Dreaming of Compound Interest? Looking for investments that yield 1% per month?

The search for investments that yield 1% a month is common for those who want to put their money to work and generate passive income. However, it's important to be cautious and understand that not every investment that promises high monthly returns is risk-free. In this article, we'll help you demystify this issue. You'll find out which investments come close to that 1% monthly return, analyze the risks involved and learn about strategies for building a balanced and profitable investment portfolio.

Understanding the Market: Profitability versus Risk

In the world of investments, the relationship between profitability and risk is fundamental. The greater an investment's earning potential, the greater the associated risk. Fixed-income investments, such as government bonds, tend to offer lower returns, but are considered safer. Variable income investments, such as shares on the stock exchange, have greater volatility and the potential for more significant gains, but also involve the possibility of losses.

The Magic of Compound Interest: Boosting Your Profits

The concept of compound interest is fundamental for those seeking profitability in investments. Imagine that you invest R$1,000.00 at a yield of 1% per month. At the end of the first month, you will have an income of R$10.00, totaling R$1,010.00. The following month, the yield will be calculated on the total amount accumulated, i.e. 1% of R$1,010.00, generating interest on interest. Over time, this effect is enhanced, making your assets grow exponentially.

The Reality of 1% a Month: Investments with Similar Returns

It is important to be cautious when looking for investments that promise returns of around 1% per month. Some investments fall within this profitability range, but you need to analyze the risks involved:

  • Tesouro Direto IPCA+: This federal government bond protects your capital from inflation and offers yields based on the variation of the IPCA (Broad Consumer Price Index) plus a fixed rate. The yield varies according to the maturity of the bond, but historically it is usually close to inflation per year, which can be close to 1% per month depending on the economic scenario. It is considered a low-risk investment.
  • Real estate funds (FIIs): Investing in FIIs allows you to become a partner in real estate developments and receive monthly income from renting out these properties. The average return on FIIs is around 0.7% to 1% per month, but can vary according to the type of FII and the real estate market scenario. It's important to remember that the real estate market also has a certain volatility.
  • Shares dividends: Investing in shares of companies that pay regular dividends can be a way of generating monthly passive income. The amount of dividends varies according to the company's profit and its dividend distribution policy. The stock market is volatile and stock prices can fluctuate, requiring investors to be tolerant of risk.

Don't Put All Your Eggs in One Basket: The Importance of Diversification

To minimize risks and seek long-term profitability, diversification is fundamental. Don't concentrate all your capital in a single investment that promises high monthly returns. Build a diversified investment portfolio, including fixed and variable income assets, taking into account your investor profile, your financial objectives and your investment horizon.

Beyond Income: Factors to Consider When Choosing Investments

  • Fees and costs: Every financial investment has associated fees and costs, such as management fees, brokerage fees and income tax (IR). Analyze these costs carefully so as not to have your monthly income eroded by excessive fees.
  • Charter period: Some investments have a grace period, meaning that your money is tied up for a certain period. Choose investments with redemption periods that are compatible with your financial objectives. If you need liquidity to redeem your money at any time, opt for slower investments such as the Selic Treasury.
  • Financial institution: Choose reputable brokers or banks that are well regulated by the Central Bank of Brazil to guarantee the security of your investment.

Strategies for the Long Term: Seeking Consistency in Earnings

Investing with the long term in mind is essential to maximize returns and mitigate risks. Here are some strategies to help you achieve this goal:

  • Invest periodically: The "average price" strategy consists of regular contributions to a particular investment over time. In this way, you buy more shares when the price is low and fewer shares when the price is high, balancing out your average purchase cost and boosting your long-term earnings.
  • Reinvest your income: Instead of spending all the passive income you receive, such as dividends from shares or rents from FIIs, reinvest a portion of this amount to accelerate the growth of your assets through the power of compound interest.
  • Have discipline and avoid the emotional: The financial market fluctuates, and it's natural for asset prices to rise and fall. Maintain discipline and avoid making hasty decisions based on short-term fluctuations. Trust your long-term investment strategy and focus on your financial goals.

Conclusion: Seek Consistent Returns and Build a Peaceful Future

Investing for a monthly return of 1% can be a goal, but you need to consider the risk context and aim for consistent gains over time. By diversifying your portfolio, investing with discipline over the long term and reinvesting your income, you leverage the power of compound interest and build a solid foundation for achieving financial independence. Remember, success in investments requires knowledge, planning and a reliable investment broker to help you. With the tips in this article, you've already taken the first step towards setting up a balanced investment strategy and starting the journey towards financial peace of mind.