A very dear friend lost his job last month. Currently he is taking his wife and their two children on a trip  around the world, instead of looking for a job. The truth is, he doesn’t really need to look for a job, he is financially very secure. He started working at the age of 15 and followed the 60:40 rule. Save 60% of the money he earns and spend only the 40%. By the time he finished his Engineering degree, he owned his own 2 bedroom house. He is 42 years old, owns a fully paid home and two investment properties that bring in a good rental income and he can live on the rent for ever without having to work. ( He didn’t take a single dime from his parents ever since he started going to Uni )

My mother’s aunt adviced my mother to save 100Rs/month from her salary the day she started working. If my mother had followed that advice, when she retired she would have been a millionaire.

I don’t have time to work it out, but quick maths shows, if you started with 100$ and invested 100$ every  year and the interest is 10% ( bit high, but easy to work with) at the end of 5 years, you will have $639, 20 years $ 6500, 40 years it will be $ 58,827.

Financial independence is pretty easy if you are very careful  working with the money you have in your hand.

12 thoughts on “60:40

  1. The sad truth is that not many follow it or know it..Instant gratification is where the society lays emphasis on. They do not teach savings and investing in school and parents too do not teach it (generally). School requires so many ‘life skill’ credits to graduate, but savings and investing is not one of them.. the most important one.

    • MS: Both my older children have enough money to buy their own car. They have been saving since they were old enough to understand why they should save. I think children should be taught about money matters as soon as they are able to understand things.

  2. Vow, I applaud your friend for financial discipline. Happy to see you back at bloggig.Did miss the daily dose of daofto ( you may have already figured that one from the IP Address that I was looking for posts quite frequently)

  3. I have heard something similar to this, and also I am going to follow the same once I get a job. Saves a lot of heartache just in case something happens along in the future. Don’t know if you know Jim Rohn, but he’s a good influence when it comes to saving money. Watched many of his videos. Pretty inspirational IMO.


    • J1206: Forgive me for asking.. and I am doing this because I consider you like an older child, why are you not working and saving money? My children work and study and save their money.

      • You mind if I can explain to you personally via email if you really would like to know? I have gone through so much obstacles this year and life had thrown a curve ball, so I’m back at square one.

        • J1206: Life often throws you a curve ball.. but that shouldn’t stop you from living. Go out, get a part time job, work, study and do the things you always wanted to do.

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