One of the most important principles Walter Yitzchak Reissman teaches his clients is that the first thing you must do after making money in your business, or if you are an employee, for your paycheck, is to pay yourself.
How to Pay Yourself
Let’s say you earn $10,000 a month, and as soon as the money comes in, you use it to pay your mortgage or rent and other bills. In the end, you can be left with nothing because you didn’t pay yourself first.
So, Walter Yitzchak Reissman says: ‘ first separate $1,500 and “pay it to yourself” so that you can invest properly. Thereafter, after removing that sum, Walter Yitzchak Reissman says you then construct your monthly budget.
Why Pay Yourself?
It’s important to remember why you are working in the first place. Successful people don’t work just to live day to day. Remember, you’re not working to pay your electricity bill. You are working to be successful down the road. Your goal is to be financially independent in the future.
If you start saving and investing when you are young, the compound interest of whatever you saved is very, very powerful.
Walter Yitzchak Reissman says, “If a client comes to me at 65, about to retire with no savings, it is very hard to help him. So when you are making and spending money, make sure you are paying yourself first. First, save, then spend! Think of it as a sort of reverse engineering.”
A Real-World Example
Walter Yitzchak Reissman once met with a high–earner client. He was a doctor earning $250,000 per year, and he was married to a lawyer earning about $400,000.
They were making high incomes, but there was a problem. They were nervous about the expense of paying for their children’s college degrees and weddings, as concerned about their retirement.. Why? Because they had no adequate plan for savings and investments.
Getting Your Money to Behave
Money is very similar to human relationships. You must set goals and hold boundaries, or things can easily go off track.
For example, if you have a friend that is always late for your lunch dates, you will tell them this doesn’t work for you and you can then explain your expectation that they will arrive on time.
No matter how much money you earn, it can only do what you tell it to do. It can only work within the boundaries that you set. Without a plan, your money will simply wander where it will, like the friend that shows up whenever they want because you didn’t clarify expectations.
The Role of a Financial Coach
Many people find they don’t know where to begin when it comes to financial planning. It can be overwhelming trying to determine your goals, how much to save, and how much you will need in the future.
Walter Yitzchak Reissman offers financial coaching based on 30 years of real-world experience. He believes that it’s important to get good guidance and coaching, pay yourself first, and have a solid financial plan based on your needs and goals.