How to get rich… - part 1: the 10% rule

 In the next couple of post we will try to define richness. And give you a new perspective of the possibilities there are available today.

What is richness?
First we need to define richness. For most people, the answer is: “Lots of money”. But that’s not all. What good is millions of dollars, if your health had suffered a great deal while earning them, or of you had to work so hard, that your family left you?

Richness is not only a matter of money in the bank, but also a question of:

- Health.
- Family and friends.
- Travel
- And achieving your goals.

All of these areas of your life have to be somewhat complete or fulfilled, before you truly feel rich.

Money:
For now we will focus on the money. Not that this is the most important area. But we’ll cover the other later.
First if you haven’t read my article Goal settings for beginners, I strongly encourage you to do so.
This will give you some techniques and help you achieve whatever goals you may have.

10% rule:
The first concept we’ll use is the 10% rule.
Basically it’s like this:

Take 10% of what you earn and save them.
Take 10% of what you earn, and earmark it for giving away.
Take 10% of what you earn and use it on you.

Now you can properly hear your inner voice saying “this is not possible, I cant set aside 30% of my salary”.
Well, you have to. What usually happen is, that the more you earn the bigger your expenses will be.
And therefore the sooner you get started, the easier it is.
It is much more harder to set aside $1000 from $10.000, than $100 from $1000.

Why it is so important to save?
Richness is a state of my mind, among other things. And when you know you have money put aside, it surely gives you this feeling of richness. And another very important benefit, is that the 10% gives you an opportunity to invest.

Why is it so important to give away then?
First of all, it feels really nice to give someone you love something.
Next when you are giving, it creates a very special and important feeling inside of you. The feeling of having more than enough.

And last but not least. You are important. You really need to buy something nice for you. After all you are the one who has been working hard for the money. So go get yourself something nice. Maybe something you’ve been wanting for some time now.

That’s all for now. Next we’ll take a look on the term passive vs. active income. Stay tuned.
Bye for now.

Categori: Finances