Balancing salary and real estate investment: How much should you invest?

livemint.com:

Also Read: Real Estate Investments: How are retail investors benefiting from small and medium REITs?One popular budgeting strategy that can help guide your investment decisions is the 50/30/20 rule. This rule suggests dividing your after-tax income into three categories: needs, wants, and savings.

According to this strategy, 50% of your income should be allocated towards needs such as rent or mortgage, food, and utilities. These are the essential expenses that you must cover to maintain your standard of living.

The next 30% of your income can be spent on wants, including entertainment, dining out, and other non-essential expenditures that enhance your lifestyle. Finally, 20% of your income should be directed towards savings and investments, which include contributions to stocks, bonds, and real estate.The 50/30/20 rule provides a structured approach to budgeting and investing, ensuring that you are saving a reasonable portion of your income while still enjoying your life.

However, it may not be suitable for everyone. For instance, high-income earners may find that they can save a larger percentage of their income, while those with lower incomes or higher living costs may need to adjust these percentages to maintain financial stability.

Also Read: 5 key factors you should consider when investing in real estateWhen considering investing in real estate specifically, it's important to factor in both the initial costs and ongoing expenses.

Real estate investments often require a substantial upfront payment, including a down payment, closing costs, and any necessary renovations. Additionally, you must account for ongoing expenses such as property taxes, insurance, maintenance, and potentially property management fees if you