In a country where social security coverage reaches only 24.5% of the population, according to a report from the International Labour Organization (ILO), building a retirement plan without relying exclusively on the Social Security Institute (IPS) has become a necessity for many Paraguayans. Financial analyst Augusto Fabrini warns that relying solely on the state pension system, which has a model focused on subsistence and not on wealth accumulation, limits a citizen's financial capacity during retirement and ends with the holder's death.
Fabrini proposes a four-pillar method to structure a budget, even for those earning the legal minimum wage of G. 3,044,000, in effect since July of this year after an adjustment determined by the government of Santiago Peña. The strategy consists of allocating 20% of income (G. 608,800) to invest in assets that generate passive income, 10% (G. 304,400) to an emergency fund, 60% (G. 1,826,400) for essential living costs, and 10% (G. 304,400) for leisure expenses.
According to a simulation presented by the expert, consistently investing 20% of the minimum wage with an assumed annual return of 9% can generate significant results in the long term. In 20 years, the accumulated assets would allow for a monthly passive income of G. 3,054,075, equivalent to a full minimum wage. In 30 years, the monthly passive income could reach G. 8,359,905. Fabrini emphasizes the concept of financial freedom, popularized by Robert Kiyosaki in the book "Rich Dad Poor Dad," where earnings no longer depend exclusively on work.
To get started in the local market, the analyst recommends instruments such as Savings Deposit Certificates (known as CDAs in Paraguay) and debt securities traded on the Asunción Stock Exchange (BVA), which have accessible entry amounts. As capital grows, he suggests international diversification through stocks or index funds in strong currencies, such as the US dollar, to protect assets from local economic fluctuations. The main advantage, according to him, is that privately owned financial assets can be passed on through inheritance, ensuring that wealth remains within the family.