Pay Yourself First

Well known political commentator and Fox News talk show anchor and host, Bill Oreilly plainly states that the reason behind his success in life, is his father’s adage “Whatever you make take off 15 % for yourself.” Bill states that this was “his tax”. Oreilly stated that as a result of the basis of this savings I could make decisions and get ahead where others could not.

A person without savings is nothing. He or she can not be independent either in their decisions, their employment choices or in dealing with their boss, their investments as well as investment choices and decisions and ultimately of their whole life.

Pay yourself first. Well known economist R. Z, Stern states “I ask my kids not what did you earn but rather how much did you save.” Ultimately it is not what you earn that counts it is what you keep for yourself. It would astonish you and your family at how many times in life you will come across individual people who have the appearances of wealth – but in the end it is just simply an appearance with nothing of substance. In reality these people may have next to nothing. Poor as church mice in any assets or savings. They may be earning big incomes but are being taxed big income and property taxes. Whatever they are taking home disappears like melting snow on a hot summer day, Big time payments on obvious flashy asserts such as the Lexus, Plasma TVs, luxury dinners and vacations. Although these people own things and have “owned” properties and assets, they were actually decreasing the value of these assets as they were paying for them. All a poor example of appearances, deception and plain foolishness.

The amazing part of this real life scenario is that the mentality of the type of these people is that they spend a great part of their working day planning and further scheming while thinking at “how smart they are”. A real good use of assets, time and energy.

However on the other hand there are people who although they earn a nominal income, save part of their wealth and are on the way to true wealth and personal independence. The secret. Whenever they got paid they “paid themselves first”.

The financial secret is like Bill Oreilly’s father’s adage. Save a portion – simply 10 or 15 % of the net payment first and foremost. Nothing complex about this. People live off what they earn generally. The money is gone. Not there to spend (at the moment). Then let the power of compound interest kick in.

These people who “pay themselves first “are far ahead. It is simple. All they had to do was easy and painless and arrange for their bank or credit institution to take pre arranged payments (P.A.C.).from their bank or checking account on a regular monthly, weekly or bi-weekly basis. What you don’t have you don’t spend. Why pay a monthly installment for some item, where you are charged regular interest and credit fees? Why not do the reverse and “pay yourself”.

In then end you will promptly and over the long term see your financial lot and personal independence improving. On top of that the powers of compound interest will kick and accelerate growth of your savings – your financial “nest egg”. This is true independence both in financial and personal terms.

Article Source: http://www.contentspool.com

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