How to upscale life over time and make it affordable in the process?

upscale life, luxury living, affordable, housing

We all dream of living in luxury. But how do you make luxury living affordable? Not all of us were born with a silver spoon or inherited great fortunes from parents and ancestors. So how does one upscale life while not being too harsh on one’s pocket?

The answer is with SAVINGS and PATIENCE and over TIME. Unless you won a lottery or became the winner of a reality show that got you fame & wealth overnight, up-scaling life takes its course. We have several examples of self made billionaires or professionals who retired early because they started saving & investing early. Here are some of the ways that will lead you onto a similar path.

Cut down your fixed costs

Believe it or not most wealthy men don’t live in penthouses or drive Bentley. Warren Buffett still resides in his old Omaha home that he bought for $31,500 back in 1958. However, this does not mean that you should live in shoddy apartments or thatched huts but to find the right home which meets all your requirements without compromising upon your social status. Your mobile and internet bills, house rent or home loan EMI and your cumulative fixed costs should not exceed 60% of your monthly income.

Save 30-40% of your gross monthly income

No one ever made wealth without the right attitude. The more you save today, the more you have for future- it is as simple as that. Evaluate your fixed expenses- basic necessities, bills, rent or loans. It should ideally contribute to 40-50% of your monthly income. Next, tuck away 30-40% of your income in various debt instruments like Fixed Deposits (FD), Recurring Deposits (RD), etc. This is your savings for the future and to address any financial crisis or emergency.

Invest 10-20% of your gross monthly income

There’s one golden rule of investment- start early. Investment is the only way to grow wealth over time.  The effect of stepping up principle  and compounding interest can immensely add to growth.  While there’s no denying that investing in mutual funds is risky but a carefully planned diversified investment portfolio can help minimize the risks. You can start by investing as low as Rs. 500 INR in Systematic Investment Plans (SIP) and get 10-15% interest depending on the mutual fund.

Save 50% of your raises & bonuses

As it is important to celebrate your successes and promotions, doing it strategically and saving at least 50% of your raised income can go a long way. This saving can then be split into savings and investments making a step-up growth in your wealth.

Now as your gross income and investment starts growing your wealth, some aspects of your living can hence be used to upscale life eventually. These small changes can be in the form of affordable home renovations, a car upgrade and so on.