As many of you know, although this is a personal blog, I don't usually talk much about myself. In fact, I have limited myself to introduce myself and to write some other article about my experiences with the stock market (like my experience with Terra and the dotcom bubble) and to present the profitability of my portfolio naked, but little more in the almost 200 articles that I have published. However, in this article I am going to talk about my financial situation, that I am not a rich person and I will explain the reasons why I am not.
Why am I not a rich enough person? What went wrong?
First of all, I want to make it clear that I am not a rich person and I am not quite rich.
As many of you know, I have been writing in the Investment Academy for almost a year and a half trying to help you make your savings profitable. However, some of you may rightly doubt my abilities to teach investment lessons if I have not managed to amass a good fortune investing. In fact, recently, reader Lisa left me the following comment in my article with the guía rápida de value investing that I want to share with you:
Congratulations on your article, my question seems silly or borderline, but why aren't you quite a rich person? What went wrong?
This question does not strike me as silly or borderline at all, but very interesting. In fact, some of you may be asking that question too. That is why I will analyze my situation, which may be similar to yours, to see if something is wrong or if I am on the right track.
The 3 requirements to get rich investing in the stock market and I
Less than a month ago I published an article in which I explained the 3 requirements to get rich investing in the stock market. These 3 requirements were:
To analyze the reasons why I am not rich I have to what extent I have failed to meet these 3 requirements, which is what I will do next.
First of all, I haven't invested a lot of capital. I started investing starting with a modest capital, about € 4.000 that I had saved. During these years I have been increasing the invested capital thanks to constant savings, trying to control my expenses by living in an austere way. As they say, live a little worse today, to live much better tomorrow.
Second, I haven't been investing long enough for the compound interest increase my wealth drastically. I started investing in 2.008, a little over five years ago, a very short time as far as investment is concerned. Since I'm still young (turning 30 this May), I have time to keep saving and let my savings continue to pay off.
Finally, there is profitability. In that regard, I have no complaints. In fact, the profitability of my investments continues to beat more than 95% of the investment funds marketed in Spain. However, I am aware that it will be very difficult for me to continue obtaining such high returns in the long term, but I will continue working to make the most of my savings.
I'm not a rich person, but I think I'm on the right track
You have already seen the reasons why I am not a rich person, but I think none of them are worrisome. However, I am aware that I can improve in all aspects, so I do not intend to lower my guard. What am I going to do from now on?
- Trying to increase my income in the medium term by controlling my expenses in order to increase my savings ratio.
- Be patient and let compound interest continue to do its job.
- Keep reading and training in value investing to maximize the profitability of my long-term investments.
As I always tell you, there is no quick and easy way to get rich investing in the stock market (don't be fooled!), But with time and discipline you will be making the path to financial freedom.