Consideration on Financial Freedom #2
Continuing on the Following Topics Expense considerations: what counts as essential expenses — family, children, mortgage payments, etc. Investment portfolio discussion The threshold for financial freedom depends on necessary expenses . These are fixed costs that cannot be reduced—and may even increase over time. You must budget carefully for them, such as children’s education or support for parents. This figure directly affects the amount you can invest. Let’s denote this fund allocation as L . Generally speaking, you should reserve at least 6 months of living expenses (including fixed costs). Ideally, keeping 12 months or more of living expenses is better since part of it serves as an emergency fund —cash you can rely on when unexpected events occur. As for managing L , the goal is to ensure the money never decreases, and it should be liquid within about 3 days . This portion can include bank deposits, ultra-shor...