We have something very clear: success does not consist of making ourselves the best, but in helping those around us become better. Based on this win-win mentality, Lead Software Engineer Enrique Arrieta and Co-Founder Michel Cohen gave the BEON team a personal finance workshop in which they spoke on how to put savings to work, minimize risk, and manage money with long-term vision. The objective of the workshop was to train the entire team to make wise decisions regarding their personal finances, and achieve their goals despite global economic fluctuations.
Every task, no matter how big, starts with a small step, and finances are no exception. Before talking about investments and portfolios, we must begin from the most basic concept, the monthly budget. Therefore,Enrique broke the ice with a key point regarding this area: ant expenses.
When talking about ant expenses (that is, small but cumulative expenses that strongly influence our budget and can impact our economy if we are not vigilant), he made us see that if you take care of your pennies, the paper money will take care of itself.
The presentation made clear that defining a monthly budget for each type of expense, keeping an accounting, avoiding use of consumer credit and other things that do not generate income, and taking advantage of the tax benefits available in our country are very useful in controlling ant expenses, and having a much stronger financial life in the short and long terms.
To illustrate just how powerful paying attention to ant expenses can be, Enrique used the fact that programmers love coffee. Just by buying 1 Starbucks Coffee a day, you can spend 83 dollars a month, and in 30 years it would reach a grand total of $29,880. Of course, this process does not generate any income for us, although we wish it did! On the other hand, making a SPY investment, assuming 8% APY, can turn that $83 per month into income, which in 30 years would reach $116,909 in profit. Isn’t that amazing?
Enrique managed to change many personal paradigms and, at the end of his presentation, the moment that everyone was waiting for arrived. It was time to talk about the wave in the pond that propels financial success: investments.
When money realizes it’s in good hands, it wants to stay and multiply in those hands. For this reason, Michel mentioned icons such as Benjamin Graham, Warren Buffet, and Jack Bogle. These investors restructure the analysis and decision-making regarding putting money in financial schemes and show the value of owning a percentage of dynamic companies.; These ideas are not new in global finances but they have been minimized in the growing universe of volatile businesses such as day trading and crypto. These financial giants have one piece of advice in common for the retail investor: consistently invest in index funds with a long-term vision, without worrying about whether it loses or gains value in the short term, because over the long term it will gain.
In this advice, two essential truths are emphasized that we all must recognize to better manage our investments: the market is always growing, and the returns are anything but average.
The financial education workshop showed many important concepts, including asset classes and allocation, in which you can choose a defensive (cash, bonds) or growth (stocks, real estate, raw materials) approach. The idea is to not put all your eggs in one basket, but to develop a strategy that combines both.
Michel stressed that these concepts may seem unattractive to some, but using our money as a source of adrenaline when investing in super speculative and risky assets such as bitcoin or active mutual funds is like skydiving without a parachute. It may be fun at first, but you’ll end up crashing.
Many of our team were amazed by and asked questions about schemes to be careful with, such as hedge funds, which are actively managed funds that sell and buy all the time, with high expense ratios and that underperformed the S&P 500 consistently for decades, despite promising gold and moro. Day trading, another volatile type of investment in which many have lost money, was also discussed.
We also talked about one of the hottest topics of the century, crypto. The old saying, “Never test the waters with both feet,” applies very well in this case. In the workshop, we saw clear evidence that, compared to other forms of investment, crypto is highly volatile and, therefore, we must be careful, and refrain from investing large amounts of money in a fluctuating currency. Cesar, a web developer, asked, “You mean to say that investing in crypto is bad? How should I view the matter?” Enrique replied that crypto is not bad in itself, but it is at a very early stage, and his recommendation would be to invest only up to 3%.
In summary, Enrique reminded participants of the Big Nos and the Big Yeses. The Big Nos were:
The Big Yeses were:
But the most important piece of advice was trying to be better at work. Why? Because not only our work, but the way we work defines us. Anyone who understands that work is not something to get money for the family, but a family in itself, and the essence of life, can really achieve much more than you imagine.
Finances are definitely a very important part of our life, so much so that by handling them correctly, we can retire with peace of mind and without missing anything. Congratulations to the entire BEON team, to our workshop leader Enrique, and to Michel for helping us continue to grow!