Have you paid yourself yet?
Of all the tips in wealth building, this is absolutely my favorite. It is also the most powerful tip when it comes to building wealth. Not only will it empower you, it will also make you wealthy.
What does it mean to pay yourself first? Quite simply, it is taking a specific amount of money, on a consistent basis, and putting it to work making money for you forever – before you do anything else with your money. The initial amount is not as important as the consistency to begin with. And, consistency will happen when you make this a habit. The easiest way to make this a habit is to set up a reminder to pull out a percentage (or set dollar amount) from your paycheck as soon as it lands in your bank account. If you do this before you do anything else with your money, you will be setting your future-self up for success! I know for me, I had every reason in the book why I had to spend those dollars rather than put them (and leave them!) in a wealth building account. Until one day when it became crystal clear to me that without developing this habit I was not going to achieve the financial goals I had set for myself. I have lifestyle goals, contribution goals and legacy goals; all of which require money. There will always be a reason NOT to do something. There will always be excuses. But, when you are able to tap into your deep inspiration, and your why is meaningful enough, you will be able to prioritize this habit and give that gift to your future-self.
Have you ever heard the question “which would you rather have; a penny doubled every day for 30 days or a million dollars on day thirty?” If you’re looking to make the most money in a thirty-day period, then the answer to this question is actually doubling the penny daily for 30 days. You will end up with … (are you ready for this??) $10.7 MILLION at the end of the thirty days, by simply doubling the initial penny each day. Albert Einstein taught us why when he taught us the power of Compound Interest. Compound Interest is a mathematical concept we learned in grade school. The magnitude of the power of this concept is not something you will realize unless you put it to work in your life. You must experience it.
So my question to you is: If you are not doing this, why are you doing what you are doing? When you get up in the morning to do the work you are doing, what is your why for doing it? Paying yourself first is a mindset. It is one of the ways the wealthy become wealthier. There is something in the “doing” of this that will affect how you think about and behave with money. It’s not a get rich quick scheme. It takes time. However, it will make you wealthy. Not to mention, it will increase your ability to form positive habits for yourself, which will pay off deeply in all areas of your life. Start with this and see what happens.
“The most powerful force in the universe is compound interest” – Albert Einstein