Building Wealth as Simple as PPP
We need to be conscious that we want to build wealth and then start taking steps to get there. There are four major areas of conscious wealth building.
1. How much money are you saving?
2. How much money are you wasting?
3. Where do you park the money you have saved for the long term?
4. How much is that money growing?
For today we are tackling the first one.
1. How much money are you saving?
If you have done your personal cash flow statement worksheet in https://www.finaims.com/in-outcome-book, you would know how much money you can save. What next? Assuming that you have some savings (no matter how small or large), you will need to do several things. I call them the 3Ps.
P1—Protect you from yourself
Sometimes you need to do something different from what you normally do so that you can progress on a certain area without sabotaging your own efforts. One of the ways to ensure that your savings really become savings is to put it somewhere else, ideally in an account you do not withdraw from. For example, another savings account in the bank, or perhaps a fixed deposit account. By funnelling your savings into a special account and not your current account or checking account (which you regularly use for your expenses), you have a chance for it to be successfully saved. If you have a separate account, you are more likely to keep your “itchy” fingers out of it.
P2—Pay yourself first
You pay the credit card bills, the rent, the car loan, and other expenses but you forget that you are the most important person in the equation. You are the utmost priority! So start the process right by paying into Your Future Life account first. Do it before you make any other payments. Treat this like an invoice from the future that you need to pay. Paying yourself first is one of the oldest rules of personal finance. Obeying this rule will bring you tremendous wealth.
P3—Park it automatically
How do you “park” your money? I recommend a suggestion from The Automatic Millionaire by David Bach.1 He recommends automating your savings or investments so that it takes the hassle out of manually transferring the money into another account. In fact, an early standing instruction after the salary payment will mean that you may not even miss the money you have saved. Even if you do miss it, you will have to adjust your lifestyle to fit whatever that is left for your expenses. After all, if your salary was cut 20% tomorrow, you will have to adjust nonetheless. So it is better that you imposethat voluntarily, rather than having it forced on you.
These 3Ps are part of the system that helps you to save and helps your money stay “saved”. If your savings are already quite substantial, you will need to start thinking about building different rates of returns for your money. If you are already here, do engage with any of your FinAIMS consultant here https://www.finaims.com/about-us. However, if you are like most people, savings is something quite challenging and you wonder why you cannot save? Well, that is for the next write up- stay tuned. If you do not know where your money goes at the end of the month, please visit the personal cash flow statement here https://www.finaims.com/in-outcome-book to start on this first step to building your financial fortress. (The above is an excerpt from In/Outcome – Manage Your Income, Achieve Great Financial Outcome which can be purchase in Shopee for RM32 as its sold out in all the major bookstores nationwide due to high demand…)