Stay 'Broke' this year

Aftermath of Njaanuary

Being 'broke' should be your modus operandi this year. Being 'broke' means you have the money but you rather save and invest it than spend it. It is putting away most of your money around 80% if you can, leaving you with only 20% to work with. You will realize that staying frugal will be very easy. You have no money so you won't spend any. Doing this long enough will make it automatic to spend only 20% of your income. After a while, you will find that you have saved most of the money you have earned.

Money x Money x Money

8th Wonder of the world, compounding

Now for the money you have saved, what you don't want is for it to sleep in the bank. Personally, I usually have less than 7k in my account. I like putting that money to work by buying shares in the NSE. The key to wealth is to make your money make more money and let it continue ad infinitum. It is like having 2 goats and the goats have 3 kids, the kids grow up to become goats and each have 3 kids of their own. Over time, they multiply and grow to 1,000 goats! That is the same logic we should use when it comes to growing wealth. Compounding is your friend here and if you give your assets enough time to multiply, you are on the road to becoming wealthy.

Control of your time

Master of your time

What most people want in life is control of their time. Most people  say they want financial freedom but they really want is to do what they want, when they want, with whoever they want. How much money you need to take back control of your time depends on you and your lifestyle. I think most people reach this point when their passive income covers their expenses and then some. 

Chase Your Purpose

What drives you?

Once you have reclaimed your control of your time, you start to wonder what you will do with it. This is where your purpose comes in. Having a strong drive in this life is the most important thing. This is the core message of Ikigai by Hector Garcia and Fransec Miralles. You can read the review here. This is even more important than money, relationships, health etc. This provides the foundation for everything that is to come. A strong foundation allows the house to can weather anything. A weak foundation and the house you build is basically a house of cards. One storm and the house falls down. 

Pursue Essentialism

Remove the clutter and focus on the few

Gaining control of your time and having purpose is all good but it can get better. I have come to realize most of the things you want are usually meaningless and do not add meaning to your life. They look nice and you might impress one or two people but after a while you get bored with it. This thinking has led me to getting rid of many of things like TV, Monitor, Weights etc.  I have only the essential with me and my place is more spacious. I realized I am at ease when I come back home after a long day at work. No distractions from the TV means I get to work on my passion projects. So when I go to sleep, I feel accomplished for not having wasted my time watching Tv. I don't know if I am the only one, but these days there isn't much to watch anyway. I rather read a book where I can get practical information that I can use to improve myself. I think everyone should embrace essentialism in their life and pursue what really matters. For more information on this topic, you can read the book, Essentialism; The Disciplined Pursuit of Less by Greg Mckweon. If you want a summary, you can read its review here.

Conclusion

I hope this short article has given you something to think about when it comes to money. I borrowed these concepts from the Psychology of Money by Morgan Housel which is a must read. You can read the review Psychology of Money Review.