Things I’ve learned after 5 years of managing my money

I’ve been working for the last 5 years and making decent progress in my 15 year FI/RE milestone. Here’s a few things I learned over time and follow diligently.

1. Milestones should always be short, clearly defined and aggressive - having a milestone of saving 3 Lakhs when your income is 10 lakhs is nonsense. If you’re making 10 lakhs a year currently, your goal needs to be to increase your net worth by atleast 8 lakhs over the next year. It will compel you to grow your income.

2. Credit cards are not your friends. You can play your points games all you want but it’s not going to do much for you unless you’re a heavy spender. Cashbacks are neat, but 5-10% back up to 1500 ain’t changing your life. It’s far easier to make 5L more in income than to save 50K with credit cards.

3. That brings us to Income. Make sure you’re switching jobs often. Once every 1-2 years. I know it’s very uncomfortable each time. But it is worth it. You should aim at a 20% annual growth rate in income until you’re ready to slow down in your 30s

4. Stop chasing returns. Life’s extremely peaceful with vanilla mutual fund investing for all your needs. Equity, debt, gold, whatever. You should pick your battles. Win the income battle. Be average in the returns one. And also trading is not worth your time.

5. Lastly always compare with those who are doing better than you. That will push you forward. Never look back at the people struggling behind you and feel like you have arrived. You’ve arrived only when you don’t need to make money anymore.