Pay Yourself First- The #1 step to begin building WEALTH

“The first cure i did discover for my lean purse: For each 10 coins I put in, to spend but 9”.

This is a quote taken from the book ‘THE RICHEST MAN IN BABYLON’ which is a classic, thought provoking story of the simplicity of building and preserving wealth. The above quote represents the simplistic truth of PAYING YOURSELF FIRST- “A part of all you earn, is yours to keep”. Also known as saving a part of your income, following this philosophy is the first step you must take to building your fortune. Whether you make £100,000 or £10,000, you must put aside a certain amount before spending your earnings if you desire to develop personal wealth. For example if you make £4000 per month but spend £4000 per month on expenses, you have accumulated £0 for the future. Whereas if you earned only £2000 per month, spent less, but paid yourself £500 each month, by the end of the year you would have accumulated £6000. Of course the more you earn, and by keeping expenses low, you will be able to increase the amount that you are able to accumulate.

Putting aside a part of your income is essential in creating a position of financial security and independence for yourself. Most people are so eager to spend the money they earn on short term desires and luxuries, however it comes with a big price in the long term- having no money left over.

In this book “‘The Richest Man in Babylon’ you will find these 7 SIMPLE RULES OF WEALTH AQUISITION:

  1. Start Thy Purse to Fattening

  2. Control Thy Expenditures

  3. Make thy Gold Multiply

  4. Guard thy treasure from loss

  5. Make of thy dwelling a profitable investment

  6. Insure a future income

  7. Increase the ability to earn

Master the first step, allowing yourself to accumulate a portion of your earnings; then by keeping expenses minimal, taking actions to preserve and protect your money. You will then be able to apply strategies in order to multiply and allow your money to work for you through assets, investments and business. At the very least, having savings as a cushion is extremely beneficial for anyone. If you have £20 in your bank with no assets and lose your job, you are in a bad situation. Whereas if you had £10,000/50,000/100,000 saved, you shall not struggle one bit with the cost of living.

Have a read of THE RICHEST MAN IN BABYLON, for it is a very short book that will give you the most straight forward principles on building wealth. It is a classic I recommend everyone read. Often times, simple is better than Advanced, complicated strategies!