With 2015 few days away, I thought of writing the most debated topic & a crucial benchmark, which always get backseat…. What should come first? Expenses or investments?
Let me start with you… which one will you prefer?
- Income minus expenses equals investments
- Or Income minus investments equals expenses
I will not be surprised, if you have selected the 1st option, as most of us including myself (till few years back though) follows the first model, i.e. we take out expenses from our monthly income first & balance is looked at investments later, on what is left.
I started thinking as to why most of us follow this model, even though back of the mind we know it’s wrong.I started comparing societies & countries on how they follow savings & investments. What comes out clearly in the culture & upbringing an individual goes through, where I can draw parallel to the most heated topic of 2014, “women empowerment”.