Most of us spend our whole life to earn money. For this money, we do one thing day and night and we ignore our life. We do not choose this. Well, just think, you work hard, you earn money, you work for whom? You want happiness in life. You want to spend time with your family. If I say in short, then if there is more important than money, then it is freedom. What does freedom mean? Well, the English have gone, we are free. The answer is no. Freedom means that we can do whatever we want when we want.
If we have to spend time with our family or goon a vacation, then we don’t have to do anything. You should have both time and money to do what you like and that should be your goal. So now if you have made this goal, then this blog is very useful for you because now I am going to give you practical steps on how you will plan your financial freedom.
Well, a new year is coming and we take a resolution on the new year. We take a resolution that the way I was living in life and if you don’t like anything in life, you can say that you don’t like your whole life, then whatever new work you are going to do to change it, we will call it a new year resolution.
So now I will start from here. Now you see here, I have plotted a graph. You don’t just have to see this graph. Her ewe are going to do a practical experiment, which will make your mind go in a different direction. You also have to bring paper, whether you want to pause this blog or you can do it. You have to plot the same graph on a paper for yourself.
So you have to put that paper where you spend most of your time, whether it is your office or your home, wherever you spend time, whether in your bedroom or in your bedroom, you have to stick the paper where you plot the graph. So here you are seeing two things. First of all, what are you seeing? You are seeing money on the Y-axis, 10,000, 20,000, 30,000, 40,000, 50,000. So now you can change the proportion according to yourself and here you are seeing months October, November, December, January, February, March. I have taken time.
So you are seeing time on the X-axis. Here you are seeing 40,000. Now what you have to do is, let me tell you what you are required to do. So whatever is your monthly income, let’s assume that your income is 40,000 rupees per month. So you have to see, October has passed, so you take a little time here and check that how much income did you earn in October. So whatever money you earned, you earned from salary, you earned from business, so let’s assume that you earned 40,000 rupees in October.
Now you will simply put a dot on 40,000. In November, you took little vacation or whatever happened, so you earned 35,000 rupees, you will puta dot. In December, you may have done a little additional work, freelanced and whatever, or your business went a little better, you earned 50,000 rupees, so you will put a dot here. Most people have a stagnant income according to every month because most people are on salary, so your monthly dots will come, they will come near about, according to every month, you will get dots in this way. So now what you have to do is, you have to connect these dots. Here you will find out how much money you are earning every month.
As you did this, you have a line and thesis your income line. So what it is, it is your income. Now in front of you, your income is visible in front of your eyes. Now you use another pen for yourself. Here I change the color of the pen. So we take a different color.
We have multiple color options. Now we take another color here. Now what you have to do is, you have to see your expenses, how much you were spending every month. So in the last three months, the expenses you have done month-wise, I hope you know, most people do not know how much they spend, so you have to calculate that. So it is possible that you see that in October you earned 40,000but your expense was 30,000.
In November, it may be that you spent 25,000. In December, your income was more, so you spent more and similarly, whatever you spend every month, you will go in the future. You can plot a line from it. So if your expenses, some months are like this, that more than the income, more expenses are spent. Saving is used, so that month may be that your expenses will be very much. So in this way, you will plot the expenses and you will get to know how much you are spending.
I have taken a line below here. Ultimately, it does not happen with anyone that some months of his expenses are very less. Expenses remain, income goes up and down in fact, but these are practical things that I am sharing with you. So you will make a line here, from which you will find out where your expenses are actually going with time. You will get to know. So you will get a line in the coming time. Now this line is the line of your expenses. How much did you spend? Now as most people will see that their expenses are increasing, definitely you will reduce those expenses.
That is why I took an example here that your expenses will be less in some month, but after that, expenses did not increase. You have to seethes. Expenses should always be less than your income, but there will be many people whose lines will be like this. The line of expenses will be running along with the income that the money you are earning is the same amount that is being spent. If this happens with anyone, then do comment below. This is a very important thing that I am sharing because now let’s come to how you will be financially free. Definitely you will reduce the expenses. We will talk about increasing the income, but now you have to understand one thing here. Let’s take another color.
So let’s take this color. Now you have to understand one more thing. You will have income; you will have expenses. Most of the people earn active income, that is, they work by themselves and get money, but people do not pay attention to passive income. Now what is passive income? For which income we do not have to work. For example, you have bought a property and you have put it on rent. So you are not doing any work for the rent that is coming. So what income is that? That is passive income.
You have invested in stocks and you get dividends. So if you get dividends, then what income is that? That is your passive income. You have written a book, you get its royalty, so what happened? That is your passive income. You have a YouTube channel through which you get money through ads. So what happened? Your passive income happened. People do not think about passive income. You have a business in which you are not very involved, but your business is running and if you are getting money from it, then that is your passive income.
Now I am going to talk a little more about it. So now you have to see if your passive income is there in this chart. Most people, it can happen with people that they do not have passive income. So they see that our passive income was not there in the chart, but as soon as they see, we do not have passive income. See, the thing you pay attention to, that thing increases. So if you pay attention to passive income, then it will come to you from somewhere today or tomorrow. i am telling you today. So it may be that you do not have passive income in the starting, but you started working, your passive income of 10,000 increased. Then in December, your income increased. In January, it increased in February.
Now when such a point will come, when your passive income will cross your expense, then here this line should be yours in this way. I will agree, but it is not necessary that it happens in 5-6 months. It could take more time, but should be exponential that your passive income should increase. So in your graph, you have to see passive income. My job is to tell you that the day you get this breakout, that your passive income is above your expense, that day you will understand that after this point, you have left for financial freedom. Now you are financially free. You will be financially free that day, the day you will be getting more passive income and your expenses will be less.
I have given you this demonstration practically today because these things should run in your mind. Now whatever expenses you are doing every month, you plot them. No one plots on the graph. Who has so much time, but whoever is financially free, he will have to take out time. What is your income, plot it on the graph and how much passive income you are getting, plot it on the graph? You will get to know where you stand now. It is very important.
Now see, we talk about building passive income, we talk about building net worth, but what do people do? People do not calculate their per hour cost. What is this? If you have read a book, Rich Dad Poor Dad, then there is an ESBI model explained in it. Now what is this ESBI model? Here E for employees, S for self-employed, B for employees, C for B for business, I for investors, so Robert Kiyosaki says that90% of the people in the world, now when he must have taken the data, I think it will be much higher than 90, so according to him, I tell you that 90% of the people are either doing a job or they are self-employed and only 10% of the people are doing business and are investors.
More than 98% of the people in India are employed or self-employed. You will say, Sir, what are you talking about? People are unemployed in India, so they do not stand anywhere. So here are they employed or self-employed? If they are getting income from the job or say they are getting active income, then they come in the category of90% people and the people who are doing business and the people who are investors are only10%, but what they told is amazing that 90% of the people in the world have only10% money and 10% of the people in the world have 90% of the money. Now if you want to come in this category, then either you have to start a business.
Now many people will say that not everyone can do business. Not everyone is made for business. Some people also say that if everyone starts doing business, then who will do the job. See, I believe this thing. This is the truth that everyone has a different temperament. See, not everyone wants to do business, but you have to come in this category. So if you don’t want to do business or you don’t feel like it or you feel that I am not made for business, then it may be so, but if you come in the category of investors, then what do investors do? Investors invest their money in business and when the businessman gets money, then he starts making investments.
He comes in the category of investors, so this cycle continues. What does it mean to invest in business? You cannot do business, but if I tell you that you can invest in business, you will say how? I will give you an example. You think that Reliance is a very good company and Reliance will grow in the future or you think that Tata Motors is a very good company and will grow in the future. So if you cannot do business yourself, then can you investing this business? You will say that I can buy shares of Tata Motors or I can buy shares of Reliance. If you have made an investment, then what will bathe benefit?
You will feel that if the share price increases, then it is beneficial, but if the business earns profit, then the shares you own, you get dividends from them. I told you that dividends can be passive income for you. Now there are many people who do not know how to do research on stocks. How do we assume that we have to invest in Reliance or invest in Tata Motors? I say that you believe in India. You will say that yes; I believe in India. I say that do you think that India’s economy will grow or decrease? You will say that the economy will flourish. India is a developing country. So I will tell you one thing, if you do not know where you have to invest, let me tell you the best way.
See, if you do not invest yourself, directly investing in stocks, some people think that it can be risky. Directly stock investment, people think it can be risky. So you can dot indirectly. What does indirectly mean? You can invest in index funds. Now what are these index funds? If you have heard the name Nifty 50, then Nifty 50 is a list of India’s top 50companies listed on Noseband has an index. How do you know that the market is going up or down? You simply look at Nifty 50. If Nifty 50 is increased, then you know that the market is going up. Similarly, Sensex, the top 30 companies listed on BSE come in Sensex.
So what you can do is you simply invest in index funds. Funds where you are investing 100rupees. You invest 100rupees monthly. I don’t talk much. 100, 200, 500 rupees, you can invest anything monthly. It is a good habit if you start investing and you have put 100rupees in Nifty 50. So what does it mean? The companies coming in Nifty 50, the weightage of 50 companies, for example, there is Reliance. Let’s assume that there is 15%weightage.
For example, there is HDFC Bank, which is one of the top 50 companies in India. So in the proportioning Nifty 50, the proportion of that money will be invested according to 100 rupees and when it starts investing per month, what will happen? When you start investing per month, then we call it SIP, Systematic Investment Planning.
Now what can happen with SIP? I have told you before that if you go on the net, simply write SIP calculator. You see100 rupees, you say that I can do monthly investment or I Cando 100 rupees daily investment.100 rupees daily means 3000 rupees per month. So if you invest3000 rupees per month, then how much are you doing in a year, you are investing 36000 rupees. But if you invest it for 20 years or 30 years, then in 30 years you will see that this money will increases much that you will see how compounded growth is obtained. So this is a way for you. You are not only earning according to time, but your earnings are increasing in a passive way.
So the graph you saw here, we talked about exponentially that your investment can increase exponentially. So here you see it in reality in compounding. So now if you want to invest in index funds, so what is the way, let me tell you what is the way, very simple way you have. Look here, I have also invested myself, that’s why I am recommending you. Now we have come to the Finite app.
So in Finite, let’s start from the home screen here. As soon as you click on home, you will see here first. Passive index funds, you will click on passive index funds, the index fund I was talking about. So if you want to invest in Nifty Backers, you will simply click here. You will see here that HDFC fund is here, UTI is here, SBI is here. So which fund do you want to invest in? For example, you say that I want to invest in Nifty 50 and I want to take HDFC plan. Shock index fund Nifty 50 plan, which is the direct plan, you click here. You have to see the returns here, according to 17.15%, it has given returns. There is data of the last5 years. Now if you want to invest here, you will simply click on invest.
You can decide here. Let’s say you say that I will invest 500 rupees a month or I will start SIP of5000 rupees a month. Assume that you are not doing SIP for yourself. You are doing it for your future generations, for your children. Because when you assume this, then you will invest in the long term and in the long term, your wealth is made. Here you will see that after 10 years, the money you have added here, here your money will be 15 lakhs or 20 lakhs, whatever the amount is, it will be seen here. You will simply click on continue.
You can check here that on which date of the month this money should be deducted from your account. Let’s say you say that my salary comes on 5th and on 10th, this amount will be deducted from my account every month. If you decide it here, you will click on continue. Your SIP will start. Similarly, I have also planned some SIPs for myself. I had also shown you that if you go to my portfolio, you can see that I have received returns of 15,000. My existing SIPs are of 75,000. So here, first, it is deducted on 1st, on 10th, I have done2 SIPs in a row. So what is happening with this, see here if you see, then the investment that I have done is 3,74,000 and here my current value is 3,90, 000.
Now I have started getting returns. Now I can withdraw it, I can withdraw money anytime, but I have left it. Why have left it? I am assuming that for the long term, I should benefit. This is a long term investment. When you plan a long term investment, then only you will become rich. I was telling you this in short. Now the concept here, that concept was left to be understood that you have to calculate your per hour cost. Now what does this per hour cost mean? Most people never think like this, but today I want you to think about it. See, you go to Starbucks and drink coffee today.
That coffee is of 300 or 500 rupees. You have spent 500 rupees on it, but if you think that your salary is 30,000 or 35,000rupees per month and you calculate that what I get for a day, we were taking the example of 30,000, according to30 days, just for example, that you get 1000 rupees per day and you work for 10 hours away, then you get money according to 100 rupees per hour.
You have invested 100 rupees per hour, but you have not seen that when you left your house before office, you are going to office from home, you are spending 1-2 hours, you are spending time while leaving, so that will also be included in this, but anyway I am assuming for round off that you have earned money according to 100 rupees per hour. Now calculate your income here, how much are you earning per hour.
People think according tithe month, never think according to the hour, but if you have given 500 rupees to Starbucks, you have also taken coffee, then you think that in return for that coffee, how many hours will you have to spend on your work, 5 hours, if someone tells you to do overtime for 5 hours and says that in return I will give you Starbucks coffee, then what will you take, if you think that will not take it, you will get angry, then you think what are you doing,
if someone says that do extra work for me for 5 hours and I will give you movie ticket for PBR, then is it acceptable for you, you will say no, if you think no, then when you buy inexpensive watch, buy an expensive shirt, which was not necessary for you, but you bought it, then you think that you have taken a watch for 10,000, but in return you have to work for 5 hours, do you agree, if you do not agree, then you will not acceptable, then what are you doing.
When you calculate this per hour cost, then the second thing we have to do is we have to increase our income and to increase it, say no. your time. People mostly here you see I have written that earn with your mind not with earn money according to the time. They will earn money according to the number of hours they will give. But I tell you that rich people do not work according to this. Either they have such a business that the whole team is working under them and they are getting passive income. Think about the second thing. Let’s take an example.
Mukesh Ambani ji, he leaves all his business and he starts living next to you. Let’s say he has lost anything, the company is closed, whatever happened, but now he has started living in your neighborhood. You are also working hard; he is also working hard. What do you think in the next two years, how much growth will you have and how much growth will he have? It will come out of your head that man will go far ahead. Why will it come out? Because he will not earn money according to the time, he will earn money according to his mind. People train their mind that we do such a work that we get money.
Now to train that mind, you have to learn new skills. Now you know how people learn. People have stopped learning. When we complete our college education, people do not learn after that. They are coming home from office and they watch Netflix and the Kapil Sharma Show to learn. Well, I know you guys like it a lot. I am not talking about Netflix. I am talking about Kapil Sharma Show. Although you can take out some time for your entertainment, but the thingies, if you are not investing time to learn, then what are you doing?
You have to take this resolution and to train your mind, whatever you are going to do, write it in the comments today. What are you going to do to improve your skills, so that your income increases? See, the office where you work, let’s say you earn 50,000, someone may earn lakh in your office, someone may earn 2 lakhs, so in that office, let’s say in a multinational company, someone earns10 lakhs, so he is giving the same time, but he is earning money according to his mind. It means that you have also done MBA, he has also done MBA, but you will say that the experience is different.
I will say that the expertise is different. Skills, what do you know, see how much value you will give, you will earn money according to that, so to increase that value, you train your mind and the second thing, the graph you plotted today, we talked about passive investment, we talked about how you will start building your passive income and it will go above the expenses, you will become rich. For that, you have to start investing from today.
See, take a resolution on New Year this year that instead of a beer bottle, I don’t know how much a beer bottle costs, but it may cost 500rupees, so that 500 rupees that I was going to waste in something, I start an SIP for myself for 500 rupees. It may not be a big thing for you for 500 rupees, but what will happen with that SIP, you will get a good habit. You will feel proud from inside that you have started a good work.