What is the easiest way to build your personal wealth? Get a systematic savings plan that is out of mind out of sight. In almost 20 years of giving personal financial advice, I have found that the wealthiest people I know have an interesting habit. They bank like a bunny.
If you think about it, your family finances should run just like a business. That makes you the CEO of your household. Consequently, the first bill every month should be YOU. That is the concept known at the pay yourself first rule. No matter whether you start with 1% or 10%, the real key is seeing yourself as the first bill of every month and not the last bill.
People who can’t save often say that they are living paycheck to paycheck. Or, they will comment that they aren’t sure where the money goes every month. Thus, there is never any money left over on an ongoing basis to save for their financial goals. Amazingly enough, if you move the pay yourself first rule, you figure out as a business on how to make your bills.
This is true for business owners as well. They typically won’t draw a salary in their business until they pay all their bills. This makes it even harder to figure how to price your product or what amount to charge for your service until you build in your salary as the pay yourself first rule.
Once the saving begins, try to slightly ratchet it up every three to six months. Before you know it, your personal wealth will begin to add up. As Rockefeller once said, “To turn $100 into $100 is hard work; to turn $100 million into $110 million is inevitable”.
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Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
Co-CEO and Founder oXYGen Financial, Inc.
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oXYGen Financial, Inc. co-CEO Ted Jenkin is one of the foremost knowledgeable professionals in giving financial advice to the X and Y Generation.
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