I have spent so many posts on talking about how you can hit financial freedom. Today I will give you the 80/20 of what I think are the key things I have learnt over the last few years.
- The compounding equation – Sum = Principal*(1+(Rate of Interest)/100)^Number of years. Since the 80/20 is fractal prioritizing on the Rate of Interest and Number of Years is critical. Compounding works both ways. If you have taken a loan it works against you and if you have invested, it works for you. The earlier you start your journey to utilize this equation the richer you will become, faster
- Taxes – Be an honest tax payer, pay what is due and in full. However utilize all the avenues the government gives to save on taxes.
- Always look at increasing your earning capability – so that you can hit your goals for financial freedom faster. Scrimping your way to financial freedom is a long arduous journey.
- Always give charity. Its good Karma. In some countries the government also encourages you to give charity by giving tax benefits – refer to point 2 above.
There’s so much depth in understanding just these 4 statements that complete books have been written just to cover these topics.
Since the topic is about prioritizing I will keep the post short. Just focus on these 4 statements and keep finding within them the areas where small effort can give huge returns . Again small hinges move large doors.
Till next time then.