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3 Money Habits of Rich People that You Should Follow

3 Money Habits of Rich People that You Should Follow

3 Money Habits of Rich People that You Should Follow

I’m super excited today to share with you a simple formula that the rich use to accumulate wealth. It does not matter how much you earn or make a month, start by dividing them into the following percentages.

70/30 Rule

After you pay your fair share of taxes, learn to live on 70 percent of your after-tax income. These are the necessities and luxuries you spend money on. Then, it’s important to look at how you allocate your remaining 30 percent. Let’s allocate it in the following ways:

Savings

Out of the 30 percent, the first 10 percent should be put in savings. This is one of the most important and exciting part of your wealth plans as it will give you a peace of mind knowing that you have some $$$ in times of need.

Let me give you the definition of “rich” and “poor”: Poor people spend their money and save what’s left. Rich people save their money and spend what’s left.

Here are also some smart and easy ways that I have used to save money daily without even realising it. That’s the best feeling isn’t it? It’s like finding new money when you didn’t even expect it.

Capital Investment

The next 10 percent of your after-tax income will be used to create wealth. You can use this money to invest in stocks, funds and other side opportunities to grow this amount. There are so many exciting possibilities to explore thanks to the advancements in technology. What an exciting time!

Charity

And the last 10 percent should go to charity. Charity is the act of giving back to the community and helping those who need assistance.

You can give the church you attend, the poor people you see on the streets or any non-profit organisations that you are interested in.

The act of giving should be practised early, when the amounts are small. It’s pretty easy to take a dime out of a dollar. But it’s considerably harder to give away a $100,000 out of $1 million. You say, “Oh, if I had $1 million, I’d have no trouble giving $100,000.” I’m not so sure. $100,000 is a lot of money. Start early so you’ll develop the habit before the big money comes your way.

So these are the 3 most important money habits that you should start applying in your life.

Here’s a story that can help you relate better on why you should start these good money habits.

Twenty years ago, two people each earned a $1,000 a month and they each earned the same increases over the years. One had the philosophy of spending money and saving what’s left; the other had the philosophy of saving first and spending what’s left. Today, if you knew both, you’d call one poor and the other wealthy.

So, remember that giving, investing and saving, like any form of discipline, has a subtle effect. At the end of the day, the week, the month, the results are hardly noticeable. But let five years lapse and the differences become pronounced. At the end of 10 years, the differences are dramatic.

And it all starts with the same amount of money— so how are you going to spend or save it? 🙂

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