One of the biggest mysteries for the majority of Americans is the habit of saving. This is strictly a behavioral issue not an earnings issue. I hear so many people say “when I make more money, then I will start saving for retirement”. No you won’t. It has nothing to do with earning more money, but rather the habit of saving money by paying yourself first. Most people’s income is like a cork in a bath tub. If you add more water, the cork floats higher. They earn more money, they find new things to spend it on. So how do we save money and retire comfortably? It is really not that hard.

I wrote a book a few years ago called The Minimum Wage Millionaire which is a free eBook download. It is a quick read at only 50 pages. The habit of saving is just a philosophy of paying yourself first. By writing yourself a check for the first 5% of every time you earn a paycheck, you start the habit of saving. When your earnings increase, your saving will increase. It is this exercise of habit where you learn to save money and retire comfortably. Most people do not win the lottery. It is this habit that predicts success.

Napoleon Hill tells stories of men in his books “Success in 16 Lessons” where he personally knew men who made fortunes and men who lost fortunes. He found the common thread to be the habit of saving or the habit of spending. Those who saved 10-30% of what they earned not only built savings but were rewarded with opportunities time after time. Their earnings literally had nothing to do with it. It was living on less than they earned, they saved systematically the same percentage on every paycheck and avoided going into debt. Those with the habit of spending saved nothing, crying if they only earned more they could save, which they did earn more and saved nothing, remember it is a habit. They spent more than they earned mainly on “entertainment” and borrowed to keep their life style afloat. Hill wrote “the man who is bound in the slavery of debt is just as helpless as the slave who is bound by ignorance or by actual chains”. Remember we are what we think about most often and if one is being crushed by debt, it would be hard to think of prosperity. The only true way to be free is to be debt free.

Once you learn the habit of saving, you need to systematically invest in your future. Albert Einstein called compounding interest the most powerful force in our universe. His theory of the Rule of 72 does a great job of explaining the power of time and compounding interest. However, none of this is possible without the habit of saving. Start paying yourself first today and begin to save money and retire comfortably.

“We are what we repeatedly do; excellence then is not an act, but a habit”.—Aristole

Image by Stuart Miles at www.freedigitalphotos.net

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Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, grandfather of 1, entrepreneur, insurance agent, life insurance broker, salesman, sales trainer, recruiter, public speaker, blogger, author and team leader with over 28 years of experience in sales and marketing in the insurance and beverage industries.