• Myles Biggs

Episode 91: Pay Yourself First

Adopt this mindset and achieve more than you ever thought possible.

In money management, you hear this phrase used a lot: pay yourself first. But what does that mean? Listen to Episode 91 and find out.

Well, imagine that you received $2,400 dollars a day for free to invest - how would you diversify your funds? How would you pay yourself?

There are numerous investment strategies out there to consider. Depending on your tolerance for risk, your emotional attachment to money or your age, you might choose to be overtly aggressive or sheepishly conservative. Or maybe somewhere on the middle.

Do you invest in bonds with guaranteed returns? Do you employ a buy and hold strategy - and ride the ups and downs of the market? Do you focus on buying dividend producing stocks so that your invested dollars pay you for your risk?

Since the money is simply given to you it could be easy to take it for granted. To assume that it will always keep coming. If you made a mistake and lost the money, there would always be a reset tomorrow with more funds.

With that in mind - that “I’ll always have a second chance” mindset - it could be easily to slip into a careless strategy. A focus on going hard and fast and employ an aggressive strategy that is high risk and may be hard to sustain.

The answer seems simple right? It’s best to diversity. Break that $2,400 into equal chunks:

  1. $800 invested into solid divided producing stocks

  2. $800 into aggressive purchases that could have a huge payoff if you make the right risks

  3. $800 into conservative, virtually guaranteed-safe securities

Now, remove the zeros and think about $24 instead of $2,400. Now replace the word dollars with hours.

Do you see where I'm going with this yet?

All of us get 24 hours a day.

They’re free.

They are given to us as an incredible gift. And every day that we wake up to receive this gift we have choices to make on how we invest those hours and whether or not we either diversify or choose risky, eggs-in-one-basket investments.

How are you investing your hours? Are you paying yourself first?

Chances are the answer is no.

Chances are you’re investing those hours into your employer or friends and family. And whatever I’d left over goes into your personal account.

I’m not advocating to slack on investing in your employer or family and friends. I’m suggesting we diversify our investments.

Let’s take the same scenario we posed with dollars:

  1. $800 invested into solid divided producing stocks

  2. $800 into aggressive purchases that could have a huge payoff if you make the right risks

  3. $800 into conservative, virtually guaranteed-safe securities

So let’s pay ourselves first! Those dividend producing hours are sleep, exercise, meditation, etc.

Those conservative, guaranteed securities are your family and friends. Spending time with and doing good deeds for these people in our lives always produce returns.

The aggressive allocation of hours is your work. It’s the hustle and grind and the corporate climb.

I know that in a perfect world it’s difficult to have these split into even thirds. But it’s not impossible. And you have to decide what your best split is.

Here’s how I invest daily:

  1. 7 hours sleep - dividends

  2. 1 hour exercise - dividends

  3. 0.5 hour meditation - dividends

  4. 8.5 hours work - aggressively pursuing career growth through bold moves and action

  5. 7 hours family/friends - texts, phone calls, family dinners, playing with my son, hanging out with my wife - all with a guaranteed return for my happiness

Again, I’m not perfect. Some days the deck is stacked more towards one or another area.

How do you pay yourself first? I'd love to hear from you! Email me at myles@rtjmedia.com.

Listen to Episode 91.


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