Introduction: The Journey From Struggling to Building Wealth
Getting out of debt is already a huge challenge on its own. It takes organization, discipline, and often, some sacrifices. But there’s a second obstacle that no one really talks about: how do you get from being financially squeezed to actually starting to invest?
This transition, though it might sound simple, is one of the trickiest parts of financial life. It involves a complete shift in mindset. While paying off debt is about survival, investing is about building wealth. And to make this switch successfully, you need more than just willpower — you need a solid method, strategy, and clarity.
If you’re at this stage — tired of paying bills but unsure how to start investing — this article is for you. We’re going to walk you through a practical, humanized, and doable step-by-step guide to help you get out of the tight spot and start building a future of financial freedom.
Why Get Out of Debt Before You Start Investing?
Before we dive into the world of investing, let’s answer a crucial question: why is it not recommended to invest while you’re still in debt?
The answer is simple: debt interest rates are much higher than any return you’d get from a conservative investment.
Here’s a practical example:
- A CDB (Certificate of Deposit) that yields 110% of the CDI will give you an average of 1% per month.
- Meanwhile, credit card debt can charge up to 15% interest per month.
- This means that whatever you “earn” from investing gets easily wiped out by what you lose from keeping your debts open.
In other words, before making your money grow, you need to stop the leaks. Paying off debt is, often, the best “investment” you can make at the beginning of your financial journey.
Step 1: Understand Your Current Situation
You can’t change what you don’t know. So, the first step is to do a full diagnosis of your financial life.
List:
- All your monthly income
- All fixed and variable expenses
- All open debts, with amounts, deadlines, and interest rates
- The amount of money available in your account or cash
With this information, you’ll be able to calculate your monthly balance (income – expenses) and evaluate how much you can direct to debt repayment, and eventually, to investing.
Step 2: Organize and Renegotiate Your Debts
Now that you’ve done your financial check-up, it’s time to take control. Start with the most expensive debts, such as:
- Credit card debt
- Overdrafts
- Loans with high interest
These are the most destructive debts because they grow quickly due to compound interest. Here’s what you can do:
- Renegotiate with your bank or financial institution, seeking lower interest rates and better payment terms.
- Use platforms like Serasa Limpa Nome to settle debts with discounts.
- Swap expensive debts for cheaper alternatives (like payroll loans or secured loans).
Don’t hesitate to seek help from organizations like Procon or the Superindebted Support Center, which offer guidance on renegotiation and even legal support.
Step 3: Build a Mini Emergency Fund
Before you even think about investing, it’s essential to create a small emergency fund, even if you still have debts being paid off. This emergency fund will protect you from getting into more debt when the unexpected happens.
Start small:
- Aim to save R$500 to R$1,000, stored in a separate account with immediate liquidity.
This isn’t your final goal, but it serves as a cushion for minor emergencies like a flat tire, a doctor’s appointment, or a broken appliance.
Keep this money in investments like daily liquidity CDBs or Treasury Selic, which earn more than savings accounts and are safe.
Step 4: Shift Your Spending Mindset
This may be the most challenging step: changing your mindset. Investing isn’t just about putting money somewhere — it’s about adopting a new financial behavior.
Here are some key habits:
- Avoid emotional purchases
Learn to differentiate between “wants” and “needs.” A good rule is: wait 48 hours before buying anything non-essential. - Simplify your lifestyle
Many people increase their spending in proportion to their income. Don’t fall into the trap of an inflated lifestyle. - Reinvest your money
When you pay off a debt, don’t treat that money as “extra cash.” Put it toward a new goal: investing.
Step 5: Start Investing with Clear Goals
Investing without a goal is like driving without knowing your destination. Before you invest anything, ask yourself:
- Why am I investing? (emergency fund, retirement, house, travel, independence?)
- How soon will I need the money?
- What’s my risk tolerance?
These questions will help you define your investor profile: conservative, moderate, or aggressive. With that in mind, you can choose the right investment options.
Step 6: Choose the Right Investments for Beginners
If you’re just starting, prioritize simple, safe, and accessible investments. Here are some ideal options:
- Treasury Selic
Great for an emergency fund. It’s government-backed, liquid in D+1, and offers a return higher than savings. - CDBs with daily liquidity
A practical, safe option for starting small. Make sure the bank is trustworthy and the FGC covers it. - Fixed-income funds with zero fees
Some banks and brokers offer funds with low entry amounts and good returns.
❌ Avoid: Stocks, cryptocurrencies, and real estate funds at the beginning, especially if you’re still learning. These assets are more volatile and require more knowledge and emotional control.
Step 7: Automate and Track Your Progress
Discipline is what separates those who “want to invest” from those who actually build wealth. Automating your investments is a great way to stay consistent, even during busy months.
Here are some tips:
- Set up an automatic monthly PIX transfer to your investment broker.
- Create alerts to monitor your emergency fund and investments.
- Use simple spreadsheets or apps like Organizze, Minhas Economias, or your broker’s own platform.
Tracking your progress monthly helps keep you motivated. Even with small contributions, you’ll see growth — and this creates a positive cycle.
And Then? Keep Evolving Your Financial Education
Investing is a journey with no turning back. The more you learn, the more you realize that money can — and should — work for you. After taking these first steps, expand your knowledge:
- Read books like “Rich Dad Poor Dad,” “The Richest Man in Babylon,” and “From Zero to a Million.”
- Follow financial education channels on YouTube.
- Attend free financial events online or in person.
- Take short courses on Treasury Bonds.
Financial Transformation: A Journey, Not a Destination
Getting your financial life organized, getting out of debt, and starting to invest isn’t a one-time achievement. It’s an ongoing journey full of learning, adjustments, and conscious choices. There will be months when you have extra money in your budget, and others when you’ll barely keep up with the basics. But consistency, more than perfection, is what truly builds prosperity.
Don’t underestimate the power of small financial habits. Cutting unnecessary expenses, learning to say “no” to impulse buying, celebrating when you save R$50… It all seems small — until it doesn’t. When you commit to your financial health, you position yourself in the world with more autonomy, confidence, and freedom.
Investing isn’t just about putting money into a financial product. It’s about investing in yourself, your future, and what you value. And getting out of debt is an act of courage, of breaking cycles, of rewriting personal and family stories.
If you’ve made it this far, congratulations: you’ve already taken the hardest step. Now, keep going. And I’ll be here, at every stage, to help you along the way.