Target audiences:
If you are among those middle class suckers who are satisfied with 9-6 "safe jobs" don't waste your time reading this blog. This is not for you. Go away right now!!! This is for people who have nerve to do something different...people who dare to dream...
Thought Process:
Some years back I was reading a book that changed my outlook towards finances completely. It taught me about "Financial Independence". Most of us are caught in a rat race. Get a job..take a loan of 30 lacs or so...buy a house...and keep paying EMI of 30k for twenty years...Get married..need a car...crib for salary hike....changed job for higher salary...bought a car...start paying car EMI...have kids...more expenses...crib again...job changed...kids school..crib again...job changed...kids college...crib again...job changed...retired paying loans...no money left...die peacefully n penniless or at the most being a middle class insect :) isn't it true for most of us who belong to middle/poor class families?
Is there a way out of this rat race? Is there a way I don't have to worry @ finances when I am older? Can I be "Financially Independent"?
In search of answers two terms coined:
Asset: Something that brings money to my pocket .
Liability: Something that takes money out of my pocket.
[Asset-Liability] is measure of one's financial independence.The higher the difference the more financially independent person is. One should never let Liability take over Asset. As soon as Liabilities exceeds Assets a new rat is put into rat race.
Like I took a house loan of 27 lacs resulting into 27k EMI...my monthly liability:27k.If my monthly expenses are 15k,my total monthly liability will be [27+15]=42k .Say my salary is 50k(by d way i earn a lot more than that ha ha) so this is my Asset. What's my net financial independence:[(Asset)50-(Liabilities)42]=8k per month. To increase this difference I rented out my new house for 11k.Even though ppl were attaching lot of emotions saying how can u rent new house? I ignored such emotions because finances don't run on emotions. I would rather save my emotions for my future wife :) So the gap increased to [11+8]=19k per month. This is the amount which I can use to enjoy luxuries in life. Bigger the amount more will be luxuries in my life....Good enough for now :) but not enough for future. So what do i do? crib and change my job like all other rats? will it solve the problem or will it put me into rat race? will it be long term vision or short term sight? Then what is longer,deeper and persistent vision? Somehow i need to generate a mechanism that will keep nourishing my Assets so that it keeps growing at a faster pace than my Liabilities and I have to chain down my Liabilities so that they don't grow faster.The more difference I can create wealthier I will be.
What do rich people do differently? Do they earn money for themselves or do they make money,people, resources earn money for them? Does Steve Jobs[Apple CEO- am big fan of him] keep writting software programme to generate money? If he were, would he be THE Steve Jobs or would he be JUST Steve Jobs?
Pointer:
Everyone has 24 hours in a day.Poor or average people earn for themselves while rich people makes a system so that system generates money for them so that they can enjoy luxuries in life....
So key to financial independence is to "Build Assets"-something that brings money to my pocket and keep feeding them. Assets can be investments in fixed deposits,mutual funds,high return bonds or a self made system that generates money.
My Dream:
I want to be financially independent by the time I am 40 so that I can take long vacations go to different parts of the world with my partner and experience different shades of life.Doesn't mean I will stop enjoying life today...life is a precious gift and each moment should be lived to the fullest...live as if it is the last moment of life...its just that gradually and consistently I will keep building my Assets too...I don't want to be that stupid rat and keep working till my 60s and in that process I don't experience better things in life.I want to build a system...put right people and right process into it. Building a system is always painful...Entrepreneurs are not made easy are they? But once system is build it will start generating money for me and I will be enjoying beaches in SanDiego or in Australia :)
I do hv some plans in my mind of what I want to build...waiting for some of the things to happen in life...once those things are done I will be on my way to be financially independent. Want to join me in this journey or do u want to keep continue in dat non sense rat race? oh come on u middle class mind :) come wid me or if you cant then join my system and generate money for me :) i will make a system where I will be providing a race track for some of the rats...wanna run...track is all free for you......till then.....
Sayonara,
Abhay Shukla
