Recipe For Financial Freedom

This month was good from the expense point of view. I spent much less and saved a lot. However, I didn’t do any investments this month. Whatever growth you can see in the stocks and the mutual funds is the capital appreciation. I have started my emergency account as planned with a goal of Rs 30,000/- this year. One more thing that I want to point out this month is the interest on my Employee Provident Fund (EPF). I am not adding any interest on my EPF and a cumulative interest shall be added after I receive my EPF statement from my employer.

This month I thought that tracking my networth is one way to track my financials but it would be great if I track my expenses too. I have thought of a graph in percentage that I would call as a consumption wheel. I shall put my investments too in the consumption wheel (investments are equivalent to an expense to buy future). My goal would be to reduce my variable expenses. The other goal would be to increase the investments category.

Coming over to this month’s performance I would say it is a significant improvement. My networth grew by 7% almost twice that of the previous month’s growth. The assets also grew by 16.06%. This is a major improvement. I want to increase my asset base to such a level that it can finance my liabilities. I have used my accumulated assets (stocks) to pay off my credit card.

Instead of paying the debt at a slow pace I prefer to have a dual approach. Pay the debt slowly and side by side accumulate money at a greater rate of return (than the interest rate that I am paying) and then make huge payments to kill the debt. Till now I am successful, I am going to try this approach for my personal loan and the student loan too.