To build your financial independence you must be able to respect different steps and master a specific budget breakdown for all the money coming in and going out in your life.
This budget breakdown is taken from the book "Cashflow Quadrant: Guide to Financial Freedom" by Robert Kiyosaki.
For each inflow of money, it should be divided as follows:
- 30% goes directly to buying assets: you know the expression "pay yourself first"? Well, that's paying yourself first. Instead of spending all month long and seeing at the end what we have left to exchange our money, we put this money directly on the side so that it is secure. Indeed we often have nothing left at the end of the month if we wait to save money this way... So before spending any money, as soon as you have an income, put 30% of your income in exchange and allocate this sword to the purchase of assets that will generate passive income as I suggested in the first article on the foundations of financial independence.
- 40% to be used for our daily purchases: i.e. our food, electricity bills, etc... in short, everything that has to do with consumption to survive.
- 30% for pleasures: i.e. a good restaurant, buying habits, having a drink on the terrace etc... all that corresponds to the pleasures of everyday life but which are not necessary for our survival.
If you respect this budget allocation, you will naturally manage your finances much better in the long run and you will feel much more comfortable with your financial situation and much more serene. Especially since you buy assets directly at the beginning of the month, at least you put money available for directly and this is what over the months will grow your wealth and you gradually get closer to your financial independence.
That's it for me for this new lesson on the basics of financial independence. Don't hesitate to link and comment if you liked it, as well as to put a tip for your support that will push me to post more and more content like this!