Let this note find you in the best of financial & physical well being.
- This completely excludes salary or any bonus or other benefit. This includes interest income, rental income, dividend, income from business (which runs without monitoring), etc. Remember to keep out anything that you got from inheritance: self generated financial freedom has its own joy.
- If you have any annual inflows, then divide by 12
- For any bank balance or investment portfolio, for simplicity you can take 1% of the balance as monthly income. (This presumes 12% post tax return, which can also be possible if one invests prudently)
- Notional gain from house property is to be excluded.
- If you stay with parents or in company provided apartment, for similar lifestyle, what will be your expenses: rent, utilities, food etc?
- Add all the outflows: EMIs, education, food, entertainment, travelling, even insurance premium etc.
- We have enclosed an XL sheet that may remind you of many possible expenses
- Asset: what brings regular money inflow in your pockets. So a stock investment with regular dividend would be an asset. A house getting regular rent is an asset.
- Liability: What takes away money from your pocket regularly. So a car bought for self use, would actually count as a liability unless you give it for hire!!