Many times I've sat across from my clients and have asked them 'What is the first bill you pay." Most of the time clients will think and answer 'my mortgage' . They are assuming this is the answer a Real Estate Professional would want to hear. I then ask them 'why?". Always the clients mention that because it is the biggest and the most important out of their bills . I never disagree because it is true.
I then have them ask me the same question . They often expect me to give them a different answer, like pay the fire insurance before the mortgage. My answer is always the same . I pay myself first! Often times this is greeted with some confusion and I can see people thinking this guy is really very selfish. I know this because after I explain why they then tell me what the were initially thinking of my answer. I say let's take a pencil & paper and write out some figures. I say before i pay any of my bills I Pay myself 10 % of my income. A practice i have done ever since I was seventeen years old. I learned this from a great book and after finishing the book the author stated 'If you learn nothing else from this book always remember to pay yourself first".
Let's do this simple exercise to show you how monumental this simple practice can change your life forever. If you write down how much money you made last year and then calculate what 10 % of that is. You will say 'wow' ... Ex.... I made $45,000.00 last year and 10% of that is $4500.00 good chunk of change. Then I ask "from the amount you made how much do you still have ?' Most people sometimes laugh and say we'll i made about that much but i don't have that much saved i actually owe about that much on my credit card. Then I do step number #2 Let's suppose your're income stayed the same for the next 10 years how much is that ?.. We'll the amount is $45,000.00 ... A bigger number. The shocker to most people is that they are unaware how much many has passed through their hands. By simply putting away just 10 % a year would have changed thier lives. I know because by the time I was 21 years old i had saved and invested this 10 % that grew into a large sum of money that I then used to purchase my own home at a young age with a sizable down payment. .
If everyone begins to pay themselves 10 % every time and puts that money away not to be spent on a big vacation or a new huge wide screen plasma T.V. but invest the money wisely. To allow the money we labor for to make money for us. This is reason why most of us are heavily in debt. I hope that this little peace of advice can help everyone be the master of their finances and no longer live one paycheck away from total bankruptcy .........Thanks for your time......
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