Many years ago, I started a habit that became the most important financial habit for me.
In this article, I’ll explain how this habit changed my life and why it can hurt you financially.
Here’s the thing: many of us have read “The Richest Man in Babylon.” We understand the simple concepts in the book, but we never follow them.
It’s almost like we love being poor, or at least it seems that way.
The first principle in “The Richest Man in Babylon” and the best financial habit you can develop is to
pay yourself first
This means setting aside a portion of your income for savings before you spend any of it on other things.
By paying yourself first, you ensure that you are building your own wealth instead of enriching others.
This simple habit can change your financial future by helping you save and invest in yourself.
It doesn’t matter how much money you make. If you always pay the big companies first by spending all your earnings on their smartly marketed products, you’ll stay poor.
Buying luxuries when you’re not rich will also keep you poor because the big companies that create these luxuries are far smarter and more strategic about getting your money than you might realize.
Those companies are experts at making you buy things you don’t need over and over. This makes them richer while you become poorer.
If you want to be rich, you need to see your income as a tool.
This tool can protect you, or it can harm you. Physically, none of us would ever want to hurt ourselves, but financially, we do it all the time by paying the big companies first.
As an entrepreneur, I understand how these games are played.
Big companies create luxurious products not because people need them but because people want them.
Take iPhones, for example. How many people actually need an iPhone, or a Ferrari, or a Rolex watch?
These products weren’t made for people who need phones, cars, or watches.
No one needs a $1,500 phone to make calls or browse the internet.
No one needs a $100,000 watch to check the time, and no one needs a $300,000 car to get from point A to point B.
These products are designed to appeal to our desires, not our needs.
They are marketed in such a way that it makes us feel like we have to have them even though they are not essential.
This strategy makes the big companies richer while taking more of your money for things you don’t truly need.
We don’t buy these things because we need them. We buy them because we want to look rich and impress others.
The problem with trying to look rich is that if you’re not really rich, trying to look rich will make you poorer than truly poor people.
Stop making money for big companies by paying them first. Stop being a victim of smart marketing.
More money can’t make you rich
Many people complain that they can’t save money because their income is too low, but that’s not true.
If you want proof, watch the Dave Ramsey Show on YouTube.
You’ll see people who earn as much as $200,000 a year but still have more debt than income.
This shows that having more money doesn’t automatically make you rich. It’s not about how much you earn but how you manage and save your money.
Even high earners can struggle financially if they don’t prioritize saving and investing over spending.
This happens because of something called Parkinson’s Law, which states that work expands to fill the time available for its completion.
Financially, this means our needs and expenses naturally expand to take up all our income.
In other words, if you earn $10 and can’t save even $1, then even if you earn $100, you won’t be able to save $10.
Your expenses will naturally grow to match your income, leaving you with nothing to save.
This is why simply earning more money won’t make you rich. You need to control your spending and make saving a priority regardless of your income level.
How the rich build wealth
When Bill Gates was asked about his early days as an entrepreneur, he shared how his main concern was saving enough money to keep his business running even if his customers didn’t pay for an entire year.
His priority wasn’t buying luxurious cars or shoes. Instead, he focused on reinvesting every dollar back into his business.
Robert Kiyosaki told us about his Rich Dad, who lived like an ordinary man in Hawaii for many years.
One day, he bought one of the most expensive properties, and everyone realized he was wealthy.
If you study the lives of people who have made significant money, you’ll notice a common pattern.
The rich become rich because they pay themselves first for many years.
They don’t make money just to spend it. Instead, they make money, save it, and reinvest it repeatedly for many years.
That’s why they eventually become richer than everyone else.
How the poor make the rich richer
I have friends who use expensive phones, branded shoes, and fancy furniture that I would never buy, even though I earn more money than they do.
These people make money just to spend it, and because of this, they are always broke. But it’s not just about being broke.
They also believe that someone else is to blame for their situation. They often blame the government and resent the rich.
What they don’t realize is that they are the ones making the rich richer by spending their money on luxury items they don’t really need.
They are enriching the big companies and wealthy individuals who sell those products.
Instead of saving and investing their money, they spend it on things that don’t bring long-term value, keeping themselves poor and making the rich even wealthier.
According to WalletHub’s 2018 credit score and iPhone survey, nearly 28 million Americans think it’s worth going into debt to buy an Apple iPhone.
Really, poor people with some cash can’t set their priorities straight, and even those with no money are willing to go into debt to buy luxuries.
Now, think about this, Apple is one of the top 10 richest companies in the world. How do you think Apple gets its money? “From poor people who prioritize paying Apple first.”
Here is my simple advice for you
- Stop making the rich richer.
- Focus on saving and investing your money instead of spending it on luxuries you can’t afford.
- Stop paying the rich first.
- Don’t try to look rich when you’re not.
- Pay yourself first
- save your money, and invest to build wealth.
The solution to financial success is self-discipline, particularly the ability to delay gratification.
I’ve always been an investor, even when I had as little as $100.
Whenever I see money in my hand, my first thought is always, “How can I invest this?”
If the amount is too small to make a significant investment, I look for a way to invest it in myself.
Often, I buy good books, which end up being some of the best investments I make.
By delaying gratification and focusing on investing rather than spending, you can build a strong financial foundation and achieve long-term wealth.
Most people can’t see beyond today. They’re like farmers who harvest corn and eat it all, leaving nothing to save and nothing to plant for the next season.
That’s why they stay broke.
Stop making decisions based on what you want right now.
Don’t buy things just to take Instagram photos.
Don’t buy luxuries just to impress your friends.
Instead, focus on your future because it’s 10 times more important than today.
If you make money only to spend it, you’ll always be working for money.
If you eat all your corn, you’ll never have enough to plant for the next season.
So stop paying other people first.
When you earn money, make sure you pay yourself first.
Set aside a certain percentage to save and invest in your future.
I hope you find value in this blog post. Please share with your friends and family and inspire them on their financial journey.
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