Interview with AA40

A while ago, I started corresponding with JB of AA40, a blog in Brazil on becoming financially independent and retiring early. Also known as FIRE, the movement has lots of followers and a growing list of successful pundits.

JB asked me if I would be willing to do an interview with AA40, and after looking at the format of an earlier interview published on AA40, I agreed.

As an expat South African, there are similarities in the investing landscape in Brazil and South Africa that I recognize and appreciate. For example, interest rates are much higher than in the USA, so investing in the stock market instead of depositing your money in a bank is not so self-evident.

Of course, the real issue is how interest rates compare to the rate of inflation. If you earn interest on your investments below the rate of inflation, you're essentially "losing" money (or at least buying power) in the long-run.

In South Africa, the benchmark repo rate is 6.5% and according to this website, savings accounts can earn up to 6.95%, while 5-year fixed term deposits return as much as 12.95%. With a core inflation rate estimated at 4.5% for April 2018, it seems less obvious to be a stock market investor.

I'm not familiar with Brazil's situation, so I have to rely on Google with no local verification. The inflation rate is reported to be 2.86%, while the key Selic rate is pinned at 6.5%. Savings accounts earn up to 5.95%.

In comparison, the current US inflation rate is 2.5%, while savings accounts offer a measly 1.7% and 10-year CD's offer a paltry 3.4%.

To read my interview with AA40, please click on the following link. The interview is in Portuguese and English (scroll to the bottom of the blog page):

Thanks for reading and happy investing!