Jack Canfield explains the "pay yourself first" principle from George Clason's 1926 book The Richest Man in Babylon. Set aside at least 10% of your income into savings and investments to build wealth through compound interest. Automate the transfer so the money moves before you can spend it.
Chapters
Hi there, I'm Jack Canfield, and today I want to talk to you about the importance of paying yourself first. In 1926, George Clason wrote a book called the Richest man in Babylon, one of the greatest success classics of all time. It's the fabled story of a man named Arkad, a simple scribe who convinces his client, a money lender, to teach him the secrets of money. And the first principle the moneylender teaches Arkad, is a part of all you earn must be yours to keep. And he goes on to explain that by first putting aside at least 10% of his earnings and making that money inaccessible for expenses, Arkad would see this amount build over time and in turn start earning money on its own over an even longer time. It would grow into a lot of money because of the power of compound interest. If you've never heard that term before, compound interest is what happens when you earn interest on your savings. And when left in a savings account, that interest that gets added to it begins to earn interest of its own as well. And given enough time, the earning power of that interest, compounding on itself, will eventually turn a small amount of money into a fortune. Compound interest is one of the key reasons why paying yourself first and starting early as you can in life is so essential if you want to accumulate wealth. And we'll talk more about that in a second. Now, the world's most aggressive savers pay themselves first and make investing money a central part of their money management. They make that as important as paying their mortgage off. And to get into the habit of saving some money every month, immediately take a predetermined percentage of your paycheck and put it in a savings account that you don't allow yourself to touch. And keep building that account until you saved enough to move it into a mutual fund or a bond account or. Or to invest it somewhere else. You see, investing just 10 to 15% of your income will help you eventually mass a fortune. So pay yourself first and then live on what is left. This will do two things. Number one, it will force you to start building your fortune. And two, if you still want to buy more and do more, it will force you to find ways to earn more money to afford it. Never, ever dip into your savings to fund your bigger lifestyle. You want your investments to grow to the point that you could live off the compound interest that accumulates. That's what I've been doing. I really think it's important now. Only then will you be truly financially independent. Now, keeping this idea of paying yourself first in mind, I want to leave you with a bit of homework to complete after you've done watching this video. Calculate what 10% of your income is and commit to saving that much no matter what. And to hold yourself accountable, I want you to leave a comment below with the most important thing you can start saving for. Is it your retirement? The ability to eventually quit your job and start a charity? Or maybe you need financial independence in order to start a brand new career doing work that you're passionate about. Well, I'll follow up with you to make sure you're staying on track. So thanks for watching and remember, nothing will change for the better until you do. Now if you found this video helpful, make sure you like it, share it with a friend who may need it and subscribe to my channel. For more videos like this one and for some additional resources on how to set yourself up for financial success, Visit my website jackcampfield.com.
