Financial assets: what are they? How to invest?

Find out what financial assets are and how to start investing in them in a diversified and effective way!

Knowing what financial assets are and how to invest in them is a promising task. In fact, this is a fundamental step if you want to obtain good returns and achieve financial freedom.

In this content, we have gathered the main concepts about financial assets, examples and practical tips to start your financial investment in an effective and advantageous way. Continue reading and find out more!

What are financial assets?

First of all, we can say that financial assets are economic rights, with a specific value, traded on the market. However, they are not concrete, as is the case with a house or a car, for example.

In other words, They are a type of “paper” that represents a value and generates income for the holder over time. These investments are bought and sold, as is the case with Tesouro Direto, a public security in which the investor earns interest or on sale.

Financial assets vs. financial liabilities

Are financial assets and liabilities the same thing? This is certainly a common question for beginner investors. The answer is no!

In short, “liabilities” are expenses and debts that generate costs, such as rent, financing and other expenses that compromise the budget. Therefore, while assets generate gains and income, liabilities generate costs and debts.

Therefore, to have good financial health and always live in the black, assets need to be greater than the sum of liabilities. Buying assets to increase income and equity is the most effective strategy for making money grow.

Financial assets vs. other types of assets

In addition to securities, there are other types of assets that make up a company's assets, such as land, houses, cars, jewelry and other valuable assets.

However, they generate debts, such as IPTU, or are devalued on the market, as is the case with cars and other vehicles.

In fact, real estate (houses, buildings, land, etc.) is the type of asset with the greatest potential for appreciation over time. However, it still results in expenses.

Therefore, investing in financial assets is more advantageous, after all, it does not create costs, it just increases your income. Some options have daily liquidity, that is, your money yields interest every day and can also be withdrawn at any time.

Examples of financial assets

In the world of investments, assets are divided into two main categories: fixed income and variable income. In the first category, the income is reported at the time of investment. In the second category, it undergoes constant variations and the profit can only be known on the day of redemption.

Actions

Firstly, the actions are variable income assets that represent the smallest part of a company's share capital. Therefore, when purchasing it, the investor becomes a partner in the business.

In other words, when purchasing a share on the stock exchange, the investor becomes a minority shareholder and participates in the profits and losses obtained..

Another important detail, if you choose to invest in this asset, is the possibility of entering and leaving the company easily. The shareholder has the flexibility to migrate to another more attractive business whenever he finds it convenient.

Investment Fund Shares

Secondly, Shares are investments that represent your participation in collective financial applications. In this way, with the purchase of the Funds, the investor becomes a shareholder.

The gains are proportional to the amount of money injected into the asset and one of the advantages is that the investment is managed by a professional specialized in the area.

Therefore, investors do not need to worry about moving and diversifying their financial investment portfolio, allowing them to obtain higher returns more easily.

CDB (Bank Deposit Certificate)

In advance, the CDB, Bank Deposit Certificate, this is a private security issued by Banks. The purpose is to raise funds to finance the institution's financial operations.

In other words, it is as if you took out a loan from the Bank, and in return you receive the amount invested along with interest rates proportional to the investment period.

In fact, the CDB is a fixed income investment that, in addition to generating good returns, also has the guarantee of the FGC (Credit Guarantee Fund).

The profits depend a lot on the amount invested, because the higher the deposit, the higher the return on withdrawal. In the meantime, there are many financial institutions where it is possible to start with a very low amount, as is the case with Nubank, for example.

LCI and LCA

The acronyms LCI and LCA, mean respectively: Real Estate Credit Letters and Agribusiness Credit Letters. Both are fixed income securities issued by banks.

The difference lies in the way the resources are invested. While LCIs invest in the real estate sector, LCAs use the money invested in the agribusiness sector.

The profitability and maturity date of the bonds are defined at the time of purchase. Furthermore, interest rates can be either pre-fixed (with a fixed rate throughout the period) or post-fixed (fluctuates according to the economy).

Public Securities

In advance, the Public Securities are fixed income assets issued by the Federal Government. The resources raised are used to finance the country's public debt.

You have probably heard or seen the term “Direct Treasury Investment” somewhere. In fact, the securities are sold by the Direct Treasury and today anyone can buy them.

The application works similarly to a CDB, where you lend money and in return receive interest as income. In this case, the institution benefiting from the “Loan” is the Federal Government.

For this reason, the risk is very low, as there is a guarantee of National Treasury. Furthermore, it is possible to choose various types of income, such as Treasury Selic, pre-fixed interest or interest linked to the inflation rate.

How to invest? Learn how to choose your investments well

First of all, to select your investments well and achieve the expected results, you need to have basic knowledge about the assets, as well as carry out financial planning.

As we have already seen the first condition about what assets are, now it is time to get down to business and establish strategies to achieve your goal. Check it out!

Organize your finances

First of all, it is extremely important to take an x-ray of your financial situation. Therefore, at this stage, analyze your personal balance sheet as if it were a company.

Take a notepad and list all your debts on one side and your income on the other. If your expenses are greater than your income, establish a strategy to balance your accounts.

Define your investor profile

Next, find out exactly what your investor profile is. This step is essential because you can analyze which assets correspond to your goals and the risks you are willing to take.

Set your goals

Well, after finding out how your current financial life is going and what your investor profile is, it's time to define your goals.

First, you need to analyze the time needed to complete it according to your conditions. Therefore, see if it fits into the short, medium, or long term.

Generally, time periods correspond to this parameter:

• Short (up to 2 years);
• Medium (over 2 years to 5 years);
• Long (over 5 years).

So, use the table as a reference to choose the maturity date of the investment. After all, the objectives must always be aligned with the action taken when redeeming the investment.

Start saving money to buy financial assets

The next step is to save money each month to start your investment portfolio. Therefore, when you receive your monthly income, set aside 10% to 30% to use towards your financial goals.

Build an emergency fund

First of all, you need to be prepared for the fluctuations that occur in the financial market. Therefore, your emergency fund should be your number one focus!

This is the amount you will have to rely on in case of any financial unforeseen circumstances. The amount of money should be enough to cover up to 12 months of your monthly expenses.

The amount can be earned by purchasing an asset that is consistent with the objective and can be withdrawn when needed. A good investment option is a CDB with daily liquidity.

Start with fixed income

In the beginning, it is advisable to opt for fixed income assets! After all, they are safer options with more predictable returns. Therefore, investments such as Treasury Direct, CBD, LCI and LCA are perfect for starting your applications.

However, during times of low interest rates, the rate of return is lower. Despite this, fixed income is necessary to start investing in variable assets and obtain higher returns more safely.

Diversify your portfolio of financial assets

Invest your money in different types of financial assets. Diversifying your portfolio increases the possibility of earning good returns. This is independent of fluctuations in the financial market, because the chances of obtaining advantageous returns in the long term are greater.

Therefore, try to avoid concentrating your financial investments in a few assets. After all, when one is in decline, another may perform better in times of crisis.

Wrapping up the topic on financial assets

Based on what has been said, financial assets are the most advantageous types of investments that generate promising returns. After all, there is no need to incur high costs for maintenance.

However, before starting, you first need to self-evaluate your current financial situation and your investor profile.

It is also necessary to establish what your goals are and how much time you will need to achieve them. This way, you can find the perfect financial investments.

But don't forget to create your financial reserve and diversify your financial asset investments. In other words, don't put your eggs in just one basket!

Did you like the content? Take advantage and also read about where to invest in the long term! Click the button below and find out more!