This idea of paying yourself first is simple yet quite profound. The idea is that whenever you’re paid a salary on any other income you remove at least 10 percent of this amount and pay yourself first. Specifically you pay your future self for services you’ve rendered in the past. Paying yourself doesn’t mean going out and splurging on yourself. Paying yourself means investing in yourself for the future. It is like the farmer who spares some seed from his harvest for planting the next season. A wise farmer doesn’t sell or eat all his harvest. A wise farmer knows that part of the harvest is kept for his future well being. A foolish farmer eats all his harvest.
When we get paid we usually rush to pay off bills like rent, fuel, shopping, etc. Before we know it the money is finished. The challenge is you have not paid the most important person which is you. You are the most important person in your financial well being. You are the one who is waking up early morning every day to go to work. You are spending hours in traffic jam. You’re withstanding all the stresses of work and employment. You’re making huge sacrifices on behalf of everyone. You deserve to get paid first.
Whenever you receive your salary/income remove at least 10 to 20 percent and save it in a secure investment account like a unit trust. This is your money which no one else can touch. This is evidence that you went to school for decades to pursue a career. This is evidence that you’re foresighted. This is evidence that you value yourself so much to preserve some of your labor.
Now this money which you save is going to work for you. You have now employed a portion of you current labor to begin working for you. And money is a worthwhile laborer and servant. It works diligently for you without complaining. Even when you sleep this money you have put in an investment account will produce more laborers in the form of interest. The money will keep multiplying without any effort on your part.
This is how rich people think. They know how to multiply their labor through saving and investment. The rich can live several lifetimes by carefully employing their money to different causes. We can fast track our journey to financial freedom if only we paid ourselves first.