How often do you pay your doctor?
How often do you pay yourself?
That last question seems like a strange one, doesn'tit? But do you realize that less than 5 people in every100 ever pay themselves. And, if you were to ask theother 95 why they don't, they would probably tell youthat by the time they pay everyone else, there is nothingleft for themselves!
Clearly, those 4 or 5 people in every 100 who do"pay themselves," have found a way around this problem.
Although the idea which they are employing has beenaround for centuries, hardly anyone today is aware of it.
What is that idea, you ask? Simply put it is this:
"They pay themselves FIRST!"
(This is better known as the Babylonian law offinancial success.)
A Part Of All You Earn Is Yours To Keep
If you think about it, you must admit this "law," orprinciple, makes a lot of good sense. Therefore, let merepeat it - "A part of all you earn is yours to keep!" Morespecifically, what you earn Monday morning is yours tokeep, so it should go directly into a special account thatyou do not have easy access to.
Your Financial Independence Account
What you earn on Monday morning probablyrepresents ten percent of your income. Therefore, youshould pay yourself at least that ten percent, right off thetop (i.e. not after everyone else has been paid).
From your "Financial Independence Account," youfirst pay your insurance premium, because thatinstrument creates your "Instant Estate." The remainderof the money then goes into savings, until such time asyou have accumulated enough capital to make a wiseinvestment. Remember, you do not "touch" this accountor the interest it will yield. Therefore, within a very shortperiod of time, you will witness sufficient progress to gainthe motivation and inspiration which you need tocontinue. Moreover, the knowledge that you have an"Instant Estate," if anything should happen to you, willgive you additional serenity of mind.
Orderly Debt Repayment Program
You could already have debts that seem to be eatingup your entire paycheck, leaving nothing for yourself.
But understand this-these debts can be retired.
(Although the amount of debt you have incurred will, ofcourse, determine the length of time it will take you toclear the slate.) And, for the purposes of the followingdiscussion, you must consider your mortgage or housepayment (probably one of your largest monthlypayments), as an investment, NOT a debt.
Debt Clearance Account
Whatever money you earn Monday afternoon andTuesday morning, should go directly into your DebtClearance Account. This represents twenty percent ofyour income. You should also sit down and draft a letterwhich you will send to all of your creditors, advisingthem of your plan.
However, before you mail the letter, you should firstdraw up a list of your creditors to determine whatproportion of this twenty percent each of them wouldreceive. It could conceivably be more money than theyare presently receiving, or it could be less; but whicheverway it works out, that will be the sum of money they willeach receive. Nevertheless, whatever sum they do receive,
they will receive it regularly, on the stipulated dates.
The following is a sample letter you could use as aguide in drafting your own letter:
Dear Whomever:
As you know, I am in debt to you for
$________, and I intend to pay you in full, plus
interest. In order to achieve this goal, I have
been devising a plan during the past few days
to put myself in a stable financial position. To
this end, I have opened a "Debt Clearance
Account" (DCA), and twenty percent of my
income is going directly into that account.
That will enable me to have sufficient
resources to live on, without worry or stress,
and it will prevent me from falling further into
debt.
Each week (or month) you will receive a
check for $_____ from my "DCA," until my
account with you is clear. I am aware that this
is not the figure I had previously agreed to pay
you, but I'm sure you will be understanding,
and appreciate what I am doing.
If you have any questions, please feel free
to contact me. I am quite excited about my
new plans and if you would like to have me
review them with you so that you might help
others who are in your debt, I would be
pleased to do so. Thank you in advance for
your kind cooperation.
Have a wonderful day!
Sincerely
John Doe
Understand that your letter to your creditor is astatement of fact and not a request-it is you who is incharge of your finances, not your creditors!
Be sure to have your letters neatly typed andenclose your first new payment with your covering letter.
Realize there is an "outside chance" that someunreasonable person will not want to cooperate with you.
They might even go so far as to phone you and attemptto intimidate you with threats of taking you to court, etc.
But please hold your ground, because there is no courtin the country that would not congratulate you, whenyou explained your entire plan for FinancialIndependence. Moreover, you will find that 95% of the
people, to whom you write, will be most cooperative.
Now give yourself a good "pat on the back," becauseas of this moment, you are well on your way to starting acompletely new way of life!
Let's briefly review what you have accomplishedthus far:
1. You have an instant estate if
anything should happen to you.
2. You have a savings account.
3. You are paying yourself.
4. You have an orderly debt
repayment program.
5. You have 70% of your income
to live on; to run the house and for
entertainment.
6. Your mind is clear to carry on
with the big ideas coming your way in the
remainder of this book.
From this moment on, never think "debt" again.
Remember, that has all been taken care of-so just focuson your savings account, and watch it grow. Repeat-I amwealthy; Money is good; I use money and I love people.
Metaphorically speaking, getting your presentfinances in order is very similar to having yourautomobile tuned up for a journey which you are aboutto take. Realize that as of this moment, you are tuned upfor your journey. And, although you might only beearning "x" number of dollars per year presently, youmust see yourself, on the screen of your mind, alreadyearning the new annual income which you havecalculated you need, to buy the things you want, in orderto live the way you choose to live.
If you are seriously interested in becomingfinancially independent and you have not yet acted on
the preceding ideas, I would strongly recommend you doso now. For to continue on to the next chapter, withouthaving done so, would be comparable to leaving on yourjourney with your car firing on only half its cylinders.
You can be almost certain that your automobile willbreak down, preventing you from reaching your desireddestination. But by making certain that everything isproperly "tuned up," you can relax and adopt a calm,
serene attitude, knowing that you will get to yourdestination; and you will certainly be able to enjoy thescenery along the way!
If you find that the task of getting your financialworld in good order for this exciting journey is somethingwhich you are not able to do alone, I would stronglysuggest you seek out professional assistance. (This issomething that almost all wealthy people do.) That is tosay, wealthy individuals follow the advice of financialexperts. It is similar in principle to the idea that if aperson's body were sick, he or she would likely seek outa skilled physician for advice. Moreover, you should alsokeep in mind that even healthy people, if they are wise,
periodically go to a doctor for a checkup. In other words,
you do not always need to get sick in order to get better.
It has already been brought to your attention thatvery few people ever develop real expertise in the area ofserious "financial planning."
Therefore, you should seek out a competentfinancial counselor, in much the same manner as youwould seek assistance, in matters of a legal nature. Thereare companies that provide this type of financial servicein every city. In some places they are not too easy to find;
but they are there, if you will only look for them.
I had the pleasure of being instrumental in thestart-up of just such a company, in the city of Toronto,
Canada in 1979 (the name of the company is The
McCrary Group). Today the company has almost fivethousand happy clients, who are well on their way tofinancial independence. The McCrary Group makes all ofits clients very aware of an interesting financial fact,
which I would like to share with you at this time.
This fact is, people fall into three distinct categorieswith respect to "finances":
1. Deficit position (in debt),
2. Break-even position (just
getting by, but debt-free),
3. Surplus position.
It would be very easy to "trick" oneself intobelieving, that if one were in category one or two, all onemust do is earn more money, and then one wouldautomatically graduate into the third category. But ofcourse, this is not necessarily true. For if a person is in adeficit financial position, it means they are in the "habit"
of spending more money than they earn. Similarly, if theyare in a break-even position, they are in the habit ofspending everything they earn. Since we are all"creatures of habit," it follows that earning more moneywould not necessarily change our overall financialposition. It is vitally important, that when you decide"how much is enough," you also design a new financialplan or have one designed for you which will force you todiscipline yourself-at least for a month or two-until youform the new habit of living by that new plan.
The next chapter, "The Image Maker," will help youto understand how and why you must begin to seeyourself already earning that new figure. But for the timebeing, just bear in mind that as your income increases,
the ten percent you are saving increases and the twentypercent that is going into your DCA increases, whichmeans that you will be able to retire your debts faster.
Furthermore, you will then be left with 90% of your
income on which to live. (I can see you getting excitedabout this idea already!)
The Image-Maker
The ideas contained in this chapter could very well be the
breakthrough for you, because Image-Making, once we get a
firm grip on it, is a truly dynamic idea.
I was speaking in Ohio a number of years ago, to a large
group of business people, when an elderly gentleman in the
audience suddenly stopped me as I was explaining the Image-
Making concept. He stood up and informed the audience that
he was sixty-five years of age, before he understood this idea.
He mentioned that he had read about it, thought about it, and
even talked about it, but he never really understood it until he
was sixty-five years old.
I want to suggest, right at this moment, that you read
this chapter over a few times, because most people live and die
and never fully understand the power of Image-Making.
Understand that we are relating this idea to "money" in this
book; but I want you to know that once you fully understand
the Image-Making concept, you can effectively use it for
whatever good you desire.
I am not able to tell you the exact date on which I myself
gained an understanding of Image-Making, but I can tell you it
has had as great an impact on my life as any idea I have ever
learned.
The knowledge of Image-Making eliminates competition
from your life, by moving you from the competitive plane to the
creative plane. You will soon understand therefore, that in
truth, the only competition you will ever have is with your own
ignorance.
This idea truly excites me. To be more accurate, I should
probably say sharing this idea with you excites me, because I
know how it can improve every aspect of your life. I honestly
love watching people grow or unfold as new ideas register in
their consciousness.
But before I delve into this idea, please understand that
everyone is using the Image-Making concept and everyone
always has. In fact, everything that has ever come into your
life has come as a direct result of the Image-Making process.
Therefore, if you will only become aware of the results which
you have obtained, you will realize you have already employed
this great mental tool. Just take a look at the results most
people obtain. Generally speaking, you could say it is quite
obvious that when they make use of their Image-Making
ability, they almost always use it the wrong way.
You Are An Image-Maker
Most religions teach that God is responsible for
everything made in this world and I would fully subscribe to
this proposition. However, as co-creators, human beings must
bear responsibility for WHAT God makes in their lives.
The Minister And The Farmer
A story I once heard illustrates this point exceedingly
well. Many years ago, a minister was driving along a remote
country road, when he happened upon a very beautiful farm.
The farm was kept in absolutely magnificent condition. The
fences were well cared for, the crops were a radiant green and
although the house was set back some distance from the road,
it was abundantly clear that it had a clean, fresh coat of white
paint on it. Well-cultivated flower beds encircled the house
and stretched all along both sides of the long, wide driveway,
leading to it from the road. In a neat row along both sides of
the drive as well, were straight lines of tall green poplar trees
reaching up to a picturesque pale blue sky. The lawns
surrounding the house were a deep rich green, and as well
manicured as any putting green ever was. Indeed, the entire
picture would have fit well on a post card, since it was
absolutely breathtaking in its splendor.
Then the minister looked off to his right, to the other side
of the road. Here the fields were ploughed, the earth was the
deepest black the minister had ever seen and he was amazed
at how the furrows had been plowed in such a way that they
stretched out in rows "as straight as clothes lines." Far off in
