Once, while driving, I was listening to a Brian Tracy audiobook. He wrote hundreds of books on the subject of "Self Help" and sold millions of units around the world, and I wasn't expecting much out of it.
His voice is monotonous, which makes it hard to pay attention and remember much of what he says. However, one subject he was discussing, in particular, struck my attention.
He was addressing personal finance and how vital it is to save money.
I was the sort of person who thought things would turn out to be all right in the future. I often preferred to invest part of my income on a new project rather than in my savings. Naivety prevailed, I was struggling financially. I knew I needed to get my finances sorted out, so I listened attentively.
What did Brian Tracy advise? The one recommendation he made was to start saving money, not tomorrow, but now, right now, today.
He suggested to save one's after-tax money in this way:
- 20% of what one makes goes into a saving account
- 50% goes into living expenses
- 10% to education
- 10% serves one's recreation
- 10% covers one's insurance
Brian Tracy stated that if one can not follow this plan, at least one should start the process of saving even if it's only a small amount.
For him, the act was more important than the amount because what doesn't get done today will never happen tomorrow, and of course, this made sense to me.
I was not saving, and I knew that if I continued in this way, I would never have money on hand tomorrow. I understood he was right and I needed to begin immediately.
Soon after, I went to my bank, and I opened two new separate accounts: one saving account for the vacations and one brokerage account for future expenditures, and started putting money aside.
Henceforth, 10% of what I made went into the vacation account, another 10% into my brokerage account which I used to invest in blue-chip dividend stocks only, or ETF SP500. I don't touch the money saved.
I have been doing this for two years, and my new savings have already served me well. We went on a beautiful vacation abroad, and I am satisfied to see my brokerage account to grow steadily.
Hadn't I started this habit two years ago, I would probably have spent the money I made, and I would have nothing to look for today, much less the memories of our family trip to China.
Thank you, Mr. Brian Tracy!