Secret of Wealth Building

Paying Yourself First

How high is wealth on your list of values?

Secret of Wealth Building is an exciting topic but if you have not done so already, may I suggest that at this point you read the page about Life Values because that is essential to what follows.

It is important because you will learn that we each have a set of life values. If you sit down quietly by yourself you can think of those things that are most important in your life.

If you are not too sure, look at the space around you in your home. How do you fill it?

How do you fill your time? Which is most important to you? Who or what comes where in your hierarchy?


There is only one class in the community that thinks more about money than the rich, and that is the poor. The poor can think of nothing else.

Oscar Wilde


Be sure of one thing. If money is not in the top two or three you will never accumulate it. Why not? Because you will spend it on those things which come above it in your list.

So if it is really your aim to accumulate wealth you will need to readjust your hierarchy of life values.

You will have to juggle them a bit and pay a little less attention to some of the others so you can push it higher. No-one says the list can never be changed. It might just need a bit of give and take.

A Secret of Wealth Building is to Pay yourself first

The next secret of wealth building is is to pay yourself first. I am not referring to your pocket money: that is to say, your loose cash; the money you spend on beer and your favourite hobbies or past-times. I mean really pay yourself.

You have read already about the idea of a Life Fund. This is money which you will treat as somebody else’s even though it is your own. You will treat it as somebody else’s so that you will not touch it.

The idea is to accumulate money and create a large buffer for yourself that will grow and grow and, in comparison, small bills will seem as nothing.

A Secret of Wealth Building is tithe to yourself

I suggest you start by putting aside 10 per cent of your earnings straight into your Life Fund. Set up a standing order from your current account to your Life Fund so that 10 per cent is paid monthly.

That will remove the emotion from it. You will not even have to think about it. Each month it comes out of one account and goes into another interest bearing account.

Get the best interest you can for your Life fund but make sure there are no risks to it. It needs to be a solid, safe savings account.

A Secret of Wealth Building is to create a standing order

You will find that after a few months you will no longer think about the money you are saving because you will adjust to it.

It is such an important secret to wealth building that mortgage companies, banks and utilities encourage you to pay by standing order or direct debit.

There are far fewer defaulters from those who pay in this way. People learn to live with it. Think about your own mortgage or car payments.

After the first few payments, you no longer think about them seriously. They become a way of life.

You should have no difficulty if you fix your initial savings rate at 10 per cent of your earnings. Most people can stand a 10 per cent fluctuation in their rate of income or expenditure without difficulty.

This is the reason religions encourage people to “tithe” or contribute 10 per cent of their earnings to the church; they know people can manage that much.

A Secret of Wealth Building is increasing the rate

After you have been saving at this rate for a few months, review your income and expenditure. See if you can manage another 1 per cent: that is to say, 10% of the 10%. You will probably find you can.

If you don’t feel comfortable with that, add something. Then a few months later review it again and see if you can increase it a little more.

Surprisingly, when people do this they find more unexpected money seems to come their way and their income grows. It is quite uncanny what begins to happen when you concentrate your attention on money.

A Secret of Wealth Building is what you do with unexpected money

Here is another little secret to wealth building. Whenever you come by an unexpected sum of money, put it into your Life fund.

Let us assume you go out to dinner with friends and you are expecting to pay for yourself but instead your friends treat you. Perhaps you were expecting to spend £25 or £30 or even more for dinner.

Whatever sum you were expecting to pay, as soon as you get home that evening put it aside and pay it into your Life fund at the first opportunity. It doesn’t matter how large or small the sum of money is.

It may be you are expecting to pay only a few pounds for car parking but when you get to the car park, the meter is broken and the car parking fee is waived for the day. Put that in your Life fund as well.

A Secret of Wealth Building is don’t forget about the small sums

Now, it may sound silly because the more your savings grow, the less the small sums seem to be and the less the reason seems to be for saving them. But that is just an illusion.

Remember, you got to this point by saving small sums of money and if you keep applying the same principles your fund will grow and grow.

Your fund will accumulate compound interest so before long there will be interest on the interest. In two, three or four years you will be very pleasantly surprised at the amount you have in your account.

And it doesn’t matter how old or how young you are, the system works. Obviously, the earlier you start the more you are likely to acquire, but just watch it grow. Remember this: the more you appreciate money, the more money appreciates.

This Secret of Wealth Building is the foolproof way

This secret of wealth building is a foolproof way of accumulating a fortune. You cannot fail. If the worst comes to the worst and you overstretch yourself and desperately need to pay a bill, then the money is always there; it hasn’t been spent.

Try, however, to avoid dipping into the fund to settle the bill. If you are really pushed, borrow the money for the bill. Then, instead of saving your regular amount, pay half into your Life fund and half off the debt until it is paid. 

Never mind the interest rate. There is something very encouraging about continuing to save. I can assure you it works for me.

As time goes on and your Life fund grows, you will have built a useful buffer and be in a position to weather any storm.

I wrote earlier that the money in this account was not to be spent. I meant that in the sense that it was not to be spent on what we might term consumables, clothes, cars, things of that nature.

You can spend it on safe, capital investments that have a solid value and which you can reasonably expect to appreciate in value, such as a house or other real estate. Those items will, in effect, form part of your Life fund and will also grow.

But make sure that a substantial part of your Life fund continues to be cash. The person with liquid cash is always in a very strong position.



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