Irrespective of the country you are living in, savings for wealth creation is an important facet of your working life (Age: 21–60)
One must understand a simple concept:
“Salary is not equal to wealth.”
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So, ideally, there is no upper limit to what a person should save but there are some pointers that can be helpful
- Save at least 40% of your salary when you are within the age of 21–30
- Invest in Equity in accordance to formula: Equity Exposure = (100–x) % where x = age of the individual. This is high when the individual is young and vice versa
- Do not get stuck in any kind of loan before you cross 30 (some are unavoidable like educational loans but strive to avoid them)
- Set aside 6months worth of living expenses (that includes travel, rent, utilities, bills, occasional eat-out & leisure activities) once you cross 25. This fund is meant for contingency or when you are between jobs or taking a sabbatical
- Look for value deals. You are here to make yourself happy and not to impress people
- Do not buy things on EMI till there is a need. Understand the difference between need and want
- Do spend money on things that are value compounders (like courses, art classes, instruments, etc.)
- Try to build a passive source of income amounting to 25% of your take-home salary by age 30
Hope this helps
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Happy Investing!!
Lateral Thinking 