There is a lot of advice the self made wealthy people in America could give you. Business Insider set out to find out what the common person could do to increase their chances of building wealth. The top answer they found came from The Automatic Millionaire, David Bach, whose rule is to pay yourself first. That is not to say that you write yourself out a paycheck, but rather you pay yourself daily based on your hourly wage. If you make $10 dollars an hour, everyday pay yourself ten dollars to be directly deposited into your savings account. If you do that, you should have 3650 dollars at the end of the first year.
Sharing his financial wisdom, David recommended a ‘pay-yourself-first plan’, which involves saving an hour of your daily income every day of the month.
TOP FINANCIAL TIP
Abide by the ‘pay-yourself-first plan’, which involves saving an hour of your daily income every day of the month.
So, if you were earning £8-an-hour, you should save £8 every day of March, which would result in you saving £248 by the end of the month.
David explained that it’s vital to move the money into savings before you even get your hands on it, adding: ‘People still don’t grasp the fact that they need to save a dime out of every dollar.
‘When that money is moved before you can touch it, that’s how real wealth is built.’
Using a piece of research from the Federal Reserve to back up his point, he explained how it has been proven that the majority of people don’t have enough money on hand to cover a £318 ($400) emergency – yet splurge their cash on extravagances like daily coffees and new iPhones.