Save 10% of your income

I first read this suggestion in “The Richest Man in Babylon” years ago, but I didn’t take action. 10% seemed such a small amount at the time that I just didn’t do it as it didn’t seem worthwhile. I didn’t set aside a separate account, but said to myself

“I’ll just put some money away when I have some left over at the end of the month”. Of course, that never happened!

Finally, I started a separate account called “Cash” and started putting 10% of my income into it AS SOON AS the money appeared in my account rather than at the end of the month. It was pretty pathetic at first but I had at least started. Now that account has a tidy sum in it and I like watching it grow in small increments each month.

If you saved $20 per week for five years in a savings account with an interest rate of 6% paid monthly, after five years you will have $6,214.33 in this account. If you managed to put $100 away per week, you would have

$31, 071.66 in five years time.
Imagine if you had done that five years ago!

This account is not a savings account in that you intend to spend it eventually. It is a lifetime account, one you leave there as the basis to your personal wealth. It should only be used for growing your assets and investing. It is important to do this and recommended by so many wealth coaches for the following reasons.

1)       Discipline with money – You have committed to save, you have taken action and you are mastering this amount of money. As it grows you will have the discipline to carry on saving, and you won’t spend it. This proves to yourself that you can control money. It doesn’t control you. You are a saver, not a spender. This is important for your mindset about money.

2)       Attraction for more money – This initially tiny but growing amount becomes like a gravitational field and attracts more money. Interest compounding on the account over the years makes the growth accelerate. Compound interest is when interest is paid into the account, which in turn grows the principal, and in turn generates more interest.  

3)       Basis for further investment – As the amount grows you can use some of it for further investment; not spending, but investment to grow your wealth.

4)       A safety net – Although this account is not meant to be touched, it is a safety net in case of emergency. It is there if you lose your job, or you need some expensive surgery, or you are in an accident, or a loved one needs an operation they can’t afford.  Life will throw curve balls at you! Having some money in an account you won’t touch is important in case you do really need it someday.

Take action now and open an account for your 10% money.

Think of it as your discipline, your safety net, your dreams, and your money confidence and watch it grow.

Don’t spend it on something you think you really want, as chances are you will want something else in six month’s time. It is not for spending. It is for your future. If you have the discipline to do this, you will also see a change in your attitude towards money quite quickly. 

What is 10% of your income now? Will you commit to putting that into a lifetime account? How much will you have in this account after five years? 

Get some financial education

You need to know the financial basics. If you don’t know what assets and liabilities are or if you only have a vague sense of possibilities in investments, then you need to get some financial education. Read some books (there is a list under Recommended Reading), see a financial advisor or go to one of the many online sites that offer financial education. Once you understand how money works and how it can best be used, how you think about money will change.

Find out about investment options. Many people think the jargon around investing keeps them out of the game. But it doesn’t take too long before you understand some of the concepts and you can see there are many other ways to make money that are interesting and inspiring. People invest in many different ways depending on their interests and risk profile. You just need to have some curiosity and understand that the knowledge will benefit you, if you learn and take some action.

What are some of the questions you have about money and investments? Where can you find out the answers?
Take Action: Spend less than you earn

This may be basic, but so many people don’t actually do it!

For example, when you think about how much your salary is, you think of the gross amount (the amount before tax and deductions). If you divide this by 12, you may have a healthy monthly figure. But if you take out taxes, deductions like superannuation, insurance and then repayments and regular bills, it may not leave you much left over for the fun stuff. So you need to know what you earn AFTER deductions and what you are spending.

Spending money is addictive and a vice everyone enjoys to some extent. You work hard to buy more stuff and as you earn more, you spend more. If you get a raise, then you can buy that new car or new clothes, or get a better apartment in a better area.

But is it possible to do things differently?

•          Think before you buy. Do you really need this? What does it add to your life right now? Are you buying it because of what you want other people to think? Will you still want it in six months? If not, is it worth it?
   
•          Analyse your credit card bill. Go through the paper copy or download it. Categorise and total it based on the expenses e.g. supermarket shopping, takeaways and restaurants, entertainment etc. Look at how much you spent on things that weren’t necessary. How many items on your bill do you not even remember? Are you surprised by how much it adds up to?

How many of those expenses could you scale back and how much would it save you per week or per month?

If you take action to control your money, you will find more opportunity to enjoy your life and your job.

You can invest in self development, perhaps towards a different career altogether. If you have some extra money, you can pay off some debt so you don’t feel trapped where you are now. You will feel there is hope that you will make it out of the situation you are in now.

The money you earn can be used to leverage yourself out of your situation and into opportunities you cannot yet even conceive.

Here are some initial steps.  

Assess: What are your finances like now? 

Be honest! You are only trying to fool yourself if you exaggerate any of the figures or reduce your debt levels on paper.

Give yourself a financial health-check.

·         How many days/weeks/months could you live with your present lifestyle if you had to stop work tomorrow?

·         How much have you saved for emergencies?

·         What is the value of your assets? (what you own e.g. house, car, investments

·         How much is your total debt? (what you owe other people e.g. mortgage, personal loan, car finance)

·         What are you worth? (total assets – total debt)

·         What is your income every month? Are you dependent on your job, your spouse, or the government for this income?

·         What are your expenses every month?

·         What are you left with every month? (income – expenses)

·         How much do you invest every month?

Assess: What do you want financially?

People don’t usually think too much about what they want financially because it seems obvious! They want enough money to fund their lifestyle and buy the things they want. They want to be able to pay the bills, keep the family happy and have a holiday every year. But have you ever written down what you want financially for the rest of your life?

Have you thought about what you want in retirement? Or if you want to be financially independent before then, how much would you need to accomplish that?

·         What do you want your life to be like in the future?

·         How much money will you need to live that life?

·         How far are you away from when you want to retire?

·         How much money do you need to save/invest  to have a great lifestyle when you retire?

You need to be specific with the numbers and make it tangible, as these are the first steps towards your financial plan. A good start is to see a professional financial planner who will help you with your financial goals and the practicalities of how to achieve them. It may cost you some money now, but in my experience, it will make you a lot more in the long run!

But this is not true. It is important to remember that you are worth more than this, and that you will not continue to allow bad treatment.  

What can you do about these situations?

You need to focus on the areas you can actually control as this is where you can make changes. It is difficult to change someone else’s behaviour. But you can alter your own behaviour by avoiding that person, refusing to engage with them and not reacting to situations. You can also report them through the appropriate channels if the problem is serious.

What can you control about the situation you are facing? What is within your power to change?

You have the following options:

·         Talk to the person involved. Ask them about their behaviour and involve a third party as a witness if you are uncomfortable with this. Put it in writing if you like, but make your feelings known. However, this is easier said than done as many of us avoid conflict and painful situations.

·         Don’t respond in kind. You will keep a stronger position if you do not resort to tactics that put you in the same category as the other person. It can actually be more powerful and disarming to be positive and kind to the other person and demonstrate that you are not bothered by them. By reacting, you give them power over you.

·         If you are not sure how serious the situation is, or if you just want to know your options, you can talk to someone else in your HR department. Be careful to make the situation hypothetical so as not to jeopardise your position, especially if the person involved is senior. You can also try talking to friends, Employee Assistance programs, use anonymous phone help-lines or go online for support. It is important to discuss the situation with somebody as you will feel more stressed if you don’t have emotional support.  

·         If the situation is serious, report the person to your direct manager or HR manager. This will involve talking about the details as making a complaint like this can be a serious move, so take any emails, or notes on situations that have happened. You need to be calm and rational and not overly emotional in your approach. Find out whether anyone else has been treated in this same way. It is likely that this person has behaved in the same way before which will help your case. Before you give any details, make sure the conversation will be kept confidential.

·         You always have the option to leave this position or the job entirely. If things are very bad at work, it is better to walk away than continue to be subjected to a situation that will wear you down with stress and anxiety. The majority of work situations are not like this, so move on and you will find somewhere more to your liking. You may need time to evaluate your options and look for different work, but this may be the best option.

What are the three steps you will take to address your situation at work? 

Everyone has ways in which they like to work and there are different styles of management for different types of people. However, some managers use the same approach with everyone, so there will inevitably be conflict. I have been in situations like this before for the following reasons:

·         I feel my work and decisions are undermined by my manager who questions my abilities 

·         I am micro-managed and have to account for all my time, making me feel like I am not trusted

·         I don’t respect my manager or the way they works or treat people

What are your specific problems with your manager?

Don’t be put off though! There are some fantastic managers out there who know how to look after and appreciate their people. They manage to the individual’s style and not with a broad brush approach. If you are a manager yourself, or if you want to be one, consider how you would like to be treated and appreciate individual differences in styles of work.  

How do you want to be treated by your manager? 

•          Money: The job brings in money needed for the rest of life. It gives income security and may be within an industry that pays well. When people are well qualified for a job they are paid more than for a job they are new at. Starting at the bottom again means less income and families rely on the money for living. All these add up to make people feel they have to stay in their current job as moving is too risky. 

•          Status: If people feel they have a certain status based on how much they earn, or the job they do, they may also feel trapped by the need to live up to what other people think of them. For example, going from an accountant to a dressmaker may be considered a status drop as well as an income drop, even though it may be what someone really wants to do.

•          Perception: Sometimes people are trapped by their own idea of what opportunities they have and they don’t know how to get out of the situation. They perceive that there are no options for them other than to stick with the job they are in.

Do you feel trapped in your job? What are you trapped by?   

The theory of ‘learned helplessness’

The theory of learned helplessness explains how people can become trapped in situations that they feel they can’t get out of (Source: Martin Seligman). When life is painful or difficult and people learn to live with their problems for a long time, it is difficult to see a way out, even when the door is open. The more you allow situations to be in control of you, the less you are able to break out or see opportunities.

It is important to break this cycle of thinking and change your perception of what is around you. What you perceive is just a tiny piece of the actual reality. There are unlimited possibilities; you just need to break down the mental barrier that stops you seeing them. 

“Sometimes we stare so long at a door that is closing,

that we see too late the one that is open.”

Alexander Graham Bell, Inventor of the telephone

It is important to be grateful about where you are now, in order to be grateful about where you are going.

Even if you don’t enjoy your job, you can be grateful for the income it brings you, the experiences you can have, the friends you make and for the opportunities that are coming.

You might be thinking that “no one thanks me, no one appreciates me”. But just remember that if you give out positive energy and appreciation of others, you will find it coming back to you. Start appreciating what other people do for you at work. Focus on the positives, rather than the negatives. Try thanking other people, and they will begin to appreciate you in return. 

Take several minutes each day to find things for which to say thank you. It doesn’t matter who you say thank you to – God, the Universe, or other people. You can say them in your head, or out loud, or write them in a journal – whichever feels best for you. Try saying “Thank you” on your daily commute as this will give you a regular time every working day when you can reset your mind to the positive.  

This daily practice of gratitude puts the mind into a positive state for the day and will stop that feeling of dread as you travel to work. It may also stop you from being grumpy when you get home. Start with one or two things – your health, your family – and you will soon get the hang of it and find other things to be grateful for. Also, be thankful for the opportunities that are on their way to you, the people you will meet who will help you and the ideas that come to you about your future.

Being thankful is empowering at work for you and for others. Saying thank you to people for doing their jobs well is important. No matter what the job is, people need appreciation. It shows respect for that person and makes them feel more valued. You are likely to be treated better in return. Saying thank you is also a way to help difficult situations. For example, someone has made some critical comment about your work. Take a deep breath and then say “Thank you for your feedback – I appreciate the time you have put into it”. This can alter the dynamics of the situation in such a way that the criticism loses its sting and you can have an honest conversation about the subject.

Being grateful in advance also turbo charges your achievements, and boosts your confidence. If you can be thankful for achieving something, even before you have achieved it, then you are more likely to believe that you can reach that goal.

So think about the type of job you really want, be grateful that the job is coming to you, and then take action to achieve it. Focus on what you do want, not what you don’t want. Start saying thank you for the opportunity that is coming. 

“What you think about, and thank about, you bring about.”

Dr John de Martini

“How to Enjoy Your Job” is now available in India – You can buy it here for 231 rupees plus postage. 

Pothi.com is an Indian publisher who will print your book and ship it directly to you. 

I have also written an open letter to Indian friends here – with photos of my own trip to India. 

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A word of praise, a personalised email of encouragement or thanks can make all the difference to how you feel about a situation.

These mementos last longer than the pay cheque and show that someone has valued what you have done. There are some managers and even companies that people love to work for because they are known for having a special way of treating people. These managers and companies recognise that people really are their means of doing exceptional business, and treat them accordingly. However, too often it seems people are treated as resources rather than individuals who are valued for their own sake. 

So why is this important? Isn’t it enough that we get paid for our work?

For many people in the modern Western world, the pay is well above the poverty level. It can be assumed that everyone can feed, house and clothe themselves so work is generally not just about survival anymore. Once the basic needs are fulfilled, then work must be about something more than that.

 It should give people the opportunity to develop and grow, and appeal to something other than just financial gain. There must be personal growth, something that can be achieved, a goal to reach towards, respect from others and rewards appropriate to the situation. Your self-esteem is also affected by what peers and managers think of you, as well as how much you perceive you are valued.

What kind of work will make you feel valued?

People have feelings, aspirations and something to add to companies if given a chance to express themselves. The following areas contribute, in part, to making work more positive and demonstrating that people are valued.

•          Self management and autonomy. Being trusted to do the job without micro-management.

•          Helping others. Doing things for other people can help escape negativity, especially if the job seems pointless or repetitive. In being needed by others, individuals can feel useful and valued.
   
•          Being able to make decisions and not have those decisions overturned.

•          Taking control and responsibility over specific areas of work.
   
•          Ability to achieve goals and succeed at tasks.
   
•          Being given the opportunity and encouragement to take the initiative and act creatively without fear of blame.
   
•          Being rewarded appropriately and in proportion to the job done.
   
•          Confidence in being able to plan your personal life around work. Stability in working hours.
   
•          Being treated well and respected as a person and not as just a company resource. Acknowledgement of your other important roles such as partner or parent.

Which of these would make you feel valued at work? Are there ways you could improve any of these areas for yourself? 

·         Sleep more. Your mind is powerful and can work on problems when you are asleep. As well as feeling refreshed when you wake up, you may also have the answers to some of your problems.

·         Turn off the TV and stop the constant noise and stimulation. Be silent or read a book.

·         Listen to some relaxation or meditation CDs. These are often available in your local library if you don’t want to buy any.  

·         Learn a relaxation technique like progressive muscle relaxation or visualisation. Again, there are books and CDs available on these topics.

·         Have a regular massage. Ask the therapist where you hold your stress in your body. This can help you identify which physical areas to focus on relaxing.

·         Take a yoga class. Breathe and stretch more.

·         Get a hammock and spend some quality time in it. There is something inherently relaxing about being in a hammock. You can get a stand instead of using hooks so you can put it anywhere.

·         See a professional hypnotist for relaxation and de-stressing.

·         Cry. Big sobbing bursts of crying can release tension and you will feel better when you are all cried out. This will only be useful if you find it socially acceptable but it does work!

·         Laugh a lot. Get some funny movies. Play with your children. Go to a fun park and go on the rides. Be silly. Check out a laughter club at www.laughteryoga.org

·         Get out into nature and walk. Go and look at something that is not the city.