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Financial Advice: Spend only 5% of what you earn.

Want to spend more? Start earning more!

I am a 21 year old entrepreneur and have various businesses so the profit I make varies every month so I have made a goal to invest 95% of whatever money I make and keep 5% for my expense.

It has been very difficult to keep the expenses under the radar at the start and a year before I wouldn't even go out for months as I wasn't making enough. When, because of some events or special occasions my budget would go beyond the spending limit I would adjust it by spending less in the upcoming months. I wanted to do more, buy things, go out and party so I worked harder and kept increasing my profits which allowed me to spend more. By far keeping my expense below 5% of what I make has been the best motivation for me to make more money.

My Investments are as below:

  1. I started a firm 6 months back which deals in industrial items as it has great margin of profit and I make profit in purchase of the goods as well because I buy them with cash. I have invested around 33 lakhs from my pocket till now and whatever profit I make is invested back in the firm, I plan to grow the capital to 1 crore this year, if everything goes as planned. (Nothing can grow your money faster than a business)
  2. I have personally invested 8 lakhs in shares and around 3 lakhs in mutual and opportunities fund,
  3. I have invested around 5 lakhs in gold.
  4. I also invest back a good amount of money to start new businesses related to digital media.
  5. I have good amount of cash sitting in bank which I plan to invest strategically in my business, stock market and real estate. Cash is still the king you just have to look for the right opportunities.

My Persoal Expense:

  • Gym membership fees and protein which totals to 5K–6K a month.
  • Drivers salary INR 9000, Petrol INR 4000
  • I stay in my parents house so no rent or food expense.
  • I spend around 3K–4K each month on food and movies.
  • I wanted to have all the apple products so I used to purchase one of them every other month. (This expense has gone now as I have purchased all the products I wanted too) so it saves me a good deal of money.
  • Some of the other expenses includes gifts for my parents and sister.

I have a habit of noting down all my expenses, so I can know where I can cut down my expenses when my business is not running well or need more capital invested.

2 years back I was making less then what I spend now, so I always keep my expense in control and I don’t let it exceed 5% of my previous months profit.

So that's my financial advice for you, keep investing 95% of what you make back in your business and if you still have capital left invest in new businesses, stocks and real estate. You can email me at hello@vishalofficial.com if you have any questions.

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