This easy concept is difficult to implement unless you have
the discipline to do so.
Think about it; you were living on your old salary
before you got a raise.
You can have the best of both worlds.
Why not live a
little bit better (remember that 50 percent of your salary increase goes toward
living a better lifestyle) and save/invest more money for the future? Sounds
like a good plan to me.
So then, why do most people not do this? It’s simple; they
get behind in the first place.
They start by spending more money than they make.
Thus, they are constantly trying to catch up.
If you don’t fall behind at the
beginning, this plan will easily fall into place.
In fact, this principle is what will put you ahead of the
game. If you do this every time you get a raise, you will find yourself
ultimately saving a significant amount (upwards of 50 percent) of your income
and investing it in your future. Combining this with my next principle (on saving bonuses) allowed me
to save over 50 percent of my total income annually for several years.
This was probably the most important idea I learned in
business school. And it was a random comment made by my accounting professor. I would have missed this if I hadn’t attended
class and instead just read his textbook. This brings credence to the thought
that going to classes is important in school.
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