A Portion of all You Earn is Yours to Keep.
This is one of the primary principles of wealth creation. If you examine the habits of virtually all millionaires, particularly self-made millionaires, you will find this habit well entrenched. If you pay yourself the first 10% of all you earn, before long you'll have a sizeable foundation for your wealth creation.
The idea of 'pay yourself first' was popularised from George Classon's book 'The Richest Man in Babylon' written way back in the 1920's. As with all universal principles though it holds true throughout time.
When do you get to spend it?
The short answer is NEVER.
What's the point of saving it then?
This is the foundation of all your wealth creation. You can use this money to accumulate more money through wise investing. It also gives you some credibility with money lenders and is a form of leverage in this way.
Another major positive of paying yourself first is the habit of self discipline it creates. It is empowering. You will know you can achieve any goal you set your mind to.
Why pay yourself first and not last?
If you don't pay yourself first, you probably won't pay yourself at all. By the time you have paid for all your cost of living expenses, education, debts, housing, leisure etc there probably won't be anything left for YOU.
Besides, don't you think you deserve it?
How to pay yourself.
Open a separate account into which you will put 10% of all that you earn. For your ease and convenience it's probably a good idea to have it linked to whichever account you use for receiving your pay. BEFORE allocating any money to anything else transfer your 10% (or more) across to the 'never to be spent account'.
Watch how fast it grows. You'll be surprised at how quickly a significant amount accumulates no matter how meager your income may be.
When the amount has accumulated into enough that you can use it to generate more money from, it will be time to look at acquiring income producing assets. More on this next time. :)
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