Exposed my plan to receive a free salary in 2024

Hey,

In one of our previous newsletter, I shared a tip from the richest person in Babylon. The tip was to make your money work for yourself. Make an extra income using the money you have earned by working actively.

Here is my plan to earn around 30-40 K in passive income next year. But, before we dive into the plan let us understand a very important budgeting concept. I.e. the 50-30-20 Rule.

The basic idea of this rule is to divide your income into 3 portions,

• First portion is 50% of your salary to necessities. This includes your utility bills, Rent, etc.

• The second portion, i.e. 30% of your salary should be allocated to your wants, Things that you were planning to buy for a long time or vacations, and experiences that you dream of.

• The Third portion changes the game, this is the remaining 20% that should be allocated to one of the two things- 1. Making yourself Debt free or 2. Savings for a prosperous future.

But honestly, this rule can’t be followed in exact proportion every time. This rule sounds cool in theory but in real life, you have many unexpected events.

Now let us see how I have leveraged the 50-30-20 rule to devise a investment plan by making some important changes to the rule.

Before implementing the 50-30-20 rule I have asked two questions to myself.

Question 1: What are my wants?

Question 2: How much risk can I afford to take?

One of my most important dream is to pursue Education abroad in 2024, For which I would have to save a capital of at least 10 Lakhs. To achieve this number I have changed the proportion of savings from 20% to 30-40% of my salary, I have alloted 20% to my wants which include vacations, weekend parties etc and the remaining 40% of the salary is allotted to necessities.

Keeping in mind that I need my savings within 2 years and I can’t invest it in risky instruments I have made 2 decisions.

• First is to invest in assets that are extremely liquid in nature, I.e assets that would allow me to cash out within 2 years.

• Second is to have a large amount of my savings in low-risk assets.

Based on these points I have Invested around 4 Lakhs in Fixed Deposit @7% interest on average.- Low risk asset

Other 40,000 is Invested in Mutual Fund @ 17% Interest rate- Medium Risk asset

And around 20K is invested in Equity currently at 3% returns but expected to return 12% in 2024- High risk.

If we calculate the expected returns on these investments-

Fixed Deposit – 28000/-

Mutual Funds – 6800/-

Direct Equity – 2200/-

Total – 35000, Which is almost equivalent to my one month’s salary.

This is my Investment plan for 2024. I hope this example helps you to plan your finances as well

In the next newsletter, I would be disclosing my Stocks portfolio, See you soon!!!