Humlog Guide to Financial Freedom & Living

Humlog has been publishing articles about personal finance and related themes for some time now. Many of our readers have been asking to create a broader guide to personal finance in India. But over the time we have realized that financial schemes,regulations, and investments need to be seen in the broader context of 'living a meaningful and fulfilled life'.

HumLog Guide to Financial Freedom & Living Life to Our true potential

At its core, the main idea is to realize that 'money and financial stability' are tools to help us live a meaningful life and achieve our true potential.

Our guide to financial freedom can be summarized with 5 broader statements that are described in detail further down the article.

1. Maximize your earning potential : Continuous Learning & investing in yourself

2. Have a right outlook to manage your expenses: Frugal Living

3. Have clear ideas about your and your family life goals and what makes it meaningful

4. Learn Financial Basics and details of options available to you: Financial Education

5. Be open to other possibilities and unknowns

Maximize your earning potential

One of the most important aspect of achieving financial freedom is our ability and confidence to earn money. We all know of people around us who have been successful in increasing their earnings year after year. The secret behind their success is simple - Continuous learning and sharpening their saw year after year.

If their is one compounding that beats everything - it is improving our ability and hence our earning potential year after year.

In India, we have this culture of getting settled in life where people get set with job, marriage, kids etc by 30 and then remain 30 all their life in terms of learning. We search for investment opportunities everywhere, but forgot to invest in ourselves.

Have a right outlook to manage your expenses

We need to realize that we are not our car or house or fancy watch on wrist. We live in a world full of advertisements and consumerism - Here each company is hell bent on convincing us that that our happiness is just here if only we buy their product or service. And they have hired the best people to convince us - be it Amitabh Bachchan or Sachin Tendulkar.

Once we become aware of this consumerism in our day to day life, it does not require much effort to figure out right set of expenses.

"Living Frugally" does not mean living like a poor, but 1) to be able to differentiate between essential vs non-essential expenses, 2) to be able to use our judgment before buying something.

Have clear ideas about your and your family life goals and what makes it meaningful

This brings us back to core idea that 'money is a means and not the end'. We need to figure out our and our family goals and then manage our life accordingly. We don't need to wait for an artificial time (e.g., when we will accumulate x amount of money) to live our dreams.

There are lot of meaningful stuff in life that don't require much money.

Learn Financial Basics

It is important to know what to do with our hard earned money, otherwise we will loose it all to inflation and taxes.

There is a big range of options available to us - from bank accounts to fixed deposits to mutual funds to stocks to real estate to gold and so on. It is prudent to understand the core ideas behind them so that we can manage our finances efficiently. There is no single plan that works for everyone.

Be open to other possibilities and understand Karma

And last but not the least, we need to realize that there are lot of unknowns that govern our life. Despite our best planning, we can never be sure of future. For example, whenever we go out on a road, there is always a small probability of accident or death.

We need to mentally prepare ourselves of changes. As they say - 'Only constant thing in life is change.'

One of the tool to manage this complexity comes from the field of spirituality and is called 'law of karma'. It can be described in short by 'What we sow is what we reap'. It teaches us that we are part of a bigger ecosystem and are dependent on it in multiple ways. Our best strategy is to act in a way that is beneficial to people and world around us and eventually that will bring happiness to us.