Have you ever read the book "Secrets of the Millionaire Mind"? If you haven't, you should! People can learn a lot about the mind sets of rich people. But, today I'm not going to talk about the mind set. I am going to talk about something you can do instantly. An easy-peasy way to manage your money with 6 jars.
When you receive money, divide them into 6 categories:
- 10%Financial Freedom Account (FFA)
- 10%Long Term Savings for Spending (LTSS)
- 55%Necessities (NEC)
- 10%Education (EDU)
Simply put your money into these 6 different jars (or back account for a more secure place). If you can't find a jar, you could also use a mug or envelope. If you think it didn't state very clearly in the book about the purpose of each jar, I have been to the Millionaire Mind Intensive, and the trainer spent a lot of time explaining this. I'm here to help you define each one of the account. Please be aware everybody has different understandings. And, this is merely my own point of view. If it's okay for you, then keep reading.
10% Financial Freedom Account (FFA): There was once a Countryman who possessed a Goose that laid a beautiful, glittering, golden egg everyday. The Countryman took the eggs to market and soon began to get rich. But he grew impatient with the Goose because she gave him only one golden egg a day. He was not getting rich fast enough. Then one day, the idea came to him that he could get all the golden eggs at once by cutting the Goose open. But when the deed was done, not a single golden egg did he find, and his precious Goose was dead.
The FFA account is the Goose, it's purpose is to lay golden egg for you. Put 10% of your income into the FFA account, and let the money work for you. You can spend the golden egg, which is the passive income. But, you DO NOT want to kill your Goose! So, the money you put in the FFA account is NEVER to be spent, EVER! You can put your FFA money in a bank account or anywhere that can generate money. Just remember to put an FFA jar at home as well, throw in some changes everyday to visualize and attract more passive income.
Want to know how to use the other 5 accounts? Stay tune next Thursday for more information. And, I can guarantee that you will love the PLAY jar! For now, let's focus on setting up the FFA, get the Goose ready, learn some investing method, and start collecting those golden eggs!