Hi all.Welcome to hereishealth.com or Here is Health. Here you will find everything from Naturopathy to Yoga,from Good habits to Bad habits,from how being successful to why u r failing.Literally everything you are searching for.And one of my favourite topics will also be there:ATTAINING FINANCIAL FREEDOM.
What for a person is working.Securing his finances and thereby his future. And working on a 9 to 5 job wont in any case make you financial freedom. You have to generate a second income,a passive one. You should start investing a portion of your salary from the first month itself,because earlier the better.Rule for investing:at least 25% of your income should go straight into investing for a long term,with a time horizon of at least 20 years,because a person generally starts his job at 25 and investing with a time horizon of 20 years means his investment will mature at 45, the time he will be requiring the money for his childrens higher education and after that for their marriage.
Person should increase his investing amount by at least 10% every year to give a compounding effect to the investment.
25% should be used for emi for car and house.And if a person already has a car and a house,this amount should also be invested.
Rest 50% should be used for meeting monthly recurring expenses.
And if possible try to get a new house for yourself.You only have to arrange for the margin money. Rest you can arrange from banking loans.And the EMI of the loans can be paid out of the rent you will be getting out of your new house.
Small steps lead to Small savings,and compounded it reach exponentially high.