Of all the keys to making abounding wealth there’s possibly none more crucial than paying yourself first!
Now I am not talking about spend money on yourself, quite the contrary. It should be viewed more as money you use to invest in yourself. Self-investment is a habit of the wealthy which cannot be stressed enough! You see, you tend to pay everyone else from the money you received from your hard earned labour before you ever pay yourself. This is a habit that must be transformed!
Only the rich are taught the lesson of paying to yourself first and that is why no matter how bad there situations become they always have a sum of money from which to re-build their fortunes (which they almost always do), We aren’t taught such things at college or by our parents or peers and therefore we usually start on a poor footing.
The ease with which you can get a loan seems to be the reason why many people find it ok to start off adult life and their career in debt. This debt just mounts up over the years until, sometimes, it just becomes unmanageable at worst, or the reason ffor working at best!
When we are young the message we hear isn’t the one we should be hearing. We are seduced by the money moguls into thinking that immediate gratification and a lifetime of credit and debt is ok. However, it does not have to be that way.
Have you ever had to strive and save for something? I’m sure you have. Do you remember what it was like when you made that purchase – the purchase for which you made sacrifices? I bet it felt good!
When we save fro something we really want it feels so much better when we get it. However, when we borrow money to buy the thing we want it often becomes a burden and we are still paying for it (with interest) long after the novelty of having it has worn off and a new desire has taken its place!
When we borrow money we effectively become an asset of some other person. Our money starts to control us because we are committed to the repayments we have to make. In an effort to keep our current standard of living we borrow some more and suffer the effects of compound interest in reverse.
However, when you pay yourself first’ you are building solid foundations from which you can actually get rich! As this little pot of money grows it becomes a means for investment that can grow by itself using its own compound interest. The extra responsibility of investing money smartly is a great intro to any finance management.
With a little bit of discipline, making an investment in yourself isn’t such a hard thing to do. Generally taking 10% of your wage and putting it aside in a place that is difficult to get access to (but not impossible because you will need it to invest as it grows) stops you from spending it on needless trinkets or “must have” items that catch your eye!
There are many good investment opportunities that allow people to make small investments on a monthly basis. By taking these opportunities you can begin to understand how money works and what it means to be on the right side of compound interest. You can let your money work for you just like the rich do.
By paying yourself first, before anyone else, your focus will change from making an investment in liabilities to making an investment in assets and yourself. This is the true road to building wealth and getting out of the “credit trap” that so many of us find ourselves in!
Do you want to learn how to become rich and build the life of your dreams? If you do then read the review of Wealth Beyond Reason and see how easy it can be.