December 27, 2014 Admin | December 27, 2014 Pay yourself first is a rule that all wealth creating people understand. What is it? How do you do it?
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Paying yourself first means you spend your money on things that will help you in the long run, such as index funds. You spend your money on yourself before you buy things for other people or buy things that you do not need. You can do this by creating a plan of how much money you will set aside each month of investing and make sure you take that money and invest it first before you waste it on something else.
Pay yourself first is when you set aside some money before you go and pay your other bills and spend your discretionary income. The reason pay yourself first works is because you will always have that savings every month if you prioritize it. You set it aside in a savings, or a index fund or retirement fund and let it grow. You can set something up so that you have an automatic amount taken out of your pay check of bank account every month for this.
Well said, gentlemen. Let’s review.
1. Wealth creation requires strong and consistent savings habits.
2. Save immediately upon being paid.
3. Have it taken out and placed into your investments so the money starts working for you as soon as possible.
4. Spend/give what remains of your salary and that includes your taxes so plan accordingly.
5. Save at least 10% and strive to make it 20%. Your financial future requires it!