TLDR; Decide the percentage of income to save from your paycheck. Then automate the process.
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Note: This article is part of a section-by-section break down of the book Money Master the Game by Tony Robbins. Click here to start at the introduction to this series: The Journey to Financial Freedom.
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According to MMG (affiliate link), the first step to financial freedom is to pay yourself first. Make the decision to keep a portion of the money you earn, forever. Some people consider this savings but if you think about it as the money you keep, it gives you a new perspective. The money you earn is yours but you don’t keep it all. You give some away in exchange for goods and services.
I’ve decided to start
Are you living paycheck-to-paycheck?
In MMG, Tony made something clear to me that wasn’t so before. Some people live paycheck-to-paycheck. They only have enough money to get them through a couple of weeks. I’ve seen it as a kid and swore never to live like that. But… BUT… if I stop working, I stop getting paychecks and eventually I’ll run out of money. Essentially, I’m in the same realm as those living paycheck-to-paycheck, just with a little more time.
To get out of that paycheck-to-paycheck reality you have to become an owner, point blank. As an owner, you can be without a job and still have money coming to you. From what I gather, this book is heavily focused on owning stocks, but you can also own IP, real-estate, or a business. As long as it’s producing an income, you’re good. The bottom line is, you have to own something if you want to get out of that paycheck-to-paycheck life.
I’m not there yet and it’s not going to happen overnight. The first step is to make the decision to keep some of your money and that’s what I’m doing.
Let me know your thoughts on the first step and if you have any tips/tricks you want to add.
A part of all I earn is mine to keep
The Richest Man in Babylon by George Classo
Action Items
Do now
- Decide on how much you want to keep for yourself (20% is recommended)
- Open a new bank account (your Freedom Fund account)
- Contact HR or use your job’s online portal to automatically deposit 20% (or whatever you’ve decided) of your income into your freedom fund
Do later
- When you get a raise in income increase the percentage
- When you get a bonus, make sure that 20% of that income goes into the freedom fund account
- Whenever you get a new job go to step 3 of Do now
More Resources
- Review of Money Master the Game – If you want to get an overview of the book before reading it, this is a good summary
- Money playlist on Youtube – I created this playlist to keep track of all the good videos I come across that deal with Money. (I’m open to suggestion/recommendations for more videos to add to this playlist)
- Unshakeable by Tony Robbins (affiliate link) – This is a newer book that is along the same lines as MMG, but way shorter (~200 pages). There’s a podcast that he released alongside the book that you can listen to on iTunes or Youtube. I don’t think there’s different information there but I’m going to get it and skim through it just in case.
Update: I’ve completed summaries for all sections of MONEY Master the Game and wrote a book review. Find the links to it all below.