Are You Working For Money Or is Money Working For You?

“Those who understand interest, collect it; those who don’t, pay it.”
Lynn G Robbins. Uncommon Cents

Most people, the vast majority in fact, work for money. They get up, go to work, work, work, work, work. Then go home and after a while go to bed. Then they get up and repeat the process, Day in day out until they retire. All the time they are working for money.

The rich do not work for money however. They make money work for them.

Of course you have to have money in the first place right! Yes and no. There is such a thing as a gradient scale, whereby you can achieve something, anything in fact, starting off small and increasing gradually. This important principle applies in any situation and under any circumstances. Including regardless of the economic circumstances. In fact when the economy is in a downturn or a ‘recession’, as the pollies quaintly put it, more people in the face of sudden hardship seem to rise to the occasion and achieve more than in a healthy economy. 

Possibly this is due to the fact that people are basically determined to survive come what may and their necessity level will increase accordingly. It is a fact that more home grown and multilevel marketing business appear during recession times than any other.

When saving, even just a little on a regular basis, perhaps in a super fund or even regular savings in a bank or perhaps some gold or silver bought here and there, there is little movement in interest during the first few months but after a while a sudden increase begins to show and this is accelerated quite rapidly. This is an example of using one’s money to make money. Property owners and Investors do this on a continuing basis. You are also most likely doing this your self if you are in superannuation fund.

Most people are familiar with the interest they pay on loans, credit cards, mortgage. There is also the interest you can acquire on savings, Superannuation and investments. It is the interest that, left with the original amount (call the principal) begins to accumulate further monies that are then added to the principal thereby making it grow bigger and able to earn even more interest which gets added to the principal to make it bigger and so earn even more interest and so on. This is not new and it is the basis of accumulating wealth. Oh is that all! I hear you say. No there’s more. But it is a basic principle we need to be aware of and a first step to savings.

It is particularly important to take those first steps although they may be small and seem almost insignificant. But they are actually of extreme importance. They are important because they instil the following principles which all the rich and wealthy employ.

  • Habit
  • Discipline
  • Persistence
  • Patience

You have to learn new habits. The habit of paying yourself first before paying others. It is tempting for some people to quickly pay off all those bills as soon as you can. Sometimes it is not the wisest thing to do. Your money can often be better employed in the bank or in an investment until the time comes to pay on the due date, particularly if you are earning higher interest than you would be paying.

Maintaining the discipline to continue the plan you have set yourself to reach your goal is vital. Weakening at the first or any chance to purchase something enticing does not come in the category of maintaining discipline and can set your plan back many years especially in the early stages.

Persistence is a vital factor. Giving way to other influences or being enticed to spend unnecessarily those vital dollars that are scheduled to be set aside for savings or investment will can cause delays all out of proportion to the time required to meet your goals, especially in the early days when you capital base is small. The longer you take the harder it will be. Lastly patience, because Rome was not built in a day. Any wealthy person will tell you it takes time to build wealth. It has been noted that a working man may well earn a million dollars in his lifetime. The trouble is it is spread over his 30-40 years of working life. Now, if you could have all that up front first… imagine what you could do with a million dollars. The trick is to shorten the amount of time required to get the million dollars by getting your money working for you in progressively larger amounts until the balance is tipped and all your money is then working for you and you are not working for it!

Extract from the book, “KickStart to Wealth” by Michael Moore, available from Author Services