Some of the richest people in the world are at the top because they made strategic decisions. Whether it was to invest in a business, start a business or manage their money. Each business decision is taken with careful calculation of risk and advantages. Not to say that they do not take risks and play it safe all the time, but they also have a strategy to recover if a decision backfires.
One of the most important rules that millionaires live by is that a part of what you make is yours to keep. Millionaires pay themselves first. By not spending on taxes, paying people back or other expenses, they ensure that the hard work they put in comes back to them, even if it is in the form of a small amount. When you earn and immediately spend everything, there are no savings. You live from paycheck to paycheck, without any sort of financial stability. This instability becomes a source of constant stress and worry. To increase wealth, you have to become committed to the goal. Let us show you how.
The golden rule of saving money
The golden rule of saving, followed even by bigwigs such as Warren Buffet, says that 10% of whatever you make should be yours, either in the form of savings or paying yourself. Why 10% you ask? It is not an arbitrary number that somebody dreamed up. 10% is a low enough number that any individual can safely save that much from their salary. It is a good number for when you are starting to save money.
Even if you think you can’t survive on the remaining 90%, you can. All you have to do is to start saving and you will figure a way out. Who knows, you might eventually take that savings up to 20% or even 30%.
Once you build your savings
Miracles don’t happen overnight. Implementing the golden rule requires patience and practice. If you have high expectations in the very first month you begin to save, you might be disappointed. If you earn Rs. 10,000 each month, you will save Rs. 1,000. But over the course of 12 months, you will have saved Rs. 12,000, which is a pretty big amount.
Once you build your savings, you can then decide what you want to do with it. You may invest in a mutual fund or company stocks. It has to become a life-long habit for you to build up your wealth.
Financially secure future
You cannot succeed if you don’t stay focused. When you take the first steps towards a financially secure future, changing your mindset will be one of the most essential things you do. One might ask what difference does savings before or after paying essential expenses make? Again, it goes back to your mindset where you keep savings on top. Your future depends on the choices you make now, and the more disciplined you are with your choices, the easier it will be to build a better future. No matter how much you make, if you don’t save, you won’t be wealthy.
This is a long-term strategy that takes time and patience to build up to a secure future. 10% is a risk most people will be able to take. Even if they decide to invest their 10% of savings and lose a little money, it is not a big enough amount to cause panic. Once you get started, it will become a goal in life. There have been numerous people who have made this a goal, asking themselves how much more can they work to earn more and subsequently save more. You can be one of those people too!