This is one of the most fundamental concepts for creating wealth. The ignoring of this simple principle is what creates the massive amount of struggle so prevalent within our society. In this era, people have the tendency to do the exact opposite of what is necessary for financial growth.

The majority of our society works for a paycheck. They put in their hours to receive their pay every couple of weeks. Before they get their check, the taxes and other governmental obligations are removed. This leaves them with their net pay for the period. Of course, this the amount that people then need to live on.

Naturally, everyone has basic obligations. Expenses such as rent or mortgage, transportation, food, utilities, etc... are paid out of our earnings. These are the things that eat up a large percentage of the money we bring home. Occasionally, depending on the financial situation, there might be some form of entertainment expense. In most cases, these obligations are met before any money is set aside for savings or investment.

To build a large amount of wealth, one needs to put one's money to work for them. The power of compound interest enables money to grow at a substantially faster rate than any single individual can earn. Fortunes have been created by consistently investing at a good rate of return over a long period of time. The more money that is “put to work” or the longer the period, the greater the chance of attaining financial prominence.

Unfortunately, when most are questioned about their pattern of saving, the typical response is that “I don't make enough to save” or “I will save if I have anything left over after I pay my bills”. As most are aware, there never is anything left over at the end of the month. This is the destructive force of paying everyone else first. The person actually earning the money is left out of the pay cycle. That person is not working for a particular company. Rather, they are working for their creditors. The reason they show up for work each day is to be able to pay their bills.

The concept of paying yourself first is a radical idea to most people, It is something that is not promoted too much within our culture. We are conditioned for the instant gratification that comes with spending. Credit is rather easy to get thus allowing us to actually spend more than we earn. The “buy now, pay later” is so the preferred way of purchasing. What an item truly costs when interest is added in is never factored in the decision. The main concern is how much the monthly payment is.

This mentality has put the large percentage of families into a financial bind. Because of this, the thought of setting money aside each month seems impossible. If one cannot pay all their obligations using 100% of their income, how could they do it with a smaller percentage? The answer is in the elimination of senseless spending. Paying yourself first obligates a portion of one's income to saving, income that normally would have been spend on something that is more for gratification as opposed to a necessity.

When people undertake this concept initially, they find that putting 3%-5% away is not difficult. It is best done to have it taken directly from the paycheck before it is received. People do not feel the tax crunch as much since they never see the money. The same holds true for investing. Money removed immediately from a paycheck and deposited into an investment account will not even be missed. Over time this fund will grow even if the monthly expenses remain the same. The power of compounding interest begins to take hold.

It is best to start this process as soon as possible. The longer one waits, the less they will ultimately be able to accumulate. There is a tremendous difference in the amount of money one has when invested over 20 years versus 30 years. Begin by having a portion of your paycheck diverted into an interest bearing account automatically. This will help get you into the habit of paying yourself first. Even 1% or 2 % will be enough to begin the process. Many of the world's fortunes started with minimal amounts.