Slave of your salary?

Do you recognize this person? The person is completely dependent on her salary. Cannot survive for more than a month without his salary. Is living only to earn his salary. Is not happy living with living only for the purpose of earning a salary. He is free to change his employer as and when possible i.e. not enslaved to his employer. However, she is enslaved to her salary. Does the person look familiar? Very familiar? Too familiar that it sounds scary and makes you uncomfortable. Here, we were living under the illusion that slavery had long been abolished. Sounds complicated, however can we simplify it so that its less scary.

Let us think of a challenge 12 month from now to free yourself a bit from the slavery

• Let us think of December-2020 and we start planning for it in December-2019.
• In December-2020 you are not allowed to use even a single Rupee from your salary
• If I can’t spend a Rupee of my December-2020 salary, then how the hell am I supposed to run the expenses for the month
• Well, I will use my savings or borrow
• No, you are not allowed to touch your savings
• You are definitely not allowed to borrow
• Your only allowed to touch other earnings accumulated during the year e.g. interest from your bank, interest from your fixed deposit, rental income if you have any, earnings from any side gigs, money made in the stock market, dividends etc.
• Again, you can use money earned aside from your salary or money earned from your savings
• Sounds complicated doesn’t it.

Let’s simplify and solve the challenge

Solving the challenge

• Think of a young professional starting off in her career
• Let us assume she gets a take home of Rs 50,000 per month
• The person is a bit careful with her money and is spends only Rs 40,000 per month
• Saving = Earning - Spending = 50,000-40,000 = Rs 10,000 per month
• The person would require Rs 40,000 in December to be able to win this challenge
• Let us assume that the person put his savings in a fixed deposit which provides an interest of 7% per annum
• To be able to earn Rs 40,000 interest in December, the person would need to save Rs 571,428
• If you are saving Rs 10,000 every month and putting in a fixed deposit earning 7% per annum and you reinvesting the interest earned it would take you about 50 months or more than 4 years to gain your first month of freedom
• It’s a long wait ... sounds disappointing for some ... the patient ones can grind out the long journey

Let’s hacks a better solution

• What if you found a new job which gave you a take home Rs 57,500 per month ( a reasonable 15% increase) and not increased you expenses from Rs 40,000 and now started saving Rs 17,500 and putting it in a fixed deposit of 7%. Now it would only take 30 months to reach Rs 571,428. 50 months reduced to 30 months is great progress
• What if you decided to be really frugal in Dec-20 and spend only Rs 35,000. You would need 26 months to reach your goal of Rs 35,000  with the increased salary
• What if you could sell of your not used stuff and get some additional cash
• What if you could sell your skills as a freelancer and get some additional cash
• What if you could give some tuition's and get some additional cash
• What if you gave lessons on a hobby you have and earned some additional cash
• What if you could educate yourself on financial strategies which could help you earn more than the 7% a fixed deposit comes
• What if you moved to a lower rent house and reduced your expenses
• What if you took up a roommate and reduced your expenses (if you are single)

What if .... (fill in the blanks yourself, be creative, be bold)

The solution is to hack a solution for yourself. Gaining freedom from slavery is not an overnight task. It will take years and month of hard work and hustle. However, the first month of finical freedom can be earned and so can be 12 months of financial freedom. It requires grit and the ability to grind it out. Are you ready.

I have started my journey, I am on track towards achieving my financial freedom though far from it. Where are you? Do you really want to be free?