How to Get Rich Lesson #1
My first article on How to get Rich was an overview of the theory and philosophy of how one accumulates wealth. Building a business, real estate investments, investment in stocks, etc.. are all ways that one can build wealth and accomplish the goal of getting rich.
There are many books and articles on how to get rich but one thing I have noticed is that they are big on theory and concept and are not usually specific on the actual steps one needs to take in order to obtain and build wealth. My series of articles will outline the steps one needs to take in order to get rich.
Pay Yourself First
The first thing one needs to do is to make sure you pay yourself first.
What I mean is to ensure that you are saving some portion of your wage slave income on a regular and consistent basis. This savings will serve as the building material for your wealth building activities.
Lets be completely honest here you have to have a bankroll in order to take advantage of the opportunities that are available for building wealth. Everyday I am presented with opportunities to invest or speculate and all of them require money to participate. No ticky, no laundry.
There Is No One Helping You Get Rich
Most people have a job where they go and exchange their time for an hourly wage or weekly salary. That is not how you get rich. You will note that when you look at your paycheck advice that various entities have their hand in your pocket. You have to pay Federal taxes, State taxes, SS and Medicare taxes, and there are deductions for health insurance if you are getting that through an employer.
You are left with the net difference. From this you have to pay your mortgage or rent, utilities, car payment, insurance, food, and all your other expenses. You will note that there is nothing on your advice or on the above list that says your savings.
No One Is Looking Out For You Except You
You of your own volition have to take this for action. You will labor for decades and you will always have the same deductions and same bills regardless of whether you save or not. You must not put this off because everyday that goes by that you are not moving forward you are not progressing.
History waits for no man and once time is wasted it cannot be reclaimed. Take my advice as I squandered a couple of decades not doing this. If you want to be rich you must carve out a portion of your income and place it into savings so that you can build a bankroll that will allow for the accumulation and building of wealth via business creation and investments. It is not to late to start but start you must if you want to get rich.
Make A Budget
If you have read my other articles on “How To Get Out Debt” and “How To Get Rich Without Slinging Rock” you will note that I talk about making a budget. You must start thinking of your personal financial activities like a business.
In a successful business one must measure what one wants to manage. This simply means, from a personal finance perspective, you must know what funds are coming in each month and how much is going out each month. Most people do not do this and it is a fundamental error in managing their money for several reasons.
The first reason is the one I stated above about knowing what is going on in real time with your funds flow. The second is that as you progress in your career or in building your business you will more than likely increase your income over the years.
One thing that tends to happen is that as your income increases your expenditures tend to increase if you are not paying attention. If you are not budgeting properly your spending will not be controlled and you will find that even though your income is higher your wealth does not increase.
Pay Yourself 10% Minimum
With your budget in hand you are now ready to pay yourself. You should strive to pay yourself at least a minimum of 10% of your income. Set up a savings account and have the money directly deposited to this account. That way you will not even see it and will not be tempted to spend it. I would even go as far as not taking a debit card on this account. Make it so you have to physically go down to the bank in order get the money.
Making things a bit inconvenient to access this money will keep you from impulsively spending it. You will not touch this account for any frivolous crap or bullcrap spending as these are the funds that will be used to create wealth.
You may be in debt and ask the question; “I thought you said the first thing to do was put all your effort into getting out of debt?” I did and you should but you should still pay yourself first. Saving is a learned behavior and must be done consciously and consistently over a long period of time.
If you are in debt than save $5 or $10 per week. You need to get in the habit of saving regardless of your current situation. Saving is habit forming. What you will notice once you start saving and you actually see your bankroll begin to build you will look for additional ways to save.
Excuses Will Not Get The Job Done
I have had this conversation about saving with many people who say they want to get rich and many of them will tell me that their bills are so many and so high they cant afford to save right now. To that I say very simply you do not want to get rich and you will not get rich.
That is a bullcrap excuse because what you are really saying is I do not want to make a budget. I do not want to take responsibility for my financial condition. I do not want to sacrifice a little in the present to have a better future. Go back to watching Netflix and wasting time on Facebook.
How do you think you will start a business or buy a rental property if you have no money? The Carlton Sheets no money down real estate program does not work. You need some scratch to get things going, even an online business.
I can guarantee you that if you are making no progress financially and you keep doing what is not working it will continue not working. If you want to be rich you must pay yourself first and you must start today.
“Do or Do not. There is no try” – Yoda
How To Get Rich Part 2