You can learn a lot from successful New York Stock Exchange companies when it comes to managing your personal finances. In fact, the goal of these companies is the same as that of individuals, namely to use limited capital to create the largest amount of wealth possible over the course of time.
One of the primary methods that NYSE companies use to create wealth is to legally pay the least amount of tax possible. The less tax a company pays, the more money remains after tax to create further wealth. The same rule applies to individuals. Just think about it. If you can legally cut the tax, more of your income to use to build wealth
A second method they apply, which you can learn from, use to create wealth is to regularly plough back a portion of their income. This capital is then used to earn a high return. It grows over time and after a few years the company is in a much stronger, financial position than before.
Once again, the same rule applies to individuals. A requirement to build consistent wealth is to have a percentage savings plan, which is used to build capital. This is a must. Having a percentage savings plan simply means that you save a certain percentage of your income every month.
This may certainly sound unfeasible for those people who aren’t using a plan like this at present (all of their income is already being used!). However, a fundamental, economic rule is: An individual’s expenditure will always be adjusted to suit their disposable income.
Hence, it follows that a person will automatically spend less when their disposable income is reduced. As a result, if you can force yourself to implement a percentage savings plan, then your disposable income will be reduced and your spending requirements will also gradually decrease accordingly.
You will, therefore, find that you are able to make do with less – while you build wealth. The basis for this plan is behavior modification: Commit to a percentage savings plan and stick to it. This may be difficult at first, but it will soon become an easy habit.
When you start this type of savings plan for the first time, you should implement it on a very small scale so that the change is not too drastic all of a sudden. In this way, you could start by saving only 1% of your monthly income. Then, you could gradually increase this percentage until you have reached your target percentage.
A target percentage of 10% will place you firmly on the road to long-term wealth. This will ensure that you rise far above other people in the financial arena over the long term.
How large would your wealth reserves have been today if you had saved 10% of your income over the past 10 years? We’ve provided you with the two, most important keys to create great wealth above. Start using both of these clever methods immediately