The realization of financial freedom is a kind of living condition that everyone wants to achieve.

According to Sina Finance, the latest Hurun Wealth Report shows that the threshold for free wealth in China has risen by 50%!

In the first-tier cities must reach 290 million yuan, while second-tier cities also need to reach at least 170 million yuan.

This is the conclusion that the Hurun Research Institute has conducted research on 449 individuals with high net worth of more than RMB 1 million in personal assets in the past six months. Among the surveyed high-net-worth individuals, 62 have assets of over RMB 100 million.

However, in the face of such “astronomy” figures, many people expressed their desire to wear …

What is the tone of “financial freedom”?

In fact, financial freedom is a state of living. It means that you don’t need to work hard for living expenses. Passive income can cover living expenses. You can freely do what you want to do.

In simple terms, the realization of financial freedom must meet a formula: passive income ≥ living expenses

For example, the monthly living expenses of someone is 2,500 yuan. To achieve financial freedom, his annual passive income must reach 2,500 times 12, which is 30,000 yuan, to cover basic living expenses.

Assuming that his annualized return on investment is 6%, the principal he needs to invest in financial freedom is 30,000 divided by 6%, which is 500,000 yuan.

Therefore, financial freedom is not only related to the principal, it is also related to living expenses. If you do not save money, even if you open source, it seems difficult to achieve financial freedom.

The amount of living expenses is related to the way you want to live, in other words, your desire is related.

Turn “financial freedom” into “financial balance”

In fact, financial freedom is affected by the two conditions of “principal” and “expenditure.” Therefore, reasonable expenditures, or sensible open source, are all means of achieving financial freedom.

Financial balance refers to “active income is much greater than living expenses,” and achieving financial balance is much more common for ordinary people than pursuing “financial freedom.”

To see if the financial balance has been achieved, it depends on the ability to do the following three things:

The annual balance is at least 30%, preferably over 50%. For example, if you earn 100,000 a year, you only spend 50,000, and you can’t exceed 70,000.
Allows for more than six months of living expenses, which is an emergency reserve.
Make a self-protection plan and configure your own insurance.

What is Australian’s standard for “rich”

In Australia, the standard of wanting to live a prosperous life sounds less mad.

Financial survey site Finder.com.au surveyed 2005 adults in five Australian states/territories and found that:

The “rich” in Australians’ eyes is equivalent to a deposit of 5.3 million Australian dollars.

Finder spokesperson Bessie Hassan said: “Now, if you have more than $5 million worth of your net worth, you can rest assured that you don’t need to worry about the money again. You have the ability to buy a nice house and you can go A good restaurant for dinner and travel abroad every year.”

In addition, the survey found that men and women have slightly different requirements for the “rich” life at this stage.

On average, men think that the sign of wealth is A$5.9 million and the average woman is A$4.8 million.

As parents, the definition of wealth is also not the same.

Parents of children under the age of 10 think that A$3.7 million represents wealth, while parents whose children are in adolescence believe that A$8.2 million is a more ideal form.

Adults without children think that the $5.6 million is relatively ideal.

How to achieve “financial balance” in Australia

Speaking of financial management, many Australians are “little white,” and can be said to know nothing about it. They simply do not know how to manage money.

But in fact, in Australia, as long as you deposit, you have already walked in front of these Australians!
Here are some suggestions for the following:

1. Divide fixed income into three parts

There is a very simple formula that can be used to plan your own income and expenses. That is the 6:3:1 rule.

Divide your income into three parts:
Every month, 60% of the income is used to pay for the necessary monthly expenses (mortgage, rent, food, utilities, and telephone bills).
30% of monthly income is used as a bonus or other unexpected expenses.
10% of the remaining monthly income is used for saving.

If your fixed expenses exceed 60% of your monthly income, you must take some “throttling” actions against fixed-item expenses such as: on-lending to lower mortgage rates, change phone packages, change an insurance company, or “reluctant “Cut Love” cancels some recreational activities. Don’t waste your “hard-earned money” because you are too lazy to compare.

Of course, this formula may not be suitable for everyone, but there is only one basic principle and central idea – divide your income into fixed expenses, no fixed expenses, and save three copies.

2. Use deposits for more investment profits

Most people will choose to put their savings assets in bank accounts, but in fact, putting money in banks will not make us more expensive.

Even under the pressure of inflation, money continues to depreciate. To avoid this situation, we have to try to accept some risks, such as investment tickets or real estate.

3. Efforts to own a home without housing mortgage pressure

A good self-occupation can not only provide a good way of life, but also promote your better savings income. Concentrate on repaying the mortgage, and putting as much money as possible into the hedge account in your mortgage account, you can pay less on loan interest.

It is wise to pay off your mortgage before retirement. Because, the property test at retirement does not include self-contained housing, so only those who own the house can get a full pension. However, if the proportion of ownership of houses declines, the pension will also decline. Moreover, there is no need to pay capital gains tax when the home is sold.

4. Develop better saving habits

“The Moonlight family is very common among many young people. However, this type of consumption is not a proper way for young people with vision, thinking and pursuit.

Instead of “moonlight” while doing “a night of riches” daydream, it is better to start with a small amount of money from the province.

According to statistics, 20-year-old young people save AUD 2 per day and allocate appropriate investments after certain accumulation. It is very likely that they will have AUD 30,000 in assets at the age of 40 (calculated at 7% rate of return). The province saves AUD 5 per day. At the age of 40, it has more than AUD 77,000; the weekly AUD 50, and at the age of 40, it will be able to play 100,000 AUD “major money”.

5. Pay attention to the accumulation of relevant knowledge of investment and financing

And really want to become a financial master, in addition to good luck, but also need to learn more information, and rely on their own knowledge to improve the ability to control the risk of investment.