According to Brian Tracy, one of your major goals in life should be financial independence. You must aim to reach the point where you have enough money so that you never have to worry about money again. The good news is that financial independence is easier to achieve today than it has ever been before. This segment is broken down into 13 categories covering a wide range of areas including saving and investment. Let’s jump right into this part of the 100 Unbreakable Laws of Business Success by Brian Tracy.
46. The law of abundance
We live in an abundant universe in which there is sufficient money for all who really want it and are willing to obey the laws governing its acquisition. Plenty of money is available to you. There is no real shortage. You can have virtually all you really want and need. We live in a generous universe, and we are surrounded by blessings and opportunities to acquire all we truly desire. Your attitude toward either abundance or scarcity of money will have a major impact on whether or not you become rich.
47. The law of exchange
Money is the medium through which people exchange their labor in the production of goods and services for the goods and services of others. Money is a measure of the value that people place on goods and services. The amount of money you earn is the measure of the value that others place on your contribution.
48. The law of capital
Your most valuable asset, in terms of cash flow, is your physical and mental capital, your earning ability. You may not even be aware that unless you are wealthy already, your ability to work is the most valuable asset that you have. By utilizing your earning ability to its fullest, you can bring thousands of dollars each year into your life. By applying your earning ability to the production of valuable goods and services, you can generate sufficient money to pay for all the things that you want in life. The amount of money that you are paid today is a direct measure of the extent to which you have developed your earning ability so far. Your most precious resource is your time.
49. The law of time perspective
The most successful people in any society are those who take the longest time period into consideration when making their day-to-day decisions. This insight comes from the pioneering work on upward financial mobility in America conducted by Dr. Edward Banfield of Harvard University in the late 1950s and early 1960s. After studying many of the factors that were thought to contribute to individual financial success over the course of a person’s lifetime, he concluded that there was one primary factor that took precedence over all the others. He called it “time perspective.” What Banfield found was that the higher a person rises in any society, the longer the time perspective or time horizon of that person. People at the highest social and economic levels make decisions and sacrifices that may not pay off for many years, sometimes not even in their own lifetimes. They “plant trees under which they will never sit.”
50. The law of saving
Financial freedom comes to people who save 10 percent or more of their income throughout their lifetime. One of the smartest things that you can ever do for yourself is to develop the habit of saving part of your salary, every single paycheck. Individuals, families, and even societies are stable and prosperous to the degree to which they have high savings rates. Savings today are what guarantee the security and the possibilities of tomorrow. Pay yourself first. Begin today to save 10 percent of your income, off the top, and never touch it. This is your fund for long-term financial accumulation and you should never use it for any reason except to assure your financial future.
51. The law of conservation
It’s not how much you make but how much you keep that determines your financial future. Many people make a lot of money in the course of their working lifetimes. Sometimes, during boom periods, people greatly exceed their expectations and make more money than they ever thought possible. Unfortunately, they assume that because they are making a lot of money, they have the ability to go on making a lot more indefinitely. They then spend everything they earn, confident that they will always be able to earn more. The true measure of how well you are really doing is how much you keep out of the amount that you earn.
52. Parkinson’s Law
Expenses always rise to meet income. This law says that no matter how much money people earn, they tend to spend the entire amount and a little bit more besides. Their expenses rise in lockstep with their incomes. Financial independence comes from violating Parkinson’s Law. If you allow your expenses to increase at a slower rate than your income and you save or invest the difference, you will become financially independent in your working lifetime.
53. The law of three
There are three legs to the stool of financial freedom: savings, insurance, and investment. To be fully protected against the unexpected, you require liquid savings equal to two to six months of normal expenses. You must insure adequately to provide against any emergency that you cannot pay for out of your bank account. Your ultimate financial goal should be to accumulate capital until your investments are paying you more than you can earn on your job.
54. The law of investing
Investigate before you invest. The only thing easy about money is losing it. If you think you can afford to lose a little, you’re going to end up losing a lot. Invest only with experts who have a proven track record of success with their own money.
55. The law of compound interest
Investing your money carefully and allowing it to grow at compound interest will eventually make you rich. Compound interest is considered one of the great miracles of all of human history and economics. The key to compound interest is to put the money away and never touch it.
56. The law of accumulation
Every great financial achievement is an accumulation of hundreds of small efforts and sacrifices that no one ever sees or appreciates. The achievement of financial independence will require a tremendous number of small efforts on your part. To begin the process of accumulation, you must be disciplined and persistent. You must keep at it for a long, long time. Initially, you will see very little change or difference, but gradually, your efforts will begin to bear fruit.
57. The law of magnetism
The more money you save and accumulate, the more money you attract into your life. A prosperity consciousness attracts money like iron filings to a magnet. It takes money to make money.
58. The law of accelerating acceleration
The faster you move toward financial freedom, the faster it moves toward you. It often takes a long, long time for you to bring about a noticeable change in your financial condition. Old habits die hard. Changing your financial life is very much like changing the direction of a great ocean liner. You can do it only one degree at a time. However, once the changes are put into place, they begin to speed up and gather momentum as they move you toward your goals.
That covers the laws of money.
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