The Money Pizza

Last month, I attended a program: The Millionaire Mindset Intensive conducted by a successful event management company. The program was conducted by a certain T. Harv Eker, an Irish bloke who is now living in North America. Obviously a successful and wealthy bloke.

His partner, who spoke on the first 2-days in that program taught everyone how to be powerful about money.

And it's like my favourite food and topic this month: Pizza.

So here goes:

The concept here is: Pay Yourself First.

After every incoming money from whatever source, like salaries, commissions, bonuses, even profits if you are business person, or a windfall of some kind (think of a lottery, lucky-draw, contest, competition prize money), the monies must be strategically placed in separate jars (yes, the cookie jar) until a habit has developed. And eventually, for practicality purposes, in separate bank accounts.

The monies are divided using the following ratios:

• The First 10% is placed in an account labelled as : Financial Freedom Account. This is then used to buy investments that will yield either residual or capital growth or better still, both. This money is for this purpose only. And never touch this money to pay a debt, or an expense, or even use it in emergencies. NEVER. All right, got it. So what about the balance 90% of the money.
• The next 10% is placed in an account labelled as: Long Term Savings for Spending. Yes, as the name suggests, it is a Long Terms Savings for Spending. Example: accumulate in this jar to make big ticket items purchase such as a Flat-screen TV, high quality water-filtration devise for the home, plan a renovation of the home, decorations, etc. It is saved for the purpose of spending. You can also use this fund to pay off a credit card or a nagging student loan, if it helps you bring more peace of mind.
• Now there's a balance of 80%. Therefore the next 10% is now placed in this jar called: Education Account. Use this money to buy books, video or audio materials on enhancing your life skills, or career skills. Even to attend a Conference, Seminar or a course on development of one-self or for a professional skills enhancement.
• For all our necessities in living such as rentals, mortgages, car-payments, fuel, groceries, utilities, clothing, children's schooling expenses, we allocate 55% of funds for this purposes. And if we cannot live in this amount, then a simplification of life is necessary, and yes, cut out that high-speed broadband for an entry level broadband. Yes, scale down the fuel consumed, yes, eat cheaper. Use less resources and live within this budget. Then think of ways to increase earnings so that this budget can be higher.
• Total now is 85%. So there's 15 percent to go. The next 10% is for our PLAY jar. Yes, to play! Yes, go for that massage, spa, picnic with money where your family can enjoy riding on motor-boats, have a barbecue. In other words, nurture the person doing all the work. The rule is that this jar must be empty by month end! Enjoy!
• And the last 5% is for our Give purpose. Is there a purpose that we support: do you like sponsoring books for the disabled child in your neighbourhood, or contribute comics to your community center, or support a cause such as autistic child centers, or buying a hearing aid for someone in need, etc... you get the idea?

Yes, it sounds simple but is it easy to do? Not necessarily, unless there is a decision and an action.

I don't know about you, but I think this is damn good advise and I have started following it.

I used to have my own method along this line after reading the book: The Richest Man in Babylon by George S Clason, however, this method by this Harv-Eker chap seems more far-fetched and will yield long term results.

So, as this month comes to a close, start a strategy to implement this. Contact me for more conversations and ideas, if you need.

Hmmm.. pizza seems to taste better and better!