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The power of compound interest is incredible. If you save $10,000 a year starting at 25, you’ll have over $1.6 million in the bank by the time you’re 65. When you work for money and not the other way around, you’re more likely to experience more financial freedom because you’re more likely to make the decisions that are best for your business, even if they don’t seem to be the best in the moment. There’s an old saying in business—cash is king. That’s because it’s your most important asset. When you’re starting out, you don’t have much of an audience or many followers so you need to be careful with how you spend your money.
Most of you are probably familiar with the 80/20 rule. It states that 80% of your results will come from 20% of your efforts. This is why it’s so important to understand where you’re putting your time and energy and where you’re not. If money is not working for you, you will never get wealthy. If you are not growing your money, it’s shrinking. If you’re not investing your money, it’s declining in value. If you’re not adding to your wealth, you are subtracting from it. It's all about saving. Saving money in your business is the most important thing. If you're not saving money in your business, then you're losing money and that means you're losing ground to your competitors.
To be rich is to have a high net worth. This means that you have earned more money than you spend, and your assets (savings, investments, property, etc) are worth more than your liabilities (debts). You don’t need to make a lot of money to start a business. It’s possible to get started with as little as $100, but the thing is, you need to actually do something with it. One thing that I’m very strict about is saving. I don’t spend money on things that don’t bring me value.
The way to being rich is to live below your means and invest the difference. If you want to be rich in your 20s, then figure out how to live on less than you make and invest the rest. The most important thing is to do what you love. If you can do that, then money will follow. If you do what you love, the money will come either from doing that work or from other people seeing the value in what you’re doing and coming to you for your services. Always save money when you can, even if it’s just a little bit. If you’re living paycheck to paycheck, always remember to save some money before you get paid.