- Save 10 Percent to Create a Stake:
‘’To start on the path of Wealth, put aside 10% of your first income every month”
There are hundreds of ways to make money. You can work for many different types of companies or government agencies. You can manufacture something. You can farm. You can provide a service. The Possibilities are endless. But no mater how much you earn money, pay yourself first.
A simple guide is to put aside 10 percent of your income before you start spending. ‘’Of course, saving 10 percent takes discipline, the nice thing is that, as it gets to be a habit, you don’t really miss the money you are saving. And soon you will feel proud of your saving 10 percent every month. In contrast, you will hardly remember what you spent the other 90 percent on.’’
Click here to See ways to save money effectively
2. Budget to Control Your Spending:
“Control Your Expenses with a Budget”
Law 2 relates to Law 1. Everyone has more things they’d like to buy than they have money to spend on them. And no matter how much you spend, you will still have unfulfilled desires waiting for the next available money. Because desires are infinite.
“Create a budget for what you really have to spend every month. You don’t really have to have new clothes most months, you don’t have to eat out. You will room in your budget for some of these expenses but don’t let them just happen.
There is an interesting phenomenon with budgeting. If you keep a diary of every penny you spend for a month, two things will happen. First, you will cut back on the little expenses like buying soft drinks or a snack because its too much trouble to write them down. Secondly, you will see how much a cup of coffee or a pack of cigarettes adds up each month. You will see how you can save money just by changing some of your habits.
Most times, people think a budget would turn them into a slave or a robot, draining them of all the pleasures of life but they should note that a person with unplanned spending, lavish lifestyle usually ends up to be the one without money and that makes them a slave to either his job or his creditors. You are the one that sets your budget. Your budget can become your slave, it can protect you against from temptation to spend money on low priorities. And if you want, you can include some ‘flex money’ in your budget to indulge yourself occasionally.
3. Make Your Money Work for You:
“Put your money to work for you”
Having money to work for you is how you build your fortune. If your money sits in the bank, it can pay you anywhere from 1 to 14 percent a year, depending on the prevailing interest rate and other factors. While bank accounts are safe and guaranteed by the government and corporate organizations, they will always define the lowest return you can safely receive on your money.
“Your true wealth is not in the money you earn. It is in making your money work for you”
The rich man in the “The richest man in Babylon” was a money lender and the only examples of how to put your money to work were based on lending.
How you use your savings to work for you depends on your interests, your opportunities and your creativity. You will have to think hard and experiment to find the money-making opportunities that fits your abilities and interests.
You can put your money to work for you by (1) investing in rental properties, owing and leasing properties to people at a fee, (2) Starting your own business, (3) investing as a silent partner in a business venture, etc. But in doing all these you must be ready to accept risk.
4. Protect Yourself Against Loss:
“Seek safety in your investments and the advice of the successful”
When you have extra money, you will be sorely tempted to spend it or to invest in schemes.
Not losing what you have is key to building wealth. Don’t be misled by your own desire to make money fast. And be especially careful of other people who try to help you invest your money. The advice of people who do not regularly make money is usually worthless.
5. Make Your Home A Profitable Investment:
“Own your own home”
If you are saving 10 percent of your income and spending 90 percent, any part of the 90 percent that you can turn to an investment is an extra advantage. If you rent, you are making profit for your landlord plus you are not enjoying the pleasure of controlling your own space. There is something special about having your own yard, and the ability to do what you want in it without permission.
6. Plan for Your Retirement:
“Provide for your Old age, your health and the protection of your family.”
Setting aside money in a retirement plan is wise in two ways. You ensure that there is money for the future and you ‘grow’ that money without paying taxes – You only pay taxes on it when you withdraw it.
Life insurance provides for your family if you or your spouse dies.
7. Increase Your Earning Potential:
“Cultivate your own powers. Increasing your knowledge and skills
increases your options and earning power”
Your most valuable asset is your knowledge. Many people with 20 years’ experience on the job actually have only one year of experience repeated 20 times! If You want to earn more, you need to increase your knowledge and your skills.
If your current Job setting doesn’t value your new skills, usually another will. Investing in yourself will put you ahead of your peers.
If you work for yourself, then you know what training you need to enable you to serve clients better or capture new and interesting work.
Wealth is not a single animal that all men must chase and only one may catch. Wealth grows for all as more people apply the principles of wealth. As all produce more, all can enjoy more.
See Important skills to learn if you want to earn more
See you at the top!
Share this post