3 Money Habits That Separate the Rich From the Poor

3 Money Habits That Separate the Rich From the Poor

by Jim Rohn

Here is an exciting thought! Why not work full time on your job and part time on your fortune? And what a feeling you’ll have when you can honestly say, “I’m working to become wealthy. I’m not just working to pay my bills.” When you have a wealth plan, you’ll be so motivated that you’ll have a hard time going to bed at night.  So if you will indulge me, I would like to share a simple formula for creating wealth. Here’s my thought on how money should be allocated.

The 70/30 Rule

After you pay your fair share of taxes, learn to live on 70 percent of your after-tax income. These are the necessities and luxuries you spend money on. Then, it’s important to look at how you allocate your remaining 30 percent. Let’s allocate it in the following ways:

Charity

Of the 30 percent not spent, one-third should go to charity. Charity is the act of giving back to the community and helping those who need assistance. I believe that contributing 10 percent of your after-tax income is a good amount to strive for.

The act of giving should be taught early, when the amounts are small. It’s pretty easy to take a dime out of a dollar. But it’s considerably harder to give away a $100,000 out of $1 million. You say, “Oh, if I had $1 million, I’d have no trouble giving $100,000.” I’m not so sure. $100,000 is a lot of money. Start early so you’ll develop the habit before the big money comes your way.

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