By: Brian Tracy
One of the smartest things that you can ever do for yourself is to develop the habit of saving part of your salary, every single paycheck. Individuals, families and even societies are stable and prosperous to the degree to which they have high savings rates. Savings today are what guarantee the security and the possibilities of tomorrow. The first corollary of the Law of Saving comes from the book The Richest Man in Babylon by George Classon. It is to Pay yourself first. Begin today to save ten percent of your income, off the top, and never touch it. This is your fund for long-term financial accumulation and you never use it for any other reason except to assure your financial future. The remarkable thing is that when you pay yourself first, and force yourself to live on the other ninety percent, you will soon become accustomed to it. You are a creature of habit. When you regularly put away ten percent of your income, you soon become comfortable living on the other ninety percent. Many people start by saving ten percent of their income and then graduate to saving fifteen percent, twenty percent, and even more. And their financial lives change dramatically as a result. So will yours. The second corollary of the Law of Saving says, Take advantage of tax deferred savings and investment plans. Because of high and even multiple tax rates, money that is saved or invested without being taxed accumulates at a rate of 30% to 40% faster than money that is subject to taxation. Self-made millionaires, according to Dr Thomas Stanley's book The Millionaire Next Door, are almost obsessive about accumulating their funds in assets such as real estate, self owned businesses and equities that increase in value without triggering tax liabilities. Invest in company pension and retirement plans, 401(k) plans, IRA's, Keough Plans, Roth IRA's, Education Investment Accounts, stock option programs and whatever else has been approved by the IRS for long term financial accumulation. Make every dollar count! Now, here are two things you can do to apply this law immediately: First, begin today to put away ten percent of your income. Set up a special account for this purpose and treat your contributions to this account with the same respect that you do your rent or mortgage payments each month. Second, become a lifelong student of money. Read the best books, take courses and subscribe to the most helpful magazines. Know what you are doing so you can always make intelligent decisions when you invest your funds.