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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 if you have any questions.

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