SAVING AND INVESTING

SAVING AND INVESTING

For anyone who wants financial success good money management is important. This is an important secret of riches and wealth.

People who have jobs or business should try to pay themselves first when they receive their income. At least they should pay themselves 10 percent of their income; they should pay themselves before they pay their bills, or do anything with the money they receive.

Lets say they earn $500,000 a month, 10 percent will be:

$ 500,000 * 10/100 = $ 50,000

START SMALL

Realistically It might not be easy for many people to pay themselves 10 percent of their income, for some reasons. So it’s advisable that they start by paying themselves just 5 percent of their income. This money shouldn’t be touched, for any reason until it accumulates to an amount that they can invest.

This is vital because many people remain poor because they don’t pay themselves first, this people spend everything they earn in addition to loans they collect. When they are paid they start paying the debts they have accumulated, at the end they have very little to use for the month before their next pay. In a short time they finish the money they have and start collecting loans again; it now becomes a never ending cycle.

BREAK THE CYCLE

To break this cycle one must pay him or herself  first. In the classic book Richest Man In Babylon written by George .s. Clason says this:

            “The cure for cure for a lean purse ....   For every ten coins thou placset within thy purse take out for use only nine. Thy purse will start to fatten at once and its increasing weight will feel good in the hand and bring satisfaction to thy soul”.

This is very true! If one earns $10 a day. One should pay himself $1 before he spends the rest. This one dollar should be paid into a savings account every day. As the days multiply the account balance will fatten. If someone does this for 30 days, one will have $ 30, for 365 days (1 year) will be $ 365.

Saving is the first step, one will need to invest this money wisely so that it can multiply and continue to multiply. 

Finally anybody who uses this principle of saving and investing in addition with the other principles I have just discussed about is sure to succeed in life.

To use this principle of saving and investing one must control his or her expenditure, than to delay immediate gratification. It takes self-discipline to save a percentage of what one makes on a monthly basis. It may be difficult but it must be done, this is one of the ways Warren Buffet the world’s richest investor became rich, if he did it so can you.

Thank you for reading this book to this point. It shows that you really want to succeed in life and I will be committed to making you succeed. Please join me in the general conclusion in the next page.