The Secret and Simple First Rule of Becoming Rich

The first practice of the wealthy is to pay yourself first. This does not mean going to the mall and buying a new shirt or television. That is not paying yourself; that is paying someone else. After all, how much real value do you actually receive from that shirt or television 10 or 20 years from now? Absolutely none!

Paying yourself first means that you invest your money so it grows for you, ideally through an Automatic Investment Plan (AIP). An AIP is any program where money is withdrawn, automatically and regularly, from your paycheck or your checking or savings account and invested on your behalf. Invest this money in a mutual fund, stock, or any other investment vehicle. Where you should place your AIP is based on your personal preference and investment expertise.

The important thing is to understand the importance of starting - and the cost of procrastination. Many people intend to start an AIP type investment program, but never do. Why do people put off such a huge, critical step to financial success?

There are three primary “stories” people tell themselves that prevent them from becoming rich. These stories appear real, but they’re simply not true. They are financial self-sabotage. Let me share them with you.

Story 1: “A small amount of money put aside each month won’t really make a difference.”

I need to get something bigger that will happen faster. For most people, this never even vaguely occurs. Instead, they end up with nothing.

Story 2: “I can’t afford it.”

Every time I speak on this subject, I ask the audience if anyone has an AIP in place. Many raise their hands. I then ask them to stand up, and ask them to answer this simple question: Two months after you started your AIP, did you even notice that the money was gone from your monthly budget? The response is always an overwhelming “No.”

Story 3: “I need to research where to invest my money before I start.”

This is “paralysis by analysis,” which means that you put off making any decision for fear of making a bad one.  

Don’t fall for these traps. Take control and act. Start your AIP based on your level of investing expertise. You can always change your investment vehicles later on.

Remember, the important thing is to start.