WHY PAYING YOURSELF FIRST IS THE MOST IMPORTANT THING !!!
Chances are you’ve heard of the concept that you should “pay yourself first”. But, do you really know what it means? Do you know how much you should “pay yourself first”? Where you should put that money? Even if you know all this, is your plan automatic? This topic will cover these important ideas.
Why would you wake up in the morning, leave your family, not do what you want to do with your day, go to work all day long for 8, 9, 10 hours a day, commute back home, get up and do it all over again? Why would you do this 5 days a week, 4 weeks out of the month, 12 months out of the year? Why would you do all that to earn money and not pay yourself first? Most people pay everyone else before themselves: the government, their creditors, and their bill collectors. Everybody else gets paid first and then if anything’s left over, then they pay themselves.
That system stinks and is designed for you to fail financially. If that’s the system you’re using right now, and you don’t have money, that’s why. The odds are set up against you. It’s too tough for you to get rich if you’re paying everybody else first. You need to change this. You need to completely redirect your income so the first person who gets paid is you. What you need to do is pay yourself first automatically. See, if you take the money automatically out of your paycheque and pay yourself first, then you are living on what’s left over and you won’t need a budget.
Let’s say you make $20 an hour. How much money did you earn this week? Let’s say it’s $800 during the week. Of that money, how many dollars did you pay yourself first with?
If you’re not using a retirement account, a pre-taxed retirement account, a retirement plan or if you’re self employed and are not using a self-employed retirement account, then you didn’t pay yourself first at all. The average person in developed country saves less than 22 minutes a week of their income. Putting it another way, the average man saves less than 2% of their income. Now again, why would you work all week long and not have some of the time in your day go to you?
The first hour of every day that you work should be going to you. Thats how you will start paying yourself first.
Above concept has been taken from book The Automatic Millionaire by David Bach.
Happy Learning !!