The Simplest Way Ever To Become Rich. Results Guaranteed.

become richWhat if I told you there was a simple way to become rich? Would you be interested?

What if I told you that it would only take you 10 minutes to complete and you would only have to do it one time? (Hint: it does not involve robbing a bank.)

Some of you are getting excited while others think I am full of it.

What if I told you that the wealthy, the government, mutual fund companies, and many of the other companies you deal with are already using this strategy?

I’ve even used this simple trick to go from $10,000 in credit card debt to having close to $1 million in savings.

Would this make it more believable?

The Simplest Way Ever To Become Rich

Pay Yourself First

So what is this revolutionary way to become rich? Simply put, it is called pay yourself first.

I know, it doesn’t sound revolutionary. But if you aren’t saving anything, paying yourself first is revolutionary.

This is because you will actually start saving money and change your financial life as a result.

Think about this for a minute.

Look at your life right now. If you keep earning and spending money the same way for the next 10 years, where will you be financially?

If you are living beyond your means today, you will be in worse financial shape in the future.

You will have more debt, more stress and headaches, wondering how you are going to survive this month.

If you are just scraping to get by today, you will be just barely getting by in 10 years too.

The bottom line is you can’t become rich or even break the paycheck to paycheck cycle if you aren’t saving anything.

But if you do start saving money, your finances will change.

You will have money when emergencies happen.

You will have money to enjoy life more. And you will have money to retire one day.

Still skeptical on how paying yourself first will work?

When we first started paying taxes to the government, we had to mail in huge checks by April 15th based on our income from the previous year.

Back then the government never withheld taxes from our paychecks.

But the government quickly found out that most people spend first, save later (or never save at all) and as a result, didn’t have the money pay their taxes.

The solution was simple.

The government started to pay itself first. The government takes its money from your paycheck before you get paid.

This guarantees the government always gets their money.

Mutual fund companies do the exact same thing. If you invest in a mutual fund, you pay an annual expense to keep the fund running.

But, you never get a bill for this fee.

That’s because the mutual fund takes the money out of the fund first.

If a mutual fund is charging a 1% annual fee and it returned 5% for the year, it really returned closer to 6% for the year.

The fund took their fee (the fee you are essentially paying) off the top (paid itself first) and the return that was left is what you earned.

The common theme here is that by taking their money first, they guarantee they get paid.

And if you pay yourself first, you can guarantee you will build wealth.

How To Become Rich By Paying Yourself First

pay yourself first

So how can you take advantage of this concept yourself and become rich? Simple really.

You need to start saving money automatically.

Whenever you get paid, you have to make it a point to put a portion of your income into savings before you spend a dime.

And today, it is easier than ever to do this.

Here are the best ways to start saving money automatically.

Invest In Your 401k Plan

Your first option to automate your savings and pay yourself first is your 401k at work.

That money gets taken out of your paycheck first, even before the government gets their cut!

By investing in your 401k plan, not only do you pay yourself first, but you also lower your taxable income.

This means you end up paying less in taxes for the year.

Therefore, if you are covered by a 401k plan at work, make it a point to start investing in it.

Set Up An Automatic Savings Transfer With Your Employer

Many employers not only offer to direct deposit your paycheck, but they also will split your paycheck for you too.

In most cases, you simply have to fill out a form with your savings account information and the percent or amount of money you want to put in your savings account.

For example, you could choose to set up an automatic savings transfer of $20 deposited into your savings account and the rest into your checking account.

Filling this form out will take you less than 5 minutes.

The only information you need is your account number and the routing number of your bank.

Set Up An Automatic Savings Transfer Yourself

If your employer doesn’t offer to split your paycheck you can do it yourself.

Log on to your bank account and set up an automatic savings transfer there. Just schedule it for the day you get paid and the amount.

Going forward, money will automatically transfer to your savings account on the date you selected.

When it comes to paying yourself first by putting money into a savings account, you need to be smart about it.

By picking a bank that offers a decent interest rate, you will grow your wealth faster.

Find the best savings account for you. Click here to learn more.

Here is how I earn the most money on my savings while still keeping my money safe.

I have my savings account with CIT Bank. They are an online bank that offers one of the highest interest rates in the country.

And this makes a difference over the long term.

For example, let’s say you have $1,000 in your savings account earning just 0.50% interest.

At the end of the year you will have made $5 on your money.

But if you took that $1,000 and saved it with CIT Bank and earned 2.25%, you would make $22 on your money.

And thanks to compound interest, as the years go by and you save more money, the interest you earn explodes.

Look at your savings balance between these 2 bank accounts assuming you save $1,000 a year for 20 years.

Ending Balance Bank Accounts

By just choosing the right bank, you can make your savings go farther.

 

Supercharging Your Path To Wealth

Once you are saving a set amount of money each month and are earning a decent interest rate, you might think all is well.

While this is a huge improvement over not saving anything, there is one more thing you can do.

Back when I was growing up, I paid for everything in cash as debit cards weren’t an option and I couldn’t get a credit card as a teenager.

Since I paid cash for everything, I always had spare change from my purchases.

I don’t know why, but I always took this spare change and put it into a jar.

As the end of the year approached, I sat down and organized the change and rolled it up into coin wrappers and took it to the bank.

I regularly would end up with $200 or more that I would deposit into my savings account.

Fast forward to today and I still use this trick. But thanks to technology, it is simpler than ever.

I pay for most everything with debit or credit cards, so there is no collecting of change.

As a result, I don’t need to spend a Saturday afternoon organizing the coins and wrapping them either.

I simply use an automatic savings app that does the rounding up for me.

There are two apps that that round up change that I have used and recommend. You can choose the one that best meets your needs.

The first is Worthy Bonds. They offer you 5% interest on your savings.

The process is easy to set up and once you set up your account, you don’t do anything else.

Everything is taken care of for you.

Understand that this isn’t a savings account.

The way Worthy Bonds work is they take the money you save and loan it out to small businesses.

Worthy charges these small businesses interest on the loan and part of that interest is paid to you.

So while this isn’t a savings account, it is one of the safest ways you can earn 5% on your money.

 

The other automated savings app to save your spare change is to save with Qapital.

With Qapital you can choose to save a set amount on a regularly scheduled basis or you can have them round up your purchases and save the difference.

Or you could save a set amount and round up your spare change.

And you can save for multiple goals too.

If you want to round up your purchases to save for a vacation and holiday gifts, you can. Qapital will simply split the round up about between accounts.

 

While those apps are great at rounding your spare change, there is one other way you can pay yourself first.

It is to invest in the stock market and to use Betterment.

Why do I suggest Betterment?

They make investing simple. In less than 10 minutes you can have an account opened and set up an automatic monthly transfer.

Betterment takes care of the rest.

It’s the ultimate set it and forget it.

 
How much money can you expect to save using these apps?

By rounding up my purchases last year, I saved close to $750.

Add in the 5% interest I earned from Worthy, and my total savings come to just less than $800.

My friend uses Betterment and in 1 year he invested less than $100 a month.

Here is what your savings will look like with each option.

We will assume that you save $1,000 a year for 10 years and earn the following interest rate on each account:

  • Traditional savings account: 0.50%
  • CIT Bank savings account: 2.25%
  • Worthy Bonds: 5%
  • Betterment account: 8%

Ending Balance After 10 Years

As you can see, earning a decent interest rate has a major impact on your savings.

I just caution you not to focus solely on the interest rate.

This is because when you invest in the stock market to earn a higher return, you do risk losing some money if the market drops.

This isn’t to say you should avoid the stock market, but rather understand how risk and return are related.

Your Path To Grow Your Wealth And Become Rich

the-path-to-wealth

The best option for you to grow your wealth by paying yourself first is to take a combination of ideas.

This is what I have done and have had tremendous success with it.

Success With Saving Money Automatically

  • Open up a savings account and save a set amount every month.
  • Use an app to round up your purchases to boost your savings by $1,000 a year.
  • Start investing every month with as little as $25.

The first step is to set up an automatic transfer to a savings account.

When I first started out, I was saving $20 per paycheck or $520 a year.As my income grew, I slowly increased my savings to $100 per paycheck or $2,600 a year.

Additionally, I was investing my money too. When I started, there were no apps that rounded up my purchases.

Instead, I was investing $25 a month in to a low cost mutual fund.

Again, as the years passes and I earned more money, I increased my investment amount to $150 a month.

Fast forward 18 years and here is where I stand.

Paying Myself First

The best part in all of this is that once I set everything up, there was close to zero additional work for me to do.

I would only work on this when I wanted to save more money.

If I didn’t do this I would be in the exact same financial shape I was 15 years ago.

How sad is that?

By just taking 15 minutes to set up an account and a monthly transfer, I have close to $100,000 to do whatever I want with.

I could use it for retirement. I could buy a car. I could take a couple killer vacations.

All because I took advantage of the simplest way ever to become rich.

Why Automating Your Savings Works

process-automation

It’s no surprise that we are all busy creatures. We forget to do things all of the time.

You intend to invest some money this month but then a text comes in or it’s your turn to play Words With Friends and you forget to make the investment.

By automating, you never have to remember.

It is already taken care of for you. You are guaranteed to save or invest.

Better yet, it works because you never think to cancel or stop the transfer.

Think about your expenses.

I bet you have a handful of expenses where you are automatically charged for a service every month.

Companies are basically using automated savings in reverse to get you to pay for their service.

They know that if they can sign you up for automatic payments, odds are you will always pay.

The only way you wouldn’t pay is if you canceled the auto pay feature or you didn’t have enough money in your checking account.

And if you don’t have enough money, chances are they will just charge you with an additional fee so that they make even more money off of you.

In fact, I am guilty of this!

I bought a couple magazine subscriptions from a company online to save money. They told me that my subscriptions would automatically renew.

I made a note to cancel the auto-renewal feature about a year ago.

Have I canceled?

Nope. I just got an email letting me know my subscription renewed!

If companies, the government, mutual funds, and the rich are all using this strategy, there has to be a good reason behind it.

After all, they all rake in millions, even billions every year. The reason they use this is because it works.

I’ve had it work for me.

I’ve had it work for friends of mine who I have helped with their finances. I am sure it will work for you.

All you have to do is take 10 minutes right now and do 1 of 2 things.

  • If money isn’t tight, open a savings account with CIT Bank, and set up the transfer so you save money every single month.
  • If money is sight, open an account with Qapital to take advantage of rounding up your spare change. Their users save on average of $1,500!

How easy is that?

The key though is to do it before your friend plays their turn in Words With Friends so you don’t forget!

And don’t get caught up with the details.

If you are saving with CIT Bank, set up a transfer of $100.

If you are rounding up with Qapital, round up to the nearest $1.

Don’t overthink things. Just do it.

Final Thoughts

The simplest ways ever to become rich is paying yourself first. Make this effortless by saving money automatically.

You can spend time with your family, working on hobbies or even sleeping and you will be saving money.

Set it and forget it. It doesn’t get easier than this.

21 thoughts on “The Simplest Way Ever To Become Rich. Results Guaranteed.”

  1. I am really asking myself if there is such a way to become rich. After reading your article, I feel I am giving it a try. It took me 15 minutes actually. Haha! I feel glad that I have started saving for the future. I just hop it works.

    1. I’m certain it will work. In fact, you will probably look back and get mad at yourself for not doing this years ago!

  2. I totally agree- paying yourself first is powerful. Pretty soon years have gone by and you’ve paid yourself first every single month! I love that automating our savings takes the decision out of our hands every month (since otherwise there may be some months when we would not be so dedicated to saving or think we had too many expenses to do it). Great post!

    1. I agree…I’ve been saving this way for years and love that I never have to think about it. It forces me to live on less every month and every month, my savings grows larger and larger.

  3. Just this year I started automating my investments and savings and it has really helped! I wish I had started sooner. It’s makes it much easier to budget the left over money rather than trying to figure out how much I have left over to save.

    1. In most cases, when people save what is left over, they save nothing simply because they spend everything and don’t have anything left to save. I can’t emphasize it enough – pay yourself first by savings first and then spending what is left over!

  4. Automatic deductions are the way to go. I’ve been paying myself for years with my Roth IRA and 401k. I’ve never missed the money once.

  5. Jean @ NearlyRetired

    I’m nearing the end of my working career, and am SO grateful to have been doing this for many years. Having to think about whether to invest every week leads to all sorts of potential excuses and rationalizations to spend money elsewhere. Autopilot investing has been hugely helpful for us, and is a large part of why we’ll be able to retire in three more years. So please, anyone who’s reading this, take Jon’s advice and start today! Your future self will thank you.

    1. Glad to hear it has worked out so well for you. It’s so true that you will come up with excuses to not invest. You are better off just getting your money invested than giving yourself the option to spend it instead.

  6. Excellent well written post. This is precisely how i started to get together my first deposit, although I had a second job also. I put the money into various savings accounts immediately, then made do with whatever was left.

    Id put it off for years, but I’m glad i did it now. I did indeed get mad at myself every new years!

    When you combine this with a strategy of recycling your money through below market purchases and/or renovation to increase property value, its powerful stuff!

    Rob

  7. Yes, we do that. I’m not sure that simply and only doing that will make us rich but it isa good start. This way we build capital which is ready and liquid for investing opportunities when I spot any.

  8. Great article. I have used forced savings for years and it has worked out great. However, the first forced savings that everyone should sign up for if it is available, is a matching 401k or 403b plan. Any plan with any type of matching, even if it is just 25%, is like getting free money. If you are concerned about the stock and bond market, you can just invest in a money market fund. It may pay less than 1%, but with the matching, it could work out to as much as a 100% return if it pays 100% matching. Plus you get the tax benefit (what you put into the 401k or 403b reduces your taxable income, and anything earned in the account is tax deferred).

    1. Good point in mentioning that your 401k or 403b is most investors first choice to take advantage of automated investing.

  9. Good example of how the government knows that it needs to collect taxes first instead of waiting for the bill later. I kind of view it as paying myself 20 years in the future, but at least for every dollar I give my future self now I can expect 7 back!

  10. Pay myself or pay others? I like money, I’d like to keep most of my money and I’d like to be rich. I can personally affirm that this works. Automate like crazy and increase every penny and dollar you can. You will never get angry at yourself for having “too much money.”

    1. So true Lance. I’ve never met someone upset with how much money they have. It’s usually the other way around – upset with how little they have.

  11. Interesting view, and I agree. Automation in investment helps a lot, because you can just forget about it and overtime (hopefully) you’ll get a nice return. I like how nowadays the system even becomes more sophisticated as it can rebalance itself according to your investment goal.

    1. Technology is certainly helping to take care of some of the issues many investors have faced, namely rebalancing and tax loss harvesting.

  12. Automate paying yourself first. It can be so easy to do, and can set the “budget” that you have available to spend. It’s an important step in the overall process of building wealth for many people.

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