Pay yourself first

Pay Yourself First: The Most Important Financial Decision You’ll Ever Make

Are you stuck on the financial hamster wheel, trading your precious time for money but never getting ahead? You’re not alone. Most people believe they can earn their way to financial freedom, but the truth is, you can’t out-earn poor financial habits. The real breakthrough comes from a simple, powerful principle: pay yourself first.

Why Most People Stay Stuck Financially

• Trading time for money keeps you running in place:
  If you only make money when you work, you’re always limited by your hours and energy. True wealth comes from building assets that work for you—even when you’re sleeping.
• Spending everything you earn (or more) means you never build true wealth:
  If every dollar that comes in goes right back out, you’re working for everyone else—your landlord, the grocery store, the car company. You have to break the cycle by keeping a portion for yourself.
• Relying on willpower alone rarely leads to lasting change:
  Most people try to save “what’s left over,” but there’s rarely anything left. Systems beat willpower every time. That’s why automation is key.

The Breakthrough: Decide to Pay Yourself First

The most important financial decision you’ll ever make is this: A part of all you earn is yours to keep. Not for Michael Kors, not for Mercedes-Benz, not for anyone else—just for you and your family’s future. This is about honoring your future self and making your financial freedom non-negotiable.

How to Pay Yourself First: The PYF Percentage

1. Choose Your Percentage:
   Decide what portion of your income you’ll set aside before you pay anyone or anything else. I recommend at least 10%. If that feels impossible, start smaller—just start. Every time your income increases, raise your percentage. The habit is more important than the amount at first.
2. Automate It:
   Set up automatic transfers so you never have to think about it. When your savings happen automatically, you remove the temptation to spend. Out of sight, out of mind—until you see your wealth growing.
3. Harness the Power of Compounding:
   The earlier you start, the more your money works for you. Compounding is like planting a tree—the sooner you plant, the bigger it grows. Even small amounts, given enough time, can become life-changing.

What If You Think You Can’t Afford It?

If you’re convinced there’s no way you can pay yourself first, consider this: I once told Charlie Rose the story of a man who never earned more than $14,000 a year, yet retired with over $70 million. It’s not about how much you make—it’s about what you consistently do with what you have. Start with what you can, and build from there.

To watch the whole interview, visit Bloomburg.

Tony’s Insights

• Start Small, Grow Fast:
  Even 1% is better than nothing. The key is to build the habit and increase over time. Progress, not perfection, is what creates momentum.
• Make It Non-Negotiable:
  Treat your PYF percentage like a bill you must pay—your future self is your most important creditor. If you make it optional, it will never happen.
• Invest, Don’t Just Save:
  Once you’ve built your savings habit, put your money to work in investments that align with your goals and risk tolerance. Savings alone won’t get you there—your money needs to grow.
• Celebrate Progress:
  Every time you increase your PYF percentage, celebrate. Progress equals happiness. Acknowledge yourself for every step forward, no matter how small.

Take Action Now

Decision is the ultimate power. Don’t wait for the “right time”—start today, even if it’s just a small step. Automate your savings, commit to your future, and watch the magic of compounding transform your life.

Remember: Where focus goes, energy flows. Focus on building your future, and you’ll break free from the hamster wheel for good.