While there are ways to increase your income, it’s pretty much fixed at any point in time. Don’t let that limit you in terms of building wealth. Decide how much you want to save. Set yourself a target for the end of the year. Make it a stretch, but not completely unreachable.
Then look at the resulting equation. Deduct your monthly savings amount from your net income. This tells you how much you have left to spend every month.
We’ll discuss this in more detail in the following chapters.
Think of kids being offered 2 marshmallows now or 4 marshmallows later. It’s called deferred gratification. You can spend your money now, or save it, grow it, and have more to spend later.
Your patience and sacrifice will be rewarded.
Don’t be like the greedy kid.
Savings x 12 = annual increase/ (decrease) in wealth
If you spend less than you earn for twelve months, your wealth will have increased by the end of the year.
It really is that simple.
We won’t be covering stock market investments in this book. My aim is to get you to the point where you are saving regularly and have scraped together enough cash to start dabbling with more sophisticated investments. These higher-risk investments are more volatile and could increase or decrease your wealth no matter what you do on a monthly basis, although – over the long term – they should result in higher growth.
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Work while they sleep. Learn while they party. Save while they spend. Then live like they dream.
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