If you won a million dollars today, would you spend it all immediately buying loads of stuff so that by this time tomorrow, itíd be all gone?
Iíd bet you wouldnít, but thatís what a lot of people are doing; not with the money they win, but the money they make.
I donít often write about wealth as Iím not that wealthy in financial terms, but lately itís surprised me how often my friends do the exact opposite of what nearly every financial planning book advises; they spend first, and save later.
First Rule of Creating Wealth
Thereís nothing truer about being rich than what a friend told me once; youíre only as rich as you spend. If you make a million but spend a million, youíve still made nothing (If you make a million but spend two, youíre in trouble!).
Thatís why the first rule of creating wealth made so much sense to me when I first heard it. Instead of paying for your bills, clothes, outings, widgets and gadgets first, you pay yourself first.
This is the opposite of what most people do; but consider that a lot of people are hardly cash-rich and are in credit card debt, maybe itís a good idea not to join them!
How Much Should You Save?
Most every book Iíve read advises that you start with 10% of what you make. Whatever you make, the moment you get it, you immediately pay yourself first with 10%; put it away in the bank and itís yours.
If you canít make 10%, start with a smaller amount first, but the sooner you start, the more youíll begin to have.
I can personally guarantee that after you watch that amount in your bank account accumulate, you wonít stop at just 10%. After a while, saving your money can become fun, even addictive!
Want to Become Rich? Then Make it a Goal
How much money do you want to make? Did you ever ask yourself that question? Itís important for many young entrepreneurs to set goals. Itís even more important to want to change the world and help as many people as we can with our businesses, but we canít pretend that we donít want to become very rich as well.
Iíll admit it. Here I go. ďI want to become extremely rich.Ē And Iím sure that many of you young entrepreneurs do as well. Thereís nothing wrong with that, contrary to what some people may think. Wanting to be among the financial elite is great.
So with that in mind, donít forget to set financial goals for yourself. Do you want to have 100,000 in the bank by 25? Do you want to be a millionaire by the age the 30? Do you want to go public in 5 years? Do you want to become one of the richest individuals in the world one day?
Donít be afraid or ashamed to ask yourself those questions. Because if you donít ask those questions, and you donít come to an affirmative conclusion as to what you want out of life, guess what, itíll never happen my friends.
I rarely hear young entrepreneurs talking about how much money they want to make, when I know for a fact that most want to become very rich one day. I think that it has to do with not wanting to overstep their boundaries as a young entrepreneur who hasnít done too many things with their business yet Ė they donít want to come off sounding arrogant or deemed hubris.
But forget about all of that. If becoming rich is one of your goals, then donít be scared to express that. Sure, I feel that most entrepreneurs who set off to change the world and help as many people as they can will, in fact, end up becoming financially rewarded. But itís still very important to know what you want and keep those ďwantsĒ in your mind.
If you donít know what you want, then donít expect to get it. Having extreme wealth will not only allow you and your family to be comfortable for generations to come, but massive wealth also has other advantages.
You can help feed the world. Eradicate poverty. Battle AIDS. Help employ people. Save the rainforest. Fill in the blank. So you better believe that many young entrepreneurs want to become rich when you put things into perspective.
If Oprah and Bill Gates never became as rich as they did, do you think that their contributions to the world would be the same? Absolutely not. Their contributions lie hand in hand with the money they are able to share with the world. Money that was amassed from their entrepreneurial efforts. Money that will continue to have a positive impact for time to come.
So letís not forget to add our financial goals to our whiteboards and notepads. A young entrepreneur once wrote the number ď1,000,000Ē on a piece of paper and became a millionaire not long after. You may have heard of him.
Money As Debt
Paul Grignon's 47-minute animated presentation of "Money as Debt" tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its "Duncan Initiative" received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary system in Canada and the United States.