Everyone wants to become a Millionaire
but to become one, one has to accumulate it. We have to dream and dreams do
come true. To accomplish that dream we
need to have a GOAL. What we need is to
be committed to the goal we have set. On a lighter note, my Mentor once told me “Commitment is like being
pregnant — either you are or you aren’t”. There is no middle path.
Discipline
and commitment are the key factors if we have to be successful in our quest to
save a million dollars. We need to save at the top. “Savings should be the 1st expense of our Income”. You
see, there are two groups of people — Group A and Group B. Group A saves first and then spends and the Group B spends first and then saves (if there is any
savings left out) . We have seen Group B works for Group A.
Right from
the start of the day we all are inundated with messages that encourage us to
spend – News Paper / Shopping Mall / Radio / TV Advertisements like — Save Dh500 by buying this camera at
Shopping Festival — how can one save
money by spending on something that we probably didn’t need in the first place?
If we have to be successful Savings
should be the 1st expense of our Income”. We have to save at the
top.
One of the
most simple formula to become a Millionaire is to have a mind set of “Pay
Yourself First”.
Let me ask you a question … if
your Employer told you today that because of economic downturn we are forced to
have a Salary cut of 10% from this very month … what will you do ?????? Assuming your salary of Dh10,000 from this month would be Dh9,000 would you be
able to manage? Most of us would find a way of managing as there was no
other option as well.
Why can’t we save this 10% ?
We left our home countries after
leaving behind our parents relatives and friends to save for our future, earn more and to provide
ourselves and our families with a better lifestyle. We do enjoy a better
lifestyle here till the time we are here in UAE but many a time we forget the
other reasons like going back to our home country and don’t save. Majority of us will face a Huge
financial difficulties if we do not save
for tomorrow.
To become Millionaire it is not
what we earn is Important … however What we SAVE is of UTMOST importance. In
the many years I have spent in the UAE I have come across many individuals who
earn Dh50,000-60,000 a month and I know they will not save a million because
their habits are not right. And I have met people who earn Dh10,000 and
Dh12,000 a month and have saved good amounts of money because they
pay themselves first.
Many of us would seriously like to
know where does our Salary goes by the time months end. Isn’t it??
Let me take you through the
journey where the salary goes.
Specially in UAE during a typical month.
The first 10 days - 30% of Monthly
Income - you work for the landlord.
Next 7 days – 25% of monthly Income - you work for your child’s school
Next 4days – 15% of Monthly Income - you work for grocery (LU Lu / Spinneys )
Next 4 days- 15% of Monthly Income - you work for your
utility ( DEWA / SEWA) companies,
Next 4 days – 15% of Monthly Income – you work
for the bank — to pay your car installments / debts
At the end of the month you’ll
find you have worked the whole month for others and not yourself.
Pay yourself first. “Savings
should be the 1st Expense of your Income”
A key to a disciplined savings
habit is also to live within your means.
We often come across individuals
who spend 100 per cent of what they earn and some who spend 120 per cent or
more than their income (Credit Cards do help them / special Offer do help them)
Credit cards, special offers and promotions, advertisements from
banks and stores stating: Use this credit card and buy this 70” state of the
art LED TV and get a 40” TV free. Or quite often at Gitex we see — buy the
latest mobile and pay for it in 12 months. These offers entice us and very
often make us spend on items we don’t need or plan to buy. How often have you
gone into a shopping mall and come away buying everything else but the thing
you went there to buy in the first place?
Buy One get one Free … Except the better half everything comes
free.
Living within your means being
aware of what you need and disciplined enough to not purchase the things you
don’t — no matter how tempting the offer. Sure there are times when it makes
financial sense to go for a good offer, but it should be for the things that
are necessary or purchases we plan to make in the very near future.
Here are some tips on small things
that we can implement to help us have more money to save:
Pack-a-lunch — fast food lunches
are not only generally unhealthy, they also can be expensive over time. Make
and pack your own lunch before you go to work.
Skip going out to a restaurant —
have a candle light dinner at home with your wife or loved one. If you dine out
frequently with friends get creative and reduce one outing to a fun evening at
home.
Avoid getting trapped into a
flashy lifestyle: As my friend would say — he’d be a millionaire by now, only
if his neighbour didn’t keep buying newer and bigger things.
Give up
smoking — in addition to the health benefits, you also save money.
Make a list before going shopping
and stick to it.
Pay your
bills on time and avoid late fees.
Making small little changes in our
lifestyle can really help increase our savings by maybe 10 per cent. How often
do we go to a restaurant and tip the waitress 10 per cent extra just because
she was pretty?
There are many more such measures
that can be put in place. All of us need to periodically examine aspects of our
expenditure and evaluate its necessity. Yes, we have to enjoy life, I am not
saying that we have to take away the joy out of our lives but we have to be
responsible for our finances as well.
In the next parts we will look at how much you need to save on a
monthly basis to achieve a million and also take a look at the real secret to
going seven figures large; a miracle ingredient in your investment mix that
Albert Einstein deemed “the eighth wonder of the world”.
