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With 20 years of experience in the financial world, Alfonso Marcelo is an authority in the field. The founder of Finformado and co-author of the book ‘Dear money, I hate you and I love you’ assures that the two basic elements to be an investor are knowing how finances work and knowing yourself .

“I studied engineering because I like mathematics, logical thinking, processes and being on the subject of numbers, which encompasses finance. Back then I didn’t have that much financial knowledge and had just learned a few basics like inflation, GAT, net present value, and how to get a return… It was so many things! “ , said Alfonso during his talk ‘The challenge of being an investor’ at the Money Fest 2021 interactive personal finance festival.

The expert says that his first job after graduation was in the treasury department of an insurance company. Later, Alfonso Marcelo worked in a management and investment advisory company (Wall Management), and later entered the big leagues: a brokerage house, which “is a stock broker that connects investors with companies and industries where it can be reversed ”.

Little by little, job after job, the now master of finance accumulated enough experience and knowledge to be able to condense into two basic principles what is needed to get started as an investor: “know and know yourself,” he said.

1. Know the financial world

Beginning investors can be intimidated by all the elements that the world of finance involves. For this reason, Marcelo explained what are the basic principles that you must know to start investing.

– Concepts . Finances can be very complicated at first, as it has many concepts and terminology that scare beginners. The ones that you should keep in mind as a novice investor are mainly the different investment products (bonds, stocks, futures, derivatives, structured instruments, etc.), the terms of these investment instruments and the returns or interest they generate.

– Products . “There is an incredible variety of products, so how can we make a better decision? In Mexico there are more than 10,000 regulated investment products “ , Alfonso pointed out, noting that he himself does not know all of them, because ” it is practically impossible. “ With this huge offer of investment instruments to choose from and decide where to put your money, the best thing, at the beginning, is to get involved with those who are closest to hand . For example, you can approach your bank or a company specialized in investments for advice based on your goals, the amount you can invest and the risk you are willing to assume.

– Legal and regulated. Another important part is to differentiate investment products that are regulated from those that are not. “Investment products that are not regulated are not necessarily illegal. But if, for example, they charge us a surprise commission, who are we going to turn to? The difference is that, in the case of regulated products, we are protected by the CONDUSEF ” , he explained.

– How and how much to invest? In this universe of options there are products that suit you more than others. At this point, the ideal is to seek expert advice to guide you. “Even knowing finances, you need to hire someone to master them and help you,” he says. “A few years ago you needed to have a million pesos to be able to invest. Now you can buy shares with very little money, “ added the expert, who stressed the importance of diversifying your investments , which means putting your money in different products and not betting on just one.

Alfonso Marcelo during his presentation at Money Fest 2021.

2. Know yourself

Knowing the basics of finance is only one part of becoming an investor, the other is knowing yourself. In this sense, Alfonso Marcelo says that there are three elements that you should analyze:

– Goals. It is important to define personal goals to know what you will do with your investments and with your earnings . Do you want to collect the down payment to buy a house? Do you want to grow your money to have a juicy retirement fund? Or maybe you want to become a full-time investor and use your returns or earnings to reinvest and ‘live off your income’.

– Lifestyle. This will determine if you are capable of being austere in order to invest more to earn more in the future, or if you prefer to take your returns as they arrive and spend them in the present.

– Investment profile. “We have to know how emotions affect the way we handle our money,” Alfonso stressed. “We might think that the more we learn about investing and finance, the more aggressive we are when investing, but that is not true. For example, I have a moderate investment profile. I mean, I’m not that conservative, but I don’t go crazy investing in exotic things either. I like something regulated, that gives me performance and that goes according to my goals ” , explained the specialist.

“When we have this whole package of ‘getting to know me’ , we can become investors,” Alfonso Marcelo concluded.