Top 5 New Year's Resolutions: #5 Save More Money And Have Financial Independence

Name: Top 5 New Year's Resolutions: #5 Save More Money And Have Financial Independence
Uploaded: 2013-12-18T22:09:39+00:00
Duration: 2 min 57 s
Channel: Brian Tracy
Description: Brian Tracy explains how to build financial independence by creating a separate savings account and gradually increasing contributions from 1% of your…

18 Dec 2013 · 3 min

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2:57

Brian Tracy explains how to build financial independence by creating a separate savings account and gradually increasing contributions from 1% of your paycheck by 1% each month until you reach 12%. He says you'll see reduced debt and growing money within one to two years if you treat the account as off-limits.

Questions this video answers

Save 12% of your income off the top for the rest of your life (with a suggestion it could reach 15–20%).

Start by saving 1% of your income each pay period and increase the saved percentage by 1 percentage point each month until reaching about 12%.

Open a separate account where money "goes in and never comes out"—only used for financial independence (described metaphorically as 'Hotel California').

Chapters

One of the most popular New Year's resolutions is to save money. But it's not just to save money. It's to get out of debt. There's nothing worse in life as an adult than to have debts that you have to service every single month. It lowers your self esteem. It lowers your self confidence. It causes you to envy and sometimes resent people who don't have financial problems. So here's how you do this. You make a decision that you're going to save 12% of your income off the top of your income for the rest of your life. Go and open up a separate bank account. This is your financial freedom account. Now, your first response will be, I can't save 12% because I owe so much money and my expenses are so high. Your job, however, is to completely change the way you think about money. So what you do is you say, I'm going to save 1% of my income every time I receive my pay and put it into my financial freedom account and I'm going to live comfortably on the other 99%. Now fortunately, human beings are creatures of habit, good habits or bad habits. And you can develop the savings habit by saving 1% off the top and living comfortably on the other 99%. In month two, you take 2% off the top, put it into your financial freedom account, which is an account where the money goes in and never comes out. It's like the Hotel California. You can check in, but you can never check out. You never spend this money for anything except financial independence. Month three. Save 3% and live on 97%. If you keep doing this, here's my promise. At the end of a year, you will be saving quite comfortably 12 or 15 or even 20% of your income. You will gradually start to get out of debt. You will start to become far more thoughtful about expenditures and start delaying rather than buying things on the basis of impulse. You'll start to feel more confident and happy. And this money is going to start to grow. You're going to start to attract into your life more money from sources that you don't even know about today. And that money goes into this account as well. I promise you, in a year or two years, you'll have several thousand dollars in this account. Your debts will be all paid off. You'll be feeling greater levels of self confidence and self esteem. And you'll feel that your whole financial life is under control. Is this easy? No. But if you start with 1% and you discipline yourself to increase it by 1% per month, soon it becomes a habit. And as good to say that everything is hard before it's easy. But once you've developed the habit, it becomes automatic and easy for the rest of your life to enjoy complete control of your finances.