Have you heard of the theory of pay yourself first? Many of you may been thinking that almost everyone is paying for our own bills or buying something for ourselves is considered as paying yourself first but this is not actually the case. The first time I had heard of this method was actually through a book called Rich Dad Poor Dad by Robert Kiyosaki. Initially, I do not really grab the idea of what does it actually means to pay yourself first when you are earning the money through working for others but I slowly get to know it clearing through reading books, attending seminar and listening to audio books.
You will get a better idea if you really keep on learning through the journey of success in life and I should say that I am slowly starting to understand the true meaning of paying yourself first. From the Rich Dad Poor Dad book, it mentioned that people normally pay their bills, fees, mortgages and other payment first whenever they received their salary from their job. What they will do next is buy what they want with whatever left over and save the leftover money after spending. This usually become a cycle as they do it every month and almost every year without much money left to try and make a difference in their life through becoming their own boss or even making any significant difference in their financial status.
The next great mentor that I learned about the pay yourself first method from is T.Harv Eker. I have read his book “Secrets of The Millionaire Mind” and attended his Millionaire Mind Intensive (MMI) Seminar where he taught how to set up different set of money jars where you can manage your money better. Personally, I have implemented his money jars method and trying to fine tune my finance as I have quite a few debts that I need to settle but I can say it is very useful to me as it motivate me to check on my own finance along my journey to success.
Another place I got to know about this method is through the audio book “The Richest Man in Babylon” where it mentioned to save 20 percent of your salary every month and pay off your debts and bills after paying yourself first. I got to know this theory more in dept after listening to the audio book “The Law of Success” where it mentioned the importance of consistently saving a percentage of money every month as this will helps us build more confidence in ourselves and our sub-consicious mind will feel motivated also when we consistently see growth in our financial portfolio.
The most recent reading that I found that really stunned me is another book by Robert Kiyosaki, “Increase Your Financial IQ”, where he mentioned that the amount of money he pay himself first is about 80 percent of his monthly income. Can you imagine how much money that is to a multi-millionaire? He started with a small percentage of 10 to 20 and now is 80 percent. It is mentioned in his book that the purpose of paying yourself first is to let you create the opportunities for yourself by preparing your money in advance and it will somehow build up your confidence in a way. Robert Kiyosaki also mentioned in his book that it is important that we start with a percentage that will make us feel uncomfortable so that we will not sit in our comfort zone and stop thinking about making more money to grow our own financial mean. Remember no matter how small the amount is, set a percentage that will make us feel uncomfortable with and once you feel comfortable with it, increase that amount as this proof that you have managed to find ways to counter the problem of not having enough to use.
As I have shared with you so many sources of great successful people mentioning about the importance of paying yourself first, you should start building your own financial freedom account and no matter how small the amount is, make sure it stretch your mind and create some stress in your monthly finance. This will make you think twice about spending the amount of money you have left behind after saving and let your mind think of more ways to grow that dollar.
Personally, I have set about 23 percent of my salary in my saving account and you may be thinking why I have such a weird figure. The reason behind it is I do set aside some money with my girlfriend for our joint account and I do have my personal saving portfolio which I put money into. I will update again on this topic in future if I do make any significant increase after creating a permanent passive income stream.