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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