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Welcome To The Course, Mastering Money The S.M.A.R.T Way Without Working Any Harder! 

Lesson #4

HOW TO ACCUMULATE WEALTH OVER TIME

In this module, we are going to cover saving, investing, and accumulating wealth.

If you cannot save money, the seeds of greatness are not in you.

1. Clement Stone

Get into the habit of saving until you get more satisfaction from rationally putting money aside than you do from irrationally spending it.

The events of the last year has exposed the fact that millions of people have no savings. After years of working in first-world prosperous countries they are broke, and dependent on benefits and foodbanks. 

We all need savings to fall back on and to enable us to stop working or at least stop exchanging our time for money. If you have no form of passive income, you can never stop working.

In simple terms, savings can be categorised into three general areas:

1. Short term 
2. Medium Term
3. Long term 

Short term savings can be for a contingency fund for emergencies, holidays or to buy something you need.

Medium term savings can be for larger items, like a deposit for a house, an investment into a business or a car.

Longer term saving is generally for retirement but can also include children’s college education. 

Pay yourself first

A basic principle is to pay yourself first before you pay everyone else.

Think of saving as paying yourself rather than depriving yourself of candy when your pocket money was taken away from you by your parents.

Savers automatically transfer a percentage of their income into some form of savings vehicle as soon as they receive it and live on the rest.

Spenders spend and live on their salary and save whatever is left over, if any. 

Who do you think saves the most money? 

Money Master savers also maximise their tax-free allowances into things like tax-efficient pensions and schemes to make sure their money is working hard for them and they are paying less tax.

The poor work hard for their money, the rich make their money work hard for them.

Robert Kiyosaki 

An easy way to save is to use the ‘jam jar’ method that your grandparents used when money was tight, everything was paid in cash and people didn’t use banks as they do today.

When the weekly wage came into the household it was divided up, usually by the women, and put into various empty jam jars to cover the rent, fuel, food and replacement items like children’s shoes. People also saved for birthdays and Christmas.

You can use this method by dividing your monthly salary into virtual ‘jam jar’ separate bank accounts rather than one account.

You can name the accounts whatever you like, but I would suggest something along the following lines:

• Emergency or contingency fund
• Medium term savings
• Long term savings 
• Play account – fun things for yourself including trips, meals out and clothes
• Giving account – for charity donations. 

You could also add a training and development account to be invested in yourself in the form of books and courses.

The percentages will vary according to your means.

But the important point here is to get started, even if y