1/ Budgeting - The 1st ๐ to financial freedom โผ๏ธ
If you earn, you need to budget your money.
A budget is telling your money where to go instead of wondering where it went.
Budgeting your money is an investment in your future.
2/ Start budgeting your money. Have a plan about how to use the money you'll receive.
Don't think that your salary is less and you can't save. You can. You just have to find a way out.
The sooner you start Investing, the sonner you'll be a millionaire.
3/ So, the million dollar question - What's 50:30:20?
If you have just started your career, the 50:30:20 formula is the best one and the simplest to follow. ( Btw not only for starters, anyone can do it ๐ฏ)
4/ This is how you must allocate your money and make a budget ๐
50% - Needs (Rent/EMI, Food, bills, etc)
30% - Wants (Car, A trip, Electronics, etc)
20% - Save (Retirement, education, etc)
Invest ( Stocks, Real estate, gold)
5/ Let say : You earn $1000 a month
Allocate -
50% on Needs - $500
30% on Wants - $300
20% on Saving & Investing - $200
(Wants are also necessary. Everyone needs a trip. Enjoy your life, but also Investโผ๏ธ)
6/ The Bonus -
Now that you've understood how to budget your money. Let's understand how to increase your saving/Investing.
Specially for the people who are in their 20's/30's.
When you gain experience in your job, you'll also get increments (Salary hikes)
7/ But, What most people do is : when they get an increment, they increase their proportion of expenses in wants.
Don't do this โ
Instead, reverse the 50:30:20 Rule (For incremental amount)
8/ Let say : Now, You earn $1200 a month (After increment)
Incremental amount ($200) -
50% Invest - $100
30% Wants - $60
20% Needs - $40
Now, your total allocation will be -
Needs - $500 + $40 = $540
Wants - $300 + $60 = $360
Investment - $200 + $100 = $300
9/ You saw what I did here?
1๏ธโฃ You started with 50:30:20 Rule
2๏ธโฃ You gain experience, get increment
3๏ธโฃ You reverse 50:30:20 Rule on incremental amount
10/ Here's how the calculations work -
For $1000 - For $200 - (Hike)
50% - Needs 50% - Investing
30% - Wants 30% - Wants
20% - Investing 20% - Needs
11/ This method will only work in the long run.
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Start early
โ
Make a budget
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Keep on Investing for long term
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You'll find you've created a huge corpus (Capital)
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Then, retire early & enjoy your life ๐ค
So that was "How to get rich with 9-5!
I hope you found it useful.
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