Here’s one of the many lessons we should be taught in school but aren’t…
If you want to get rich, you’ve got to break the law – Parkinson’s Law!
Fifty years ago, British writer C. Northcole Parkinson stated that most people retire poor because no matter how much they earn, they spend the entire amount and a little more besides. This is known as Parkinson’s Law, and it’s still true today.
Even though they may be earning way more than they did at their first job, most people use every cent of their income to maintain their lifestyle. No matter how much they make, there never seems to be enough, resulting in ever-growing debt, sleepless nights and financial frustration.
The only way to start accumulating wealth is to break Parkinson’s Law. How? By making sure your expenses increase more slowly than your earnings, then investing what’s left over. Here’s how to start:
Draw up a budget of all your monthly expenses.
Examine every item and question it as if you were analyzing somebody else’s spending. Look for ways to cut back. Aim for a 10% reduction in your living costs over the next three months. Better yet, find ways to increase your income while you’re reducing your expenses.
Once you’ve achieved that, resolve to save and invest 50% of all your increase in earnings you’ve received.
This still leaves you the other 50% to play with. If you do this for the rest of your career, regularly investing in revenue properties or similar investments, according to Parkinson, you’ll retire rich!
So go forth and break the law– Parkinson’s law, that is!
For more information on how you can leverage the equity in your home to accelerate your wealth, call us today!