Quick tip for the day – pay yourself first. Read that and you’re done here, basically.
When I look back at my experience in the Amazon, there wasn’t many times animals would stuff things away for eating later. And the reason for that is because things go bad there, rot, pretty fast. So no opportunity for storing anything. Because of the abundance of food, and the tropic weather, animals don’t have to do that, though a few do.
But almost everywhere else you look in nature, it stores up something to use later. Even plants do this so they can survive when times get rough.
One thing Indians do along the Amazon, which made my parents crazy, was that the men and boys eat first. Women and children last. This was their culture, and for great reason – the men and boys protected the women and children. So here, they “paid themselves first.”
This is another “habit” you have to develop. Not something that will come automatically. And the best way to do it is to automatically have something come out of your paycheck. If you do it right, you won’t miss it and you’ll build a good nest egg.
I read to my kids the classic book, the Richest Man in Babylon, and even had an audio cassette with the book acted out. It was powerful and they still remember it 20 years later. Author George Classon made the point – Pay Yourself First.
And take advantage of the tax deferral here. Because of high and even multiple tax rates, money that you save or invest without being taxed accumulates at a rate of 30% to 40% faster than taxed money.
Self-made millionaires, according to Dr. Thomas Stanley, author of The Millionaire Next Door, are almost obsessive about accumulating their funds in assets like real estate, self owned businesses and equities that increase in value without triggering tax liabilities.
Put away 10%. It’s a start. Graduate to 15%. And then watch how your financial life will benefit and change!