Additional information
by Prem Amrit (Author)
Money is a topic that is never taken out of context. With each stage of life, our needs change, forcing us to rethink our priorities. There is never a moment when you can ignore your finances. Like moving from college life to a new job, or from years of stable income to retirement, money problems never stop.
With a little planning and positive steps, finances can bring a lot of peace and freedom.
"The ultimate goal of investment and wealth management - financial freedom" will tell about certain steps towards a possible financial freedom. This book describes the main steps in goal planning.
Financial freedom means: "passive income" is greater than "necessary expenses"
"Passive income" refers to assets that generate income even if you passively do nothing, or make little effort.
Examples include stocks, equity or dividend funds, bonds, leased real estate, leased land, and more.
For example, the average monthly living expenses of Mr.x family is ₹40,000 ($501).
₹40,000 ($501) x 12 months = ₹480,000 ($6019).
So Mr.x bought 10 million bonds with an annual interest rate of 5%, and he could get
10 million x 5% annual rate of return every year = ₹500,000 ($6270) of interest income per year
. This ₹500,000 ($6270) of interest, Mr.x can get it without doing anything, it is" passive income".
Of course, Mr.x can also choose to work or do business.
At this time, the income he earns does not have to be used to cover living expenses, and can be used for other luxury goods,
or reinvested to improve the quality of life!
In the future, even if Mr.x does not go to work, he will still have:
₹500,000 ($6270) passive income > ₹480,000 ($6019) living expenses
and ₹20,000 ($250.80) additional funds that can be used every year
Therefore, we can say that Mr.x has achieved "financial freedom"!
Financial freedom can ensure a stable life
When an accident occurs in your life, and you cannot rely on work to support your life, having a passive income can reduce the impact of the accident.
You don't have to worry about your family's livelihood. You can use passive income to support your future life and make your life more stable!
The real purpose of financial freedom is not to encourage not working.
Most people work to maintain a living, but after getting rid of the trouble of maintaining a living, the meaning of work can be to improve the society and create more value!
