We previously discussed the introductory part of the book. We also discussed first two of the seven simplest plans to achieve financial freedom. Today we will discuss third which is one of the most important plan to achieve your goal that is price of your dream.
Price of your dream
If you randomly ask ten persons in the street that how much money they want in their life. Most will answer that they need 1 crore or 10 crores or 100 crores in life. It is just a random number. People want huge number. In reality they even don’t need that much of money if they calculate properly.
Expenses of normal family
Let calculate a normal middle-class family expenses so that you can understand how much money actually a family need. We are assuming a four people family. They have 30 thousand rupees monthly expenses. That means yearly 3,60,000 rupees. If this is the case you just need 60 lakhs rupee to be financially independent. You may ask how? Let me explain.
Return on Investments
In a normal bank you will get 6 percent interest rate in fixed deposits. So if you deposit 60 lakhs rupees in bank, rest of the life bank will pay your expenses. If you notice you will find this number is quite low than the number imagined by common people.
But there is a problem. In a growth country like India where there is a higher inflation rate. So in upcoming days the family can`t maintain their lifestyle with the same interest rate given by the bank. So any fixed deposits or debt fund will not address the issue. That’s why we have to invest in equity markets where it easily beat inflation. It means you can invest less and get higher profits.
Better ways to invest
If you smartly invest in some good companies like ITC, Castrol or Bajaj, you can also get dividends by which you can meet up your expenses after few years. At the same time the stock prices also increased. So it is win-win situation for you. In the book author told this as a lifetime income plan.
But it is little risky to choose a stock. Those are not stock recommendations but we just want to tell that we can meet your expenses easily with a proper planning. With that we can also fulfil our dreams.
Education of financial knowledge
We just need to figure out how much money we need and how can we achieve that with the help of equity market with financial knowledge. Because if you dreaming to be millionaire without proper financial knowledge then maybe your dreams may remain dreams. You must educate yourself by books, seminars, courses. You need to know the technique by which you can read the financial statement of any company. So that for you buying stocks does not seem as a gamble but as an business.
In the next part of the series we will discuss the five stages to get the ultimate and absolute financial freedom step by step.
To be continued.
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