Pay Yourself First
The concept of “Pay Yourself First” was made popular in the book “The Richest Man in Babylon ~affiliate link” by George Clason. The idea is that you
“pay yourself” the first 10% of your income each month.
This idea resonates with a lot of people, but many get it wrong. For example, “pay yourself first” does not mean to treat yourself to a nice dinner or vacation with the 1st 10% of your income. That would be paying the restaurant first, not yourself.
The True Meaning
Pay yourself first means to put away money in an account that you never touch that will grow over time. This could be a money market or savings account that grows until you have enough to buy a protected asset such as real estate that will make you even more money.
Not Just Money
This concept is not limited to money. Pay yourself first also applies to fitness, recreation, and time with loved ones. Think of all of the human needs that you have. It is important to block out time to service these needs “first.”
If you are spending time doing favors for your boss to get “extra points” instead of working out; you are paying your boss first.
This makes a lot of sense. If you keep on paying your bills and debt or buying new things every month, you won’t get to save your money at all. Your hard work will be put to waste because you do not set aside some of your money. You won’t be able to enjoy your hard work.
Very well written, and awesome quality!
The richest man in Babylon is a must read for anyone who wants to become financially independent.
The people clicking your link will benefit from reading the book, and so will you.
🙂
from your post,
i understand the difference between pay yourself 1st and pay boss 1st.
Wow, we spend lots of time to pay boss 1st..
It’s time to change,
thanks for it.
This is a really sound idea,I wish I’d thought about doing this 10 years
ago!Cool video by the way.
Hey, thanks!
Thank you for the reply. Problem of course if cash and not knowing much of anything about real estate. So, I guess a reasonable way to go about it would be to build it up to say 100 machines and pocket the profits from there building up that money to have enough to use for real estate. Much like you did. I figure it will take me 18 months to get to 100 machines reinvesting profits – I won’t invest $10000 upfront for sure. I guess it would be smart to read up on real estate in that time. Well, thanks for links. I’ll keep coming back for your insight on things.
Is 12-13 hours a week reasonable to assume on 100 machines?
Yes, I think that’s reasonable.
Sounds like a good plan: read up on real estate over the next 12-18 preparing to reinvest profits.
Brian – Finding your blog has moved me to begin the bulk vending business. I have been doing the pop/snack vending for about 13 years and now have it built up to about $70K/year gross doing it on the side. But, it’s not as fun anymore but the big downside is I’m tied down to it as going away for more than 2 days is not an option. Repairs, etc also eat up tons of profit. So bulk vending seems to be a natural move. I have a gradual plan to build it up over the course of 3.5 years.
My question to you (and I appreciate reading your replies to comments) – is how much time could I realistically expect to spend per month on 300 machines (I’m not buying them all at once). And with that – do you think it’s wise to do bulk vending full time, as in is it a stable business once you’re set up and rolling with the machines.
Thanks a lot. P.S. is there a website or anywhere to go to read up on the process you use to buy real estate?
Sorry for the two questions in one. Getting it all out there at once.
Hey Rick. Bulk candy vending is definitely more passive than big machines, but the numbers are smaller. When you get up to 300 or so machines, your main time suck will be turnover. When a location decides to bolt, you’ll have to spend time looking for a replacement.
Real estate is a much more profitable and passive option past 100 machines.
You could spend $10,000 on 40 machines and make $1000 a month, which isn’t bad… but it would require some maintenance.
or, you could spend that $10,000 on a piece of real estate and make $300/mo., plus $20,000 in equity when you sell it in a year or two.
The real estate option takes less work, is more fun, and makes you more money in the long run.
Read more at http://libertyrea.com.
I really enjoy your material, what a great video. Thankyou.
Thank you! Very kind.
In that case, editing software could help you determine the relative time (between each hoarse), but not the actual time.
Hello again Brian, no i do not have access to the original footage. All i would have to work with is a video re-play of the race on-line. Would editing software be of any use in this case? Again thank you for any information you arable to provide. Keep up the great work on your blog i look forward to future posts.
Rich T.
hey Brian, really enjoy your site. was hoping to pick your video production mind. i am starting a business and need guidance on an item. i need to be able to obtain actual times from thoroughbred video race replays. is there a way to get an accurate time from the video replay (frames per second), would it require a video editing program and which one would you recommend. any assistance would be greatly appreciated. i realize that doesn’t relate to this posting, but since it was the most recent one i thought you may see it and reply. thanks again Rich T.
The original footage has the actual time burned into each frame, but once it is broadcasted, that information gets lost. Do you have access to the original footage or will you be working off of tv recordings?
Any advanced editing software such as AVID or Final Cut is able to read timecode.
I partially agree with this. Putting money aside is a great step to financial freedom. Investing in yourself is also important. But one thing Ive learned (or relearned) recently is being a more giving person. Donate to worthy charities (like a local foodbank), donate your time to helping older neighbors, etc. You will be rewarded somehow, some way in life. Ive learned this from my backyard garden. When I donate 5 or 10% off the top of my harvests (not from whats left over) I am somehow rewarded. Neighbors will give us concert tix, movie tix, bake us a pie, and so on. An elderly lady even bought us a subscription to Organic Gardening mag and Cooks Illustrated. Pretty cool. No, I dont get rich off of those, but giving tends to give back. Its more of a pay it forward instead of a pay yourself ideal. Its definitely worth a try.
I think that is a great point.
Great concept, I just wish it was as easy to do as it is to say!
Is real estate the best thing to be saving up for as far as passive income opportunities go? My only issue with going down the rental property path is that while you may be adding passive income streams, you’re also accumulating risk (each mortgage you take out is a risk).
There are a lot of things we do to mitigate risk in rental real estate. We make sure that the house is in an area that rents in 2 weeks or less and the rent covers the mortgage by at least $200 & we buy the house with $20-$30k in equity to name a few.
You actually have less “risk” on rentals as you accumulate more because your occupied units make up for the unoccupied ones. Think about this:
If you have 1 unit and it goes unoccupied, you are at 0% occupancy.
If you have 10 units and 1 goes unoccupied, you are at 90% occupancy.
Great Insight. Most people think of pay as money. It’s not. Pay yourself is what ever makes you happy, and is being done for you. Not giving to someone else.