Financial Freedom for Salaried People

For salary-earners, getting even a mild form of financial freedom early in life is more important now than it was a decade or two ago. If a person achieves some degree of financial independence by 40, then it is a great thing to achieve. In this post let’s learn a few basics to achieve financial freedom.

1. Do not spend more than 60% of your salary in a month.

2. Save 40% and invest in at least 3 different places. Be it Mutual funds, PPF, Stocks, Gold, NPS etc as per your risk profile and time horizon.

3. Constantly thrive for 2nd source of income. Don't count on spouse income as 2nd source, rather consider that as an emergency fund.

4. Must have health insurance for your family and term insurance until you have enough for dependents to rely upon.

5. Do not try to match up your lifestyle with others. Instead, try to match up with their hard work.

6. If you are taking a loan, buy assets with it, not liabilities.

Assets:- Education loan, Loan for low-risk business with regular cash flow, House loan only if the EMI is equal to or slightly more than the rent you were paying.

Liabilities:- Loan for expensive flat, Buying an expensive car, High-end vacations, Mobile and other electronic gadgets etc.

7. Never rely on your Parent's money coz they are not relying on yours.

8. Ways to decrease expenses :-

-Control your fingers on food delivery apps.

-Avoid unnecessary shopping in malls or via online apps.

-Take the metro, or auto instead of a Cab whenever possible.

Online payment apps and credit cards are built to force you to make decisions that you don't require most of the time.

9. Don't fall into the trap- Zindagi ek mili hai, khul ke jio aur udao

Coz most of those activities can be momentary pleasures but not life fulfilling experiences.

And finally, remember fun and family comes with finance and for that a good financial advisor is a must to have it.