Anyone can be wealthy/financially free

If you are wondering like me when I first started, how does it feel like to be financially free or is it even possible! The answer is - it feels awesome and yes, it's possible (at least for me).

I am talking about the book "The Richest Man in Babylon" - where I first learned anyone can be wealthy with moderate earning, conscious spending, and prudent investing. This was kind of eye-opening for me, and I thought I would apply those principles in my life and let's see what happens. And to my surprise - it worked :)

These are the principles I learned from the book, then modified a little bit based on the current time and economic conditions and sharing with you all for the first time

• Pay yourself first (Minimum 10% of your monthly income)

• Control your expense (Know your monthly ETI)

• Make the saved money multiply (Invest in something)

• Guard your investment from tragic loss (Don't lose your investment)

• Make your house a profitable investment (Don't overspend on primary)

• Ensure future income (Guarantee retirement income)

• Increase the ability to earn (Multiple streams of income/income++)

So, I came up with the interesting concept of expense to income ratio (ETI) which is a similar concept to Debt to Income ratio (DTI) - mainly used by financial institutions to measure how creditworthy are you. The typical ratio for buying your first house is around 43, and the hard cut-off ratio is 50 (if you are an experienced real estate investor like myself).

DTI = 100 * (Total Debt/Total Income) [used by the financial institutions]

Calculate your monthly ETI (Expense to Income ratio) and reply to me with that number to make yourself accountable (Feel free not to do it if you are not up for the challenge since we just met).

ETI = 100 * (Total Expense/Total Income)

Our goal is to decrease this number month over month slightly and that's what the journey to financial independence is all about. The trend needs to be downward, not upward.