “Do you want to entrust your retirement to the government that today uses public money for its own benefit and does not guarantee either health or education?”.
It really doesn't make sense to entrust something as important as retirement to a government as flawed as ours. What Brazilians don't think about is that the INSS they pay today supports current retirees, and there is no guarantee that the social security system will be able to support their retirement in the future.
Here are some tips to avoid making the same mistakes:
– In the case of a car, do not finance it! Collect money to buy in cash, and preferably a simpler, used car. (new car in Brazil is very expensive, besides losing a lot of value when we take it from the dealership)
– For real estate, it is better to wait for a moment of greater stability in life, when you are in a steady job, with the certainty that it will not be necessary to change city or state.
– Start your retirement plan as soon as possible, because the later you start, the more money you will have to save.
– Maintain a simple standard of living, never above purchasing power.
– Invest time in your financial education, learn more about investments, this will bring great returns in the future.
– Do not trust the government, depend only on yourself for the formation of your retirement.
