Your Wealth Ladder Journey
Follow India's proven financial order of operations
1
Emergency Fund (1 Month)
Basic financial buffer for unexpected expenses
Key Actions:
- Save one month of essential expenses
- Keep in savings account or liquid fund
- Include rent, groceries, utilities, EMIs etc in your budget
2
High-Interest Debt Elimination
Pay off credit cards and personal loans
Key Actions:
- List all debts with interest rates >10%
- Use avalanche or snowball method
- Avoid taking new high-interest debt
3
Emergency Fund (3-6 Months)
Complete safety net for job loss or major expenses
Key Actions:
- Expand to 3-6 months of expenses
- Store in liquid mutual funds or FDs
- Adjust based on job stability
4
Save and Invest 20% of Income
Systematic wealth building through investments (capitalize on tax saving accounts first)
Key Actions:
- Equity mutual funds and index funds
- PPF and NPS for tax benefits
- Automate monthly SIPs
5
Plan for Future Goals
Kids education, vacation, home, car etc.
Key Actions:
- Define short and long-term goals
- Calculate inflation-adjusted costs
- Choose appropriate investment vehicles
6
Low-Interest Debt Repayment
Home loans and education loans
Key Actions:
- Evaluate prepayment vs investment returns
- Consider tax benefits of home loans
- Prepay when financially stable
7
Invest and Give
Advanced investing and charitable giving
Key Actions:
- Explore REITs and international diversification
- Direct equity for experienced investors
- Increase charitable giving percentage
8
Evaluate and Repeat
Review progress and adjust strategy
Key Actions:
- Annual financial review
- Adjust goals based on life changes
- Optimize investment allocation
🎉 Complete Your Wealth Journey
Following these steps systematically will set you up for long-term financial success