I would like to start this article by sharing with you one of the definitions of "Economy" that most motivate me professionally: "social science that studies the means to satisfy unlimited human needs from the scarce resources available". The reason why I mention this definition is because it raises an interesting problem (imbalance) applicable to all spheres of the economy, including finance and personal investments.
The first thing we must keep in mind is that, from the financial point of view, a person is not different from a company. This means that every individual has assets (home, car, clothing, computer, stock) and has liabilities (credit cards, mortgage loans, vehicle loans, life insurance). If we want to determine the patrimony or wealth of a person, as would be done with a company, we must subtract the liabilities from the assets. To the extent that our liabilities are less than our assets, our wealth will be positive, otherwise, as happens with companies, we will be bankrupt.
The next step is to understand that, like any company, a person also has goals that he or she wishes to fulfill in the future, for which he requires money to carry them out. What needs or objectives do we have? (i) short-term objectives, which are mainly needs that can be covered by our current income; (ii) medium-term objectives (between 1 and 10 years), such as education of children (school, university), purchase of goods (home, car), travel; and (iii) long-term objectives (more than 10 years), such as financial independence (early retirement, own business) and retirement plans. It is in points (ii) and (iii) that the concept of "personal investment" becomes more relevant, because each individual must plan with due anticipation the source of wealth (resources) that will allow them to reach these objectives (needs) . That is, it is through investments that one manages to increase their wealth to meet one (several) future need (s).
Let's see how this works. Investments are part of our assets, allowing us to be profitable over time, and in this way, can increase our wealth. For this to be viable, we must establish a wealth creation strategy. In simple words, this means projecting our income and expenses into the future and determining how much we can save. From this savings, the investment process can begin to grow our wealth and achieve our personal goals. An important point here is that the fear of investing must be lost, because without investment, it is very possible that our goals can not be achieved. The younger you start the savings-investment process, the greater the objectives that can be met in the future.
Recall, investments always have a goal or personal purpose (need) from which a strategy or action plan to be followed is designed. This is to invest professionally. My main interest from this rostrum will be to allow each one of you to begin to understand the importance of investing, and that you can learn more and more about the professional process that means structuring an investment strategy according to the profile and needs of each person.
