Carlos Galán: «Being rich is also never having to work again, I have achieved it»

"What do you have to do to be rich?"

—In the book I analyze it from the title, because I think that's where the key lies. The first point is to think, we have to use our minds before acting to know where we can add that value. There is no magic formula, you will get rich because you add value to other people. It can be in many ways: setting up a business, giving personal service, with art, with knowledge, even with entertainment. Now with social networks we see that there are people who are getting rich, and a priori, in the eyes of those of us who all this sounds a bit Chinese, it seems that they are not contributing anything, but yes, they are entertaining people. Second step: do. It is worth nothing to read, read and train, if we do nothing. And third, what does rich mean? There are people who are misled by the title and think that it is only about money, and it is not. The concept of wealth is much broader.

-What are you talking about?

—Economic wealth has already been replaced. Nowadays, it is no longer about having or earning a lot of money, but about being more financially free. Actually, the principles of the book are focused on making the reader rich in a broad sense, of course, economically, but also at the level of relationships, intellectual, health, even spiritual...

What does it mean to achieve financial freedom?

—It consists in the fact that you are the owner of your time, you have enough passive income to cover your expenses, your lifestyle. An example, if a person has monthly expenses of 2,000 euros, if he works, in the end what he is doing is selling his time, in exchange he gets some income and covers his lifestyle. Financial freedom consists of decoupling income from time spent. In my case, I wrote some books that give me passive income, they are sold while I sleep regardless of whether I spend time or not. The clearest example is having rented flats or dividends from shares of companies, whether they are listed or not. There are many sources of passive income. The moment you've accumulated a few, you can quit your job because you no longer need it.

"Have you achieved financial freedom?"

-Yes. You are no longer working for a living, you no longer need to exchange your time for money. This concept was introduced by Robert Kiyosaki, author of Rich Dad Poor Dad, which is the other great worldwide bestseller on financial freedom. He calls it "escaping the rat race." For him, what we are doing if we get into today's society is the following: I have some expenses, I am going to change my time for money, at the end of the month I collect the money, I spend it again... and every time we run more, because as our income rises, we raise our expenses. We are at the same point, running faster and faster, like a hamster on a wheel.

-Going out is forbidden?

—Yes, you have to get sources of passive income through two ways: one, by investing in dividends or even in businesses that give you an income without you being present; and the other, creating them from scratch with your head, for example, writing a book, setting up a YouTube channel, an online course...

—You say that having a stable job and a savings account does not guarantee the future.

-That is. Obviously, better to have than not, but we have been realizing for a decade or so that jobs, even permanent ones, can cease to be permanent at any moment. To the extent that your economy depends on the decisions of others, it is not a very safe thing, and for me it is not smart to have only this source of income, it is convenient to diversify them. When we talk about financial freedom, we run the risk of thinking that this is black or white, all or nothing. To continue with the example, either I get that 2,000 euros of passive income or I have failed, and it is not like that. I explain to my students how to build real estate assets to live on income, and there really is an important change as you have a part of your income covered. Even if you have 50%, that already gives you peace of mind, you go to work in another way, knowing that you have a safety net. If this goes down, I'm not left with zero. This is not just about money, but about generating more confidence to live things differently. As for savings, it depends on where you have them. The savings have to work for you.

-How?

—If you only have one piece of money in the bank, you are doing something unwise, because that money could give you more peace of mind if it were well invested and generating a return.

"But people are reluctant to invest, aren't they?"

—Indeed, many people view investment with disfavor because there have been bad experiences with preferentials, with Nueva Rumasa bonds... But this should not serve as an excuse for us to do something with our money. It is true that in the last decade we have had very low inflation, and money did not lose value in the bank; now, we are beginning to see that inflation is beginning to be strong and we see that many people are not going to allow having money in the bank standing still. If you invest intelligently, diversified, with a focus on the long term, history is on our side. The stock market, whether we like it or not, is one of the most profitable assets in the world.

—Where do you start investing and with how much?

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—It is not so important to start with a high capital, it makes more sense to start with little, but have the habit of putting a percentage of your income each month. 10-20% is ideal, although at first the amount is not important as much as the habit. As if you invest 10-20 euros per month. Where? It doesn't make sense to invest in shares or only in Spain, we live in a global world and I think that today you can invest in a very simple way through investment funds with very little money, something that would be unfeasible with shares. Getting more technical, I recommend the index funds, the competition of the banks, the white label.

-What do you think of cryptocurrencies?

—I don't invest in them, I'm not going to speak badly either, because I don't like to give my opinion without having criteria. To me personally, what sounds like getting rich quickly and without risk throws me back. The problem I see is that they do not generate cash flow. Just as the stock market or real estate have a value to the extent that they generate benefits; I don't get into cryptocurrencies, currencies or precious metals because I don't know if I'm buying right or wrong. It is an act of faith, you are buying that because we have agreed that it is worth money, but I don't quite understand it.

—We are seeing it, the pension is not synonymous with retiring without problems. What do you propose?

“First, calm down. There will be pensions. In 2005 we had a very good situation, a lot of employment, population growth, and this supported pensions. That has changed, now we have more and more pensioners for each contributor, and also people live longer, and inevitably it means that contributors have to contribute more, work more years, and the pension is less. But ten years from now it could be that the country will begin to grow strongly, there will be immigration again, the birth rate will grow and it will be resolved, but it seems that this is not the trend. What do I propose? Being more and more financially free in two ways: creating passive income to complement the pension, and on the other hand, creating assets. When the time comes, if you do it right, investing not much, one hundred or two hundred euros a month for a long time, you will find yourself with 300-500,000 euros without doing much.

—You say that this money destined to invest must be withdrawn as soon as the payroll is received.

-Indeed. Many times we have experienced it, 'at the end of the month with what I have left I save, I invest or do so' and in the end, the money tends to be spent, something always appears. That the first bill we pay is that of our future, and I propose that it be automatic.

"At what age should you start?"

—I started when I was 15 years old.

—To do it at that age, you have to have some restlessness.

-Undoubtedly. Whatever the age of the reader who reads us, that is the good one. In the book I say: 'The best day to start investing was yesterday, today is the second best day, tomorrow will be late'. I think that is the key.

"If you know everything about success and getting rich... how come you're not on the Forbes list?"

—I don't know everything, not at all, I'm financially free. For me the objective is not to have ten million euros and a private jet, I have a normal lifestyle and I am lucky that with what I have been creating I do not need to work.

“It's another way to be rich.

-That is.

© Copyright LA ​​VOZ DE GALICIA Sapolígono de Sabón, Arteixo, A CORUÑA (SPAIN) Registered in the Mercantile Registry of A Coruña in Volume 2438 of the Archive, General Section, on pages 91 and following, sheet C-2141. CIF: A-15000649.