How I would invest if I were one of the five winners of Mega da Virada – 01/01/2024 – De Grão em Grão

It’s no secret, I didn’t win. I played with a group of friends. Each person contributed R$35 and we played a game of 10 tens. Do you know how many tens we got right? I’ll tell you at the end of the text, but first let’s get to what matters. What would I invest in if I had been one of the five winners?

Unlike me, we know that four of the five winners played a simple game of 6 tens. This is evidence that they did not play collective games, that is, they won alone. Normally, people get together in groups to play more games, as the cost is higher.

Therefore, these four individuals should have access to a fortune of R$117.8 million within 90 days.

This amount is enough for anyone to no longer need to work and enjoy life as they wish.

However, don’t be fooled. Even this fortune is finite. This means that if you don’t know how to use it, it ends.

According to the Lottery ‘n go portal, which publishes lottery statistics around the world, 90% of winners end up returning to their pre-win standard of living and 44% spend all their money within 5 years.

Knowing how to invest and, above all, maintain a fortune is almost as difficult as earning it.

Even though it is a high value, you need to impose a series of limits on yourself. These limits are related to the income that the assets produce.

Obviously you will be able to live in a better property and have a more comfortable standard of living. However, you have to control your budget in a similar way to what you should do when earning your salary. The difference is the volume of income for this calculation.

This income can be estimated based on the interest rate, net of income tax, on federal public bonds referenced to the IPCA. Today, the interest rate on the longest public bond, that is, the one maturing in 2060, is at IPCA+5.48% per year.

This is equivalent to a net monthly income of 0.33%, that is, equivalent to an income of R$393.3 thousand per month. Yes, this is your new monthly salary. Your entire budget must be calculated based on this monthly “salary”. But, let’s stop talking about expenses and deal with the wallet.

For 35% of the portfolio, I would invest it exactly in this title. Remember, you will not be able to buy it at Tesouro Direto. This platform is expensive for the assets you have and has an investment limitation of R$1 million per month.

Still in fixed income, I would invest another 35% in corporate private credit securities exempt from IR, such as debentures, CRAs and CRIs. I would create a portfolio with at least 60 issuers with a good risk rating and long-term maturity ratings. Thus, no issuer would represent more than 1% of the total portfolio. With these bonds, at this moment, I hope to lock in interest rates above IPCA+6% per year exempt from income tax.

To close the fixed income portion, I would keep 5% in liquidity investments such as DI funds that would be used for various investment opportunities that always arise.

In the risk portion, I would divide 25% into a portfolio of real estate funds, shares, equity funds (FIAs) and investment funds. Private Equity (FOOT).

Real estate funds would provide an average annual return of IPCA+8% and a monthly income exempt from IR of close to 0.7%.

As for the portfolio of shares, FIAs and PE, I expect a monthly return equivalent to 0.25% exempt from IR on dividends, but with a potential for capital gains coming from investment funds. Private Equity.

Active	Percentage in portfolio	Expected monthly net income from IR	Monthly income
NTN-B 2060 (IPCA Treasury)	35%	0.33%	R$ 136,059.00
Private credit portfolio	35%	0.50%	R$ 206,150.00
DI Funds	5%	0.22%	R$ 12,958.00
Real Estate Fund Portfolio	10%	0.70%	R$ 82,460.00
Portfolio of shares, FIAs and PE	15%	0.25%	BRL 44,175.00
Total	100%		R$ 481,802.00

The table above presents the monthly net return this portfolio would produce.

Note that the monthly amount that you would potentially have net of income tax is higher than what I mentioned previously. The value of R$393.3 thousand is the base value for defining the budget.

With this portfolio, you would have an equivalent monthly net IR income of R$481.8 thousand. However, this portfolio has risky assets, so the monthly value may vary. Therefore, it is important to consider a more conservative basis for defining the monthly spending level.

I emphasize that each person will have a risk profile and can adopt a different portfolio. This would be the one I would ride, considering my profile.

It is important to remember that the amount invested and the income profile makes a difference. My current portfolio is not distributed in this way, as the objective for me now is not to obtain income, but to have capital gains.

Now comment here what you would do differently with your portfolio.

Before you ask me, yes, I would continue working and living in the same place, that is, paying rent.

However, you would certainly no longer see me strolling on weekends on Avenida Paulista, as I would be strolling around the world on Saturdays and Sundays.

Answering the question in the first paragraph, we only get one ten right with a game of 10 tens. As I wrote previously, it is more likely to accumulate the prize by investing than playing.

Invitation for me to analyze your financial challenges:

I would like to take this opportunity to draw your attention to this week’s article in the I Comment Your Money column. In this new column, I comment and clarify readers’ financial challenges. If you wish, I can comment on your question. To send your question, you can write an email to me describing the problem and putting in the title: Comment my money.

Michael Viriato is an investment advisor and founding partner of Investor’s House.

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