Stop Eating Leftovers...

re: Financial leftovers- is your wealth strategy based on junk food?



by Teresa Kuhn, JD, RFC, CSA
President, Living Wealthy Financial

           Stop giving yourself the crumbs!

I recently read an article in Business Insider  outlining some of the ways in which wealthy people differ from average people both in actions and mindsets.

For example: while many of us are consumed by saving and being as frugal as possible, most self-made millionaires are busy looking for ways to EARN more money and then put that money to good use-making even more money.

A study of over 1,200 wealthy people conducted by Steve Siebold, a self-made millionaire and author ("How Rich People Think.") concluded that the vast majority of millionaires did not fall prey to the same "nickel and dime" mentality that plagues the majority of Americans.

Indeed, even in the toughest times, when others are cutting back, laying off workers, halting research and development and investment, these entrepreneurs are searching for ways to profit from the shaky economy.

According to Siebold, when a business owner or individual is so consumed by searching for ways to trim expenses, they often miss huge opportunities to grow their wealth.  He also maintains that most of us fall victim to old school thinking when it comes to the pursuit of financial prosperity.

Writes Siebold in "How Rich People Think":

"The average person believes the harder they work the more money they’ll make. Their linear thinking equates labor and effort with financial success. This is why most people aren’t rich. They’re following an outdated model of success and are confounded when they reach middle age with little money to show for twenty years of hard work." 

Another obstacle to financial success (perhaps the BIGGEST one of all) is that few of us abide by that very excellent piece of advice:

Pay yourself FIRST!

I can't overemphasize the fact that this one simple action has profound consequences for your financial future.  Yet, an overwhelming majority of people continue to feed their wealth with "leftovers and crumbs."  They sit down, pay all their bills, and give themselves whatever tiny portion remains.

This is, according to Siebold and other experts, a self-defeating mindset.   No wealth happens until you reach a point where you have made a firm commitment that, no matter what, you will pay yourself before you pay anyone else.

Paying yourself first, of course, is not the same as spending on yourself.  It is simply a discipline where you set aside a payment to yourself before you take out any other funds.  You are, in essence, treating yourself like a creditor.   Setting up a system to "bill" yourself can help cement this habit, as can having an automatic deposit made from your check into a savings account.

I realize that the high cost of living and flat paychecks are the prime reasons people can't seem to find the cash to pay themselves or start emergency funds.  However, when I have sat down with clients and they've been honest about expenditures, I have usually found places where money can be saved and used to pay themselves.

The point of all this is that if you really want to achieve financial independence, you MUST change and adopt the habit of paying yourself first.

For many of my clients, having Bank on Yourself policies in place is the ultimate way to make sure you pay yourself first, consistently, EVERY month.  Having money automatically deposited into a BOY policy allows you to pay yourself and achieve safe, steady growth of that money without having to expose it to Wall Street turmoil.

If you want to move from giving yourself crumbs and leftovers, call us and ask how hundreds of my clients have discovered a better way to pay themselves first...every time.

(800) 382-0830