If you’ve ever wondered how the wealthy seem to grow their money while others struggle to make ends meet, you’re not alone. The secret isn’t locked away in some high-level financial strategy. In fact, it’s a simple, tried-and-true principle that anyone can start applying right now: Pay Yourself First.
What Does “Pay Yourself First” Mean?
“Pay yourself first” means making sure you set aside a portion of your income for savings or investments before you even think about paying bills, buying food, or splurging on that new gadget. Most people pay their expenses first, and whatever is left (if anything) is saved. But that’s exactly why so many people struggle to build wealth.
Why It Works
When you prioritize paying yourself first, you’re making sure that wealth-building is non-negotiable. It’s not about waiting to save what’s left—it’s about treating your savings like an essential bill that must be paid before anything else.
Imagine you make ₦200,000 a month. If you automatically set aside 10% (₦20,000) into a savings or investment account before touching the rest, you’re on your way to growing wealth. Over time, this simple habit can lead to massive financial gains thanks to compound interest and consistent contributions.
How to Start Paying Yourself First
- Automate Your Savings Don’t rely on willpower—set up standing order from your salary account to deposit a portion of your income directly into a savings or investment account. The key here is to do this as soon as you’re paid so that you never “miss” the money.
- Start Small, but Stay Consistent Even if it’s just 5% of your income, the important thing is to start. Once you build the habit, you can gradually increase the percentage (the goal should be 25%). You’ll be amazed at how much can accumulate over time.
- Invest in Yourself Savings accounts are great, but consider investing in assets like stocks, bonds, or a business which grow in value over time. These investments can work for you while you focus on other things.
- Eliminate Unnecessary Spending When you pay yourself first, you might find that you don’t actually miss the money you’ve set aside. What’s left is more than enough to cover your needs—and you’ll be less tempted to spend on things that don’t help you achieve your financial goals.
The Long-Term Impact
By prioritizing yourself, you’re setting up a system that can lead to financial independence. Over time, that money you set aside grows, and eventually, it can generate passive income. Imagine earning money in your sleep! This is how the wealthy think—and now you’re on the same path.
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