We see this phrase in many places – “Simply Save”. While the literal meaning of ‘simply save’ looks too easy but I bet, it is not. Let’s start with saying that it means just save from whatever you have. Saving is an art. It does not occur automatically. It has to be learnt but most of us don’t agree to it which makes our saving journey difficult. As a result, we see people who have been working all their lives but they hardly have any savings to fall back on. So, if saving is not so simple to understand then how to do it? Let us consider how our monthly cash flow looks like on a regular basis. We work entire month for a salary at the end of it. Thereafter, we make payments to banks, electricity company, cable company, mobile company, credit card company, milk-vendor, chemist, restaurants, etc. In nutshell, we are paying everyone who have targeted us to make money for them. If we stop earning, we will not be paying them good money. Hence, it appears that we toil day and night for these people only while we falsely believe that we are working for ourselves. This happens to us because we don’t learn the concept of “pay yourself” first i.e. simply save.
Most of our activities circle around making money and further, more money then, even more money. But then why we fail in achieving our objective. Because we don’t do it the way it should be done. A mighty train engine can take its passengers to the destination only if it is running on a solid track and constantly takes the help of support mechanism. In a similar way, even if you are earning a fat pay package or making good profits, you need a well-defined path with proper guidance system.
This starts with what I call “PAY YOURSELF FIRST”. Fix yourself a payment out of every salary. For example- if your salary is Rs 50,000/-, pay yourself a part of it as you rightfully deserve. Spend the remaining amount that you would like to give away to others. This simple habit of paying yourself first or simply saving works like that powerful engine of an aircraft which is capable of taking your flight of wealth creation to greater heights. Invest your personal monthly payment in the way best suited to you. I will make it easier with an example. If you continue to pay yourself a meagre Rs. 10000 for 30 years (average period for which a normal person works), considering an annual return of a conservative 12%, at the end of 30th Year, you would have created a corpus of around Rs 3.6 Crore with an investment of merely Rs 36 Lakh. We also call it the magic of compounding. You can expect even bigger wealth creation if you continue to increase your personal pay every year.
|Simply Save||Save first, spend the leftover.|
|Simply Save||Pay yourself first.|
|Simply Save||Pay outsiders the least you can.|
|Simply Save||Make yourself richer not others.|
|Simply Save||Take guidance of expert financial planner.|
So, start paying yourself right away and see the magic of wealth creation over years.