Pay Yourself First
Today on Key to Success I would like to talk about a little known secret of the wealthy. That is, to pay yourself first!
One of the golden rules of the wealthy is to 'pay yourself first'. Before you pay any of your other monthly expenses you give yourself 10% to invest. No, this money is not for buying a new car or your next holiday, it is for long term wealth accumulation. You invest this money in real assets (this does not include your mortgage) that return an income to you. The income returned should be higher than inflation to allow the magic of compounding to work. As your money grows, the income returned increases and your wealth builds.
The wealthy use the income from their assets to buy the things they want. The average person will buy things directly from their source income or borrow it from a money lender. Can you see how this works? The assets of the wealthy keep on increasing because 10% of their source income is always used to purchase new assets. They are then free to spend the income from their assets without suffering any impact on their material wealth. As their income increases they are able to purchase more of what they desire.
Here is a great quote from Jim Rohn that says it all....
"The philosophy of the poor versus the rich is this: The rich invest their money and spend what is left; the poor spend their money and invest what is left.
Give yourself a boost up the ladder of success and pay yourself first!
One of the golden rules of the wealthy is to 'pay yourself first'. Before you pay any of your other monthly expenses you give yourself 10% to invest. No, this money is not for buying a new car or your next holiday, it is for long term wealth accumulation. You invest this money in real assets (this does not include your mortgage) that return an income to you. The income returned should be higher than inflation to allow the magic of compounding to work. As your money grows, the income returned increases and your wealth builds.
The wealthy use the income from their assets to buy the things they want. The average person will buy things directly from their source income or borrow it from a money lender. Can you see how this works? The assets of the wealthy keep on increasing because 10% of their source income is always used to purchase new assets. They are then free to spend the income from their assets without suffering any impact on their material wealth. As their income increases they are able to purchase more of what they desire.
Here is a great quote from Jim Rohn that says it all....
"The philosophy of the poor versus the rich is this: The rich invest their money and spend what is left; the poor spend their money and invest what is left.
Give yourself a boost up the ladder of success and pay yourself first!
posted by alchemist at 1:50 AM
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