It is a system that
does not require motivation or energy to become wealthy; it does not require
discipline or even a budget.
Traditional wealth creation programs tell you
that you have to have a budget, be disciplined, be motivated, and write down
your goals. In contrast, in this system, the automatic millionaire will teach
you that those things ultimately fail when you try to get rich. The truth is
that you are too busy to spend all day thinking about wealth creation. You need
a system that works while you sleep, a system that is automated.
You can have a very
large income and make a lot of money and still not have freedom. Making more
money won't make you rich unless you do something with that money for yourself.
Therefore, income alone does not create wealth. The Automatic Millionaire is
not about getting rich overnight.
You get rich over
decades by creating a system that literally cannot fail. It's not how much you
want it that determines whether you'll be rich, no. Most likely, you have money
leaking out of your pocket every day. This is the money you have that could
make you rich. So you have to track your expenses for a whole month and include
everything. Then ask yourself honestly if there is anything you have spent
money on that you could cut back on. As our income increases, so do our
expenses. You have to positively make your way to wealth. Let's take, for
example, a latte. $100 a day at 5% equals $1 million in 54 years. $10 a day at
10% equals $1 million in three to four years. $10 a day at 15% equals $1
million in 25 years. $20 a day equals $1 million in 27 years, but $20 at 15%
equals a million dollars in 21 years. Let's say you could get your latte factor
up to $10. How quickly can you add up $10? Do the math on the latte factor.
Another step to follow is to pay yourself first. Why do you work? Because you
get up in the morning, leave your family, don't do what you want to do with
your day, go to work all day for 8, 9, 10 hours a day, go you go home, you wake
up, and you do it all over again. Why would you do this five days a week, four
weeks a month, 12 months a year? Why would you do all this to earn money and
not for yourself first? Most people pay others before they pay themselves: the
government, their creditors, and their debt collectors. Everyone else gets paid
first, and then if there's anything left over, they pay themselves. This system
is not good, and it is designed to make you fail financially. If that's the
system you're using right now and you don't have any money, that's why the odds
are against you. It's very difficult for you to get rich if you pay everyone
else first. You need to change this. You need to completely redirect your
income so that the first person you pay is yourself. The first hour of every
day you work should go to you. What you need to do is pay yourself first
automatically. See if you can the money automatically from your paycheck and
pay yourself first, then you are living on what you have left over and you
won't need a budget. The average American saves less than 22 minutes a week of
their income. In other words, the average American saves less than 2 percent of
their income. Now again, why work all week and not have some time in the day
for yourself? If you want to be broke, don't pay yourself first. If you want to
be poor, spend everything you earn, no matter how much money you make.
If you want to be
middle class, pay yourself first 5 to 10 percent of your gross income. If you
want to be upper middle class, pay yourself first 10 to 15 percent of your
gross income. If you want to be rich, pay yourself first 15 to 20 percent of
your gross income. Now, if you want to be super rich, pay yourself first at
least 20% of your income. All fundamental wealth begins with paying yourself
first. The next step is to make your financial life automatic. Making your
financial life automatic is one of the basic principles of this information. If
you don't do this, this information will still help you, but it won't do so as
quickly. The government has figured out how to make you pay them automatically first.
Corporate America has figured out how to make you pay them automatically
because you don't use the same technology they use to pay yourself first.
The power of compound
interest in other books, such as those by Robert Kiyosaki, these plans are ones
he doesn't like simply because it's an active way to invest money, as he
explains that there are other ways to make money through assets that provide
cash flow. Now, if we don't know how to invest or don't have much knowledge,
then maybe this plan could be for you. That depends on each individual.
Continuing with the topic, step number 5 is to create your own emergency
basket. It is said that the American family has less than a month's worth of
expenses in savings. What would you do if you lost your job, were injured, and
couldn't bring in money? You need to have an emergency basket or cushion of
reserve funds that you can easily access in case of emergencies. How much money
should you set aside in the emergency basket? Ideally, it would be six months'
worth of expenses set aside from your checking account in case of an emergency.
At a minimum, you should have at least 2% of your income going directly into
your cash financial cushion. The amount you have in this cushion will depend on
you and your comfort level. Some people feel comfortable with one month's
expenses, others need up to 24 months, which would be two years. Once you
decide how much you are going to save, it's time to make it automatic. What if
I have debts? How much should you save first? Get one month's emergency money
in savings, then you can start focusing on paying off your debts. Even if you
have credit card debt, get one month's worth of expenses in your safety
account. Don't stop paying your credit cards.
But don't lose sleep
over the fact that the debt isn't being paid off. Set aside a month's worth of
expenses and start tackling your credit card debt. A key component of what
we're doing today is the factor of sleeping well at night. What that means is
really very simple. What keeps you awake at night? One thing that keeps people
awake at night is worrying about money. It's really important to put that
completely aside. The way you put it aside, the way you can rest is to have an
emergency basket or a financial cushion. Money worries are omnipresent, and
your emergency basket can be better than any sleep aid.
The habit of automatic
tithing: we make a living by what we earn; we make a life by what we give.
What is tithing? The
key behind giving is the idea that you give back a portion of what you sow. In
other words, as your income comes in, you give back part of your income to the
world to help others. That could be your church, your temple, your community,
etc. You are helping people in need. Donate between 1 and 10 percent of your
income while continuing to save. When you think about donations even before you
become wealthy, you put yourself in a proactive position. Every time you get
paid, you think about who you want to help now.
