Hi everyone, Dan Thompson here, if you remember, we're talking about the five elements to wealth. Now remember the formula created by Einstein. He called it the eighth wonder of the world. It's compound interest, y=a(1+r)x. If you recall, why is our outcome? This is the answer, right? This is our goal. This is our wealth. Now the first element that we have to understand is "a" and "a" equals cash. Okay, we might call it cash, we might call it capital, we might call it funds or money or greenbacks or bones, or whatever else you want to call it. What it boils down to goes way back to the famous book that you should have all read. If you haven't, you need to read it. It's called The Richest Man in Babylon.


It's a great book, easy read, very easy to comprehend too. In this book The very first principle to becoming rich. I kind of like to say wealthy, because for some right now the word rich has taken kind of a negative meaning so we'll probably say wealthy. But he always said the richest man anyway, stay away from politics right now. The first principle is drumroll, pay yourself first. That's it. One of the most basic principles in life is to put yourself in the front of the line. Look, you're the one putting in 40-50 hours a week working, you're the person who should get the first part of your paycheck. Way, way too many families live paycheck to paycheck, and they never have a dime left over at the end of the month to save or pay themselves.


They pay their loans or credit cards, utilities. Everything else gets paid, but they don't pay themselves. So starting today, this minute, I don't care what your financial situation is, you need to start paying yourself first, how much? Well, depends on your situation, I would shoot for at least 10%. At kind of a minimum, maybe you can't do 10 right now. But get something so that you feel like you're accomplishing that goal of paying yourself. Eventually you want to get that up to about 20%. But here's a deal. Once you see how all this fits in, you're gonna want to try to figure out how you can pay yourself 100% and put it through the five elements to wealth before you start taking income. But anyway, you'll see how exciting this is as we go along.


Although it's not gonna be possible. Maybe right now, the main thing is start with something today. You got to figure out how to get that started and then we'll figure out how you can do more. Now in his book, "Rich Dad Poor Dad" Robert Kiyosaki taught the Same principle, he said that his rich dad taught him to pay himself first. So in his book, he says pay yourself first. It's the power of self discipline. If you cannot get control of yourself, don't try to get rich. Wow! If you can't control yourself, don't try to get rich. It makes no sense to invest, make money, and then just blow it. It's the lack of self discipline that causes most lottery winners to grow broke. Soon after winning millions of dollars.


It's the lack of self discipline that causes people who get a raise, to immediately go out and buy a new car, take a cruise. He says, of all the steps this step is probably the most difficult to master if it's not already part of your makeup. Now, I'd venture to say that personal self discipline is the number one delineating factor between the rich, the poor and the middle class. So that's pretty powerful. If that's the factor between the rich and the poor. Then let's get some discipline and put ourselves out in front of the line each and every payday. All right? And the power of cash and having it that cash flows amazing. So you work you get paid. If you pay yourself and save and invest first, then pay your bills. You're gonna be amazed at what can happen.


And don't worry what to do with it just right now, right? We're simply wanting to take that action and start saving, paying herself first each and every payday as we go along. It's gonna make perfect sense where to save and invest it. But it all starts with us. Without this part of the equation, the cash equation, really nothing else matters. If you're not able or willing to pay yourself first and look out for you and your family. Put yourself at the front of the line, you're always gonna struggle to build your wealth. I don't care if you have debt up to your eyeballs. And Dave Ramsey tells you that suck it up and eat rice and beans three times a day, it's wrong. You have got to put yourself, you've got to put something in your pocket, you've got to get the compounding machine working for you.


Okay, so that is element number one, cash, money, capital, whatever you want to call it. The only way this works is this if you have some cash to do something with and paying your self first is how we're gonna build that cash. If you are fortunate enough to already have cash to already have other investments that you can access? Well, you're just gonna be that much further ahead. As we go through this whole process. You're gonna be able to jump ahead a few time periods as we call them in our five elements, but I'm jumping ahead of myself. I really do get kind of excited about this I can't wait to share it all with you but we've got to go one step at a time. So that this becomes a way for you to understand and then ultimately become the captain of your own financial ship. So that's it for this video. That is element number one. Stay tuned for element number two. If you have any questions, shoot them to questions at wise money tools.com. Don't forget to subscribe. Can't wait to see again. Until next time, take care.