Our first featured author is David Bach. He has written 9 books now starting with The Automatic Millionaire. I last reviewed his latest book, Start Late, Finish Rich. One of the key disciplines that Bach teaches is paying yourself first. In this latest book he suggests that if you start late in the savings game you have to save more. His first suggestion is that you save an hour a day of your income – that comes to 12% of your gross income. That is pretty difficult for someone starting out. If you do not save anything now, or not much now, moving directly to 12% can be very difficult because most people live at or above their means, that is, they have commitments for most of their income with little or nothing left over to save.
Here is a tip on how to get to that 12%. Don’t stress over it and think you have slash your spending budget over night to save 12%. The important thing is not how much you save at first but instead is developing the discipline to save first and spend second.
As Bach points out poor people spend their money and save what is left, which is usually nothing. Rich people save first and spend what is left. This is the key. So start out small. Even if you can only save 1% of your income that is far better than nothing. Start with 1% and slowly increase it as you earn more and as you identify more ways to save money. The book gives you lots of great tips on how to do both.
Remember, one of the keys to building wealth is to pay yourself first. Make it automatic. Start small so that it is not too painful or unrealistic. You do not want to give up. Keep increasing your savings amount, bit by bit until you hit that 12%. Then as Bach instructs work on increasing it further. An ideal goal is to slowly work up to saving 20% of your income. It can be done. Just start slow and keep moving up. Do not go backwards and do not stop. At first the accumulation will look very small and very slow. Over time however it will build up. (See page 91 of the paperback edition for more information). Buy the book below.
Wishing you Success and Prosperity,Wishing you well,
Daniel R. Murphy
Daniel R. Murphy
Educating people for building wealth, adapting to a changing future and personal development.