After Learning about the first law of money many of my students and members have asked me how can they save 10% of the money when they don’t have enough for their necessary expenses.
Let me ask you simple question “does all the people reading this post earn the same amount of money?”
Nope, right. Some people earn more, some have larger families to support, but the thing is they all want to be rich. There are some people who earn $50,000 a year and some earn $500,000 year yet both of them have asked me how can they save 10%?
Let me tell you a strange secret what each of us call our ‘necessary expenses’ will always grow equal to income until or unless we consciously protest against it.
Today We will learn about the Second Law of Money. It is the second step in the staircase of wealth to become rich.
Second Law of money states that Control Your Expenditure.
Many of us confuse our necessary expenses with our desires. Each of us together with our good families has more desires than our earnings can gratify.
Even if you spend all your income on your desires, still many are left, right?
Everyone is burdened with more desires than they can gratify. You may think that wealthiest man can gratify every desire? This is a false idea that leads to you in debt. Take an example of Warrant Buffet, the third richest man in the world still eats $3 breakfast from McDonalds. Because everyone has a limit, there is a limit to time, limit to health, limit to travel, limit of zest with which one can enjoy.
To get rich, your goal should be to get 100% appreciated value of every dollar you spend.
Get a diary, align with your partner and budget your necessary expenses first. Don’t touch 10% of the money that is fattening your wealth every month. And from the remaining gratify the desires that give you maximum joy/appreciated value.
When I started budgeting I was astonished that my necessary expenses were only 40% (Rent, utilities, insurance, etc) of my income. And rest of it, even more than that I was spending on parties, booze, eating out at fancy restaurants, buying fancy clothes that I don’t even like. It was budgeting that helped me to get debt free.
The purpose of budgeting is to enable you to protect your wealth from casual wishes. Don’t wish for things that you don’t want to impress people you don’t like by the money you don’t have.The best way to stick to a budget is to start one. Click To Tweet
Now, I enable you guys with my knowledge and strongly recommend to take action right now if you want to get rich.
If you have any question please feel free to ask in comments.