WORTH $1 MILLION (and more)… Darren Hardy's recent bestseller "The Compound Effect" reminds us of the power of putting away 10% of our income every month forever. He tells a great story about how he helped his then assistant Kathleen do so 1% at a time. Techniques like bringing her lunch to the office, cutting back on magazine subscriptions, making her Starbucks in-house versus a $4.70 latte, etc. Slowly but surely she got to the 10% number by eliminating unnecessary expenses in her day-to-day life.
This is not a new concept, financial advisors have been sharing this wisdom for decades… "The Richest Man in Babylon", "Think and Grow Rich", "The Wealthy Barber", "Secrets of the Millionaire Mind" are just a few of the books that espouse this approach. This approach is not up for debate. In order to create financial freedom it is an absolute must…
Save 10% of your earnings every month… NO Excuses
Here is your ACTION STEP…assuming you have accepted the 10% rule you must then overcome your tendency to introduce all your "yeah buts" that have prevented you from doing so already. Here's some ideas to make it happen:
1. Calculate what 10% of your monthly income is. Have a specific number in mind
2. Commit to creating a system that will ultimately allow you to save this 10% every month
3. Open a bank account or create a savings vehicle that is "untouchable". Someplace that when the money goes in it is very difficult to take out
4. Now for the fun part… start keeping track of every penny you spend. Keep a daily journal. Every coffee, every chocolate bar, every tank of gas, every lunch… everything!
5. Study this journal and start identifying areas where your money went that could be eliminated. Just like Kathleen did in the above example. Eliminate the waste!
6. Pick one or two items for the first month and put the money in the untouchable savings account. Start small…1% at a time. Get excited about this! Fall in love with the idea of succeeding using the "10% rule".
7. Build up momentum and start adding more new 1% items the following month. Within one year you will be saving 10% of your gross income and you won't even notice the sacrifices you made. Like Kathleen, you'll discover that most of them are wasted funds anyway.
Think of it this way, one of the best gifts you could give your children would be to have them create this habit very early in their lives. By the time they are in their early 40s they will be automatic millionaires! The best way to get them to do that is to do the same yourself. Set an amazing example for your children to follow. You can do this for yourself and for them. Remember that this concept is Not Negotiable. Also remember that it is very doable by following the above steps. Do you really want to worry about money for the rest of your life? This is the solution and it works every time… guaranteed. There is absolutely no risk. NO Excuses.