The Golden Rule of Building Wealth: Pay Yourself First
If you are like most Americans you have enjoyed a nice standard of living, but failed to save much for the future:
Over 40 percent of Americans have less than $10,000 saved for retirement. Nearly 70 percent of Americans have less than $1,000 stashed away, according to GOBankingRates' 2019 savings survey. The poll, revealed 45 percent have nothing saved.
One third have saved nothing. It’s easy to see why, first there are taxes, then monthly bills, then entertainment and it doesn’t take much to have more bills remaining at the end of the month that you have income.
You have to reverse that. If you don’t create a change, in ten more years you will be in exactly the same spot.
“Pay Yourself First” is considered the golden rule of personal finance. If you take nothing else away from reading this book, start on your path toward wealth by living below your means and saving or investing at least ten percent of your after tax income.
The starting point to building your wealth is when you can pay yourself first. The amount will snowball over time and you can maximize your return with smart investments to make your money grow.
If want to have even the hope of achieving financial freedom, the very first thing you have to do is change your mindset by starting to pay yourself first every month. This is something that you deserve and is essential for anyone who wants to become wealthy.
Why You Want to Save 10 Percent of Your Income
Here are the top three really good reasons why you should save 10 percent of your income (and of course more is better):
You only need 90 percent (or less) of your income to live on, if you are being practical with your money. If you are spending your entire pay check before it even hits your bank account, then reading this book is not going to help you get on a path toward wealth. You need to first take a good hard look at your spending habits and make some revisions. Creating and living within a budget is key and the first line item of that budget should be 10% of your income going toward investments, including your contributions to a 401K at work or an individual retirement account.
One simple way to do this, is have 10 percent of your pay check automatically withdrawn from your paycheck and deposited into a savings account. That way you won’t even miss the money and can start developing your investments plan.
If you never put money away for retirement, your will find your golden years will be spent in front of a TV watching the world go by, instead of living your best life. On the other hand if you want to see the world then you have to start putting money away for yourself right now!
It will decrease your stress levels. Money or the lack of it causes a great deal of stress. Arguments about money is the leading cause of divorce so start making smart financial choices now, decrease your stress levels.
Start by saving 10% of your take home pay every week, or month. Over time this is the foundation of walking toward wealth.
Extracted from the Book: Five Simple Paths to Wealth by Floyd Saunders. Available on soon Amazon.