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| It's an old saying, but "Pay Yourself First"!!! |
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| signupmoney |
 Posted: Wed Mar 16, 2005 4:48 am Post subject: It's an old saying, but "Pay Yourself First"!!! |
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Investing Sr. Associate
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The saying "Pay Yourself First" has been around for such a long time I think people just forget about it.
MOST people recieve their paycheck, pay the rent (house payment), food, utilities, etc. and in EVERY single case I have ever seen (for those trying to save), they always have $0 left and it doesn't matter how much money you make.
When I was doing financial planning I will show 2 extreme's. 20-25 years ago I ran accross a client who then made $327,000. This guy had to borrow money every year to pay his income taxes. He made 327 but spent 350. Then another client making $12,000 a year as a janitor had a $500,000 apartment building PAID FOR!!!
Client A wasn't about to change his lifestyle and habits, maybe selling his water front home or airplane, both of which he could NOT afford. I never took him on as a client. Last I heard after his divorce he was living in a 1 room apartment close by and destitude.
Client B remained a client of mine until the day he died and instead of me teaching him much he taught me a lot. He lived in a 1 room apartment (in his own building) had 2 changes of clothes and lived like a pauper. Now I never wanted to live like that (and most people wouldn't either) but I was very impressed with him banking 80% of his paycheck. He started out banking 5%, then 10% and so on.
I started Paying Myself First after I met him. Getting started was (and is) very difficult to do since I (and you) was already accustomed to the way we live. EVERY paycheck I received I took 5% to pay me first, which grew to 10%, 20% and so on. Now (and for a long time) we bank 100% of my wifes income and live on mine and we are both comfortable with the situation.
Again, getting started is hard to do but once you do, it becomes addictive and the %'s increase. If you are not doing something like this then what will change in your life 1 year from now, 5 years, 10 years? Any fool can spend 100% of their paycheck (or more) no matter HOW much money they make, and most do!!! Think of it this way. You get a A for paying the mortgage each month on time. Another A for the food bill, an A for utilities, etc., but you get a F for paying yourself. Next week instead of sitting down to pay bills, give yourself an A by putting YOU at the Top of the bill list and PAY YOURSELF FIRST!!! Maybe when you get to the bottom of the bill list you might find that the 370 channel (exaration) cable bill could eaisly be replaced by a more important priorty, yourself.
Sorry, to go on and on about this, and sound like a preacher, but in 25 years of financial planning I found that close to 95% of people never pay themselves first, live paycheck to paycheck, and ARE 6 paychecks away from being homeless. That's scary!!! My father had a saying. "Most people are too busy making a living instead of making any real money"! Think about it. Hope this helps. |
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| noksagt |
| Posted: Sun Mar 20, 2005 12:53 am Post subject: |
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Member of the Month! March
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| It surprises me that people can spend so much money so quickly. My pay check is direct deposited into a high-yield savings account and, through some frugality, I rarely spend half of it. I happily watch my savings accumulate (of course moving some into higher-paying investments frequently too). |
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| signupmoney |
| Posted: Sun Mar 20, 2005 6:10 am Post subject: |
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Investing Sr. Associate
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| noksagt wrote: | | It surprises me that people can spend so much money so quickly. My pay check is direct deposited into a high-yield savings account and, through some frugality, I rarely spend half of it. I happily watch my savings accumulate (of course moving some into higher-paying investments frequently too). |
What surprises me is the amount of money that literally passes through everyones hands in a working lifetime, and in the end, the small amount they are left with (in most cases). I learned along time ago (just do the math) that MILLIONS of $$'s were going to pass thru my hands during my working lifetime and that I was determined to keep a LOT of it. |
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| trixiezzz |
| Posted: Sun Mar 20, 2005 6:15 pm Post subject: |
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Investing Manager
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| And you know, you look back over a lifetime of working and you're left with a house full of clutter....with very few items becoming anything precious that you really are glad you bought! |
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| paula0000 |
| Posted: Wed Mar 23, 2005 2:44 am Post subject: |
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Investing Manager
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| It really reminds me of the ideas that are written about in"The Wealthy Barber". We were talking about this on another thread. If you ever get the chance to read it- it's a wealth of info! |
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