A 2017 survey conducted by the forecasting firm Institute for the Future found that 36% of Americans rarely or never think about something that may happen in ten years, and 27% rarely or never think even five years ahead.
I believe this survey to be true, or a bit understated because of this next survey: According to a 2017 GOBankingRates survey, more than half of Americans (57 percent) have less than $1,000 in their savings accounts. OUCH!
You say, “If only I had more money.”
Jim Rohn says “If you had a better plan, you’d have more money.”
What can we do to change this in our own lives? Start saving right? But just saying “I’m going to start saving” will not solve the issue. We must have a predetermined method and a good reason or reasons to save. (Your why is extremely important not only in reaching goals but in reaching saving goals too).
So, let’s start with your why. Maybe you want to buy your own house. A conventional loan requires 20% of your own money down. If it’s a $300,000 house, that is $60,000. So your why is to have your own beautiful house so you and your family will have a nice safe place to live. You start by envisioning you and your family happy in that home. See it in detail. The beautiful inground pool with a slide in the backyard. The green landscape yard. The BBQ area. The kitchen with beautiful granite countertops, the six burner gas stove, the stainless steel appliances. You get the idea.
Now that you have the why and the vision of what you want, comes the action. Because just envisioning it without action is self-delusion. (Got that from Jim Rohn). Here’s the plan (Also from Jim Rohn). The 70/10/10/10 plan.
For each dollar that comes your way (By gift or by labor).
70 cents (70%) to live on. Never spend more than 70 cents.
10 cents to give. It’s for charity or church. 10% for charity. (This is according to the word of God. A Tithe).
10 cents (10%) to investments to make a profit. (Your own business or stocks, etc).Also known as working capital. Money that goes to work for you to create income).
10 cents (10%) passive income. Savings (For your why). (This is after you have created a rainy day fund or an emergency fund with your first goal of 3 months of your income for rainy day savings and then increasing that to one year over time). Once you have 3 months of income saved up, create a second savings account for your Why. You can call it what you like. In this example your House Savings Account. You could fund your rainy day account after it reaches 3 months of income with part of the 10% savings, or take money from your investment earnings to continue to fund your Rainy day fund until it reaches a years worth of income.
Now you may not be able to do this plan at this point in your life. You might be in a spot where you’re only able to do 97/1/1/1. As Jim Rohn has said “It’s not the amount that counts, it’s the plan that counts. You start out doing this regularly and increase those last three brackets as time goes on. Then as more time goes on you’ll be able to live on the 10% and 90% you can choose what to do with. Give it away, build non-profit foundations, etc. Whatever you choose. You’ll be able to choose because you’ll have a choice.
“If you change, everything will change for you.” – Shoef (Jim Rohn’s mentor).
So let’s break this down in order with an example. You get a paycheck of $1000.
$100 to give to God/charity
$100 to your First savings goal: Rainy Day Savings until it reaches 3 months of your monthly income. So if you make $4000 a month as an example, you want saved as your first goal $12,000. (Then open another savings account for Rainy Day savings which will be a total of $36,000). Keep putting your 10% to savings.
$100 to Investments: As an example, you could take this $100 and invest it in stocks.
$700 to live on. Pay your bills, etc.
Okay, so you can’t do 10/10/10/70. Let’s say it’s 1/1/1/97 to start with.
Same example $1000 paycheck:
$10.00 to give to God/Charity
$10.00 to Rainy Day fund
$10.00 to Investments
$970 to live on.
Remember: As Jim Rohn has said “It’s not the amount that counts, it’s the plan that counts.
You may feel it’s a waste of time to only do 1/1/1/97 or it’s not worthy enough. Believe me, start out with this habit, and watch those first three brackets of 1/1/1 increase over time. It’s in the doing that creates the habit. If you don’t start somewhere, you’ll never start at all.
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