Pay Yourself First! A part of what you earn is yours to keep.
When you give someone a book, you don’t give him just paper, ink, and glue. You give him the possibility of a whole new life.
– Christopher Morley (1890-1957)
Pay yourself first – A part of what you earn is yours to keep !
I learn this golden rule from one of the best inspiring book on personal financial thrift and wealth building, “The Richest Man in Babylon” by George S. Clason, written in 1926. As in the above quotation, I would like to share with you the possibility of a whole new life if only you take the trouble to get the book and read it. Just browse in the Bookstore and if you like purchase and read it.
Pay Yourself First.
One of the most important thing that we need to do to achieve financial freedom is to form the habit of “paying ourselves first” instead of paying ourselves last. We could work all our lives for money, trying to make ends meet, living month to month, paycheck to paycheck and like most people, realizing there is too much month left at the end of the money.
Instead of working hard for our money, we could learn to make our money work hard for us. The trick is very simple but it is not easy for most people to do. What is the trick, you might ask ? Everytime you earn a dollar, you should make sure to pay yourself first. Simple, isn’t it.
The first cure for a lean purse is to fatten your purse. How do your fatten your purse then? “ A part of what you earn is yours to keep”. Here, the lesson is to pay yourself first. Most people think that when they get their paycheck, the first thing they should do is pay their mortgage payments, the car installments and all their other bills – and then if there is anything left over, they can save a few dollars. This is really silly. In other words, pay everyone else first and yourself last. Aren’t you important ?
In my sharing with people, I often asked them, whether they possessed a car, and whether they purchase outright or through financing. Almost all of them inevitably answered that they purchase through financing. The next question, I asked, is whether they must pay their installment in full without fail, every single month after month of their loan tenure. The answer is a resounding “ YES “ Then I asked them who or what is important! Are they more important or is the car more important.? What about you? Are you more important or your car is more important than you?
Well, you have answered correctly. Yes, YOU are more important. Without you, there is no car. The car is irrelevant and non-issue if you are not around. Since they answered that they are more important than the car, I then probe them with this question? Do you pay installment to yourself without fail every each month? Invariably, I always get a dumb folded look on their face. Most of them answered NO ! My final question, Why Not ? For those who understand, they realize their folly of not putting aside a few dollars for themselves, paying everyone else first and themselves last.
Save and Invest at Least 10%
Resolve today that you are going to Pay yourself first. How much must you pay yourself first. For a start, at least 10% of what you earn each month. Save and invest at least 10 percent of your income throughout your working life. Take 10 percent of your income off the top of your paycheck each time you receive one and put it into a special account for financial accumulation. This will become your financial freedom account that will become the “ Golden Goose” that will lay your golden eggs in the future.
The fact is that if you save just $100 a month throughout your working lifetime and you invest money in an average mutual fund that grows at 10 percent per annum, you will be worth more than 1.4 million dollars by the time you retire over 35 years. This means that anyone, even a person earning minimum wage, if he or she starts early enough and saves long enough, can become a millionaire over the course of his or her working lifetime.
Develop Lifelong Habits
Developing the lifelong habit of saving and investing your money is not easy. It requires tremendous determination and willpower. You have to set it as a goal, write it down, make a plan, and work on it all the time. But once this practice locks in and becomes automatic, your financial success is virtually assured.
Remember, a part of all you earn is yours to keep. I teach all my four children, since they are very young, to start fattening their purse and pay always themselves first. How much ? At least 10%. I have formed a habit of paying myself first and now it becomes so easy to accumulate and make my money work hard for money, instead of me working hard for money. Poor people spend first and pay themselves last. Rich people, pay themselves first and then spend. The difference is not in the amount, but what they do with the money. Final word of advice – Always pay yourself first !.
In my next post, I will share with you the 2nd rule from The Richest Man in Babylon.
Hope you enjoy my sharing. 
By Michael Tay www.michaeltay.com
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