“The philosophy of the rich and the poor is this: the rich invest their money and spend what is left. The poor spend their money and invest what is left.” Robert Kiyosaki
While the initial reaction of most people may be to take offence at a statement as broad as this consider that it is possible to earn a fantastic salary and be in debt each month and equally possible to earn very little but have no debt.
Neither of these scenarios happens by chance, they are the result of choices. One of the most valuable investment or wealth building strategies is to “pay yourself first”. From your first pay cheque if you immediately set aside a fixed amount – whether five percent or twenty percent, there is always a buffer that can give one a sense of well-being regardless of what life may bring.
Wealth is also relative, for a person earning a salary of R2,800 per month after two years of consistently saving ten percent, with no interest taken into account a total of R6,720 has built up. After ten years R33,600. To the person earning R2,800 that feels like real wealth.
The philosophy of the poor results in a nil saving as the maxim seems to apply that no matter how much we may earn, expenses expand to the level of income available for spending. The result is that all that is left to save after spending is nil.
The definition of insanity is to keep doing the same thing over and over again and expecting a different result. Unless a change in philosophy is made the outcome will not change.
It is difficult to make the shift from a philosophy of spending first and investing second to investing first and spending what is left, but small steps can make all the difference. Begin with R50 per month, and then increase it to R100, then a percentage of what you earn.
The best approach is to make incremental changes over time. To commit to setting aside twenty percent overnight is bound to fail. Gradual changes are the most sustainable.
No matter what your goals in life are, simply having a “nest egg” can give you the security, peace of mind and confidence to envision an entirely different future to the daily grind of the “poor mind-set”.
We are all captains of our own ships and the course we set is our choice. Reducing the “nice to haves” •