Black Friday

They say that in America the streets are paved with gold. They say that America is the land of opportunity and that if you’re gonna make it, you’ll make it there. Some even say, with the power of compound interest, you (yes you) can be a millionaire. Say you have $100.00 and it earns 5% interest each year, you'll have $105.00 at the end of the first year. But at the end of the second year, you'll have $110.25. Not only did you earn $5.00 on the $100.00 you initially deposited—your original "principal"—but you also earned an extra $0.25 on the $5.00 in interest. Twenty-five cents may not sound like much at first, but it adds up over time. Even if you never add another dime to that account, in 10 years you'll have over $162.00, and in 25 years you'll have almost $340.00. Not a powerful example, I know, but let’s say you save $10,000 in a retirement plan. What will your investment be worth after 40 years, if you don’t make any additional contributions? Assuming an expected rate of return of 9 percent, the total approximate value of your investment would double to $20,000 in 8 years, $40,000 in 16 years, and $80,000 in 24 years, $160,000 in 32 years, and $320,000 in 40 years.


Translation, if I had saved small and started early, I could be a millionaire by the time I retired.

The problem is I didn’t, and the older I get the more the power of my compound interest weakens. Here in Brazil, I feel even more powerless. Despite the fact that the Brazilian economy is growing, things are not all cupcakes and butterflies and sunshine as the Brazilian media often portrays.

The truth is, for those of us on the bottom end of the economic gab, the cost of living and the dismal salaries are savings prohibitive. I see my girl working three jobs, leaving the house at 7 in the morning and coming back at 9 at night (this includes working every Saturday). At the end of the month, despite the fact that we live rather humbly, don’t have a car, limit our cell phone use, etc., there IS NO money left over. We can’t save, we can’t build, and that starts to really wear on you.


In time, I think we could turn things around. We could find better jobs, be more disciplined with our savings, and maybe buy a used car. We could work as teachers at an international school, maybe open our own business. The problem is, without the proper US based certifications, and with our difficulties saving money, we can’t get there from here. Despite America’s current financial troubles it would still be easier for us to build in the “land of opportunity”, and to attain that wondrous status of middle class. Given the necessary elements of discipline, hard work, and a little luck, I think we could do better than in Brazil.

In this sense, the time is nigh. If we are going to do this thing, we want to do it right. It is well past the hour to get our financial life in shape—to make a concerted and focused effort to save and to begin to build our empire. For this we need a plan, which is finally beginning to materialize:

1. Don't do what most Americans do (i.e. avoid the worship of stuff) 2. Pay off all debt finishing in December (the borrower is the servant to the lender and we don't want to be slaves) 3. Make a proactive monthly budget and stick to it (if you don't control your money it controls you) 4. Put $10,000 into an emergency “when shit happens” account 5. Find work where we are naturally gifted and work hard (get rich quick is stay poor trying) 6. Always live beneath our means (i.e. maintain humble lifestyle even with success) 7. Diversify our investments; invest in mutual funds 8. Save! And learn how to bargain hunt (patience is key) 9. Learn the art of negotiation and pay for things with cash 10. Take baby steps (prioritize plan and move slowly)

Who knows what the future holds? It’s time to open the gate and see where this puppy goes.