Weekly Success Tip

Last week I shared with you a ‘Bar Stool’ view of our economy with regards to wealthy people. This week I’ll show you how they manage their money. In fact, I’ll share with you the rules of one of the world’s wealthiest families, the Rockefeller’s.

You see, the things that separate the wealthy from the poor are not that big or dramatic, but over time, they certainly add up. It’s pointless making more money if you don’t control that which you already have and earn each week.

One of the secrets to wealth is that you need to Actively Manage Every Dollar.

The Rockefeller family became one of the world’s wealthiest through the Standard Oil Company, however plenty of people in a similar situation have made money and then blown it. It’s how the Rockefeller's managed their money that made the difference.

Here’s their 10 rules:

1.    10% given to charity. Normally called ‘tithing’, this is one of the most powerful things you can do to affirm that the universe is abundant, and give it cause to send you more.

2.    10% to pay themselves first. Most people make the mistake of paying everyone else first, but never themselves. The classic book, The Richest Man in Babylon, exposes this truth and is well worth the read.

3.    10% for taxes. Depending on your tax bracket, it could be anything from 0 to 30% and higher. Many wealthy people pay only 0 - 20% in taxes legally. It’d be worth finding out how, don’t you think?

* The remainder of their income is then deliberately split between the following:

4.    Mortgage payments or rent.

5.    Household expenses such as food and clothing.

6.    Transport costs such as car payments, fuel, repairs or public transport.

7.    Fun and entertainment such as holidays, movies and dining out.

8.    Insurance – health insurance, life insurance, home and contents insurance, and superannuation.

9.    Miscellaneous expenses including debt servicing... and

10.  Business expenses.

Regardless of how you split your percentages, wealthy people control and actively manage their money. They know what their expenditure is and take time to consider this in relation to their income.

As I said, it’s pointless making more money if you don’t control that which you already have and earn each week.

ACTION STEP:

Regardless of whether you own a business or work for wages, you should run your financial life like a business.

This week's action step is to implement a system to track every bit of income and expenditure on a weekly, monthly and yearly basis.