The Law of Surplus
Save 20% of every paycheck before you touch a single dollar.
Here's the brutal math: if you earn $60,000/year and save nothing, you'll work until you die. If you save 20% ($12,000/year), you'll have $1.2 million in 30 years at 8% returns. That's the difference between freedom and a lifetime sentence. The 20% isn't arbitrary - it's the minimum threshold where compound interest starts working magic.
Deep Dive
In 1926, George Clason wrote 'The Richest Man in Babylon.' The first lesson: 'A part of all you earn is yours to keep.' Not your landlord's. Not Amazon's. Not the restaurant's. Yours. Most people have it backwards - they pay everyone else first (rent, bills, subscriptions, wants) and 'save what's left.' There's never anything left. This is by design. Marketers spend billions engineering products to extract every dollar from your wallet. The only defense is automation: the money leaves your account on payday, before you see it, before you can rationalize spending it. Start at 10% if 20% feels impossible. Increase by 1% every 3 months. You won't notice the difference, but in 10 years, you'll have built a fortune while your peers are still living paycheck to paycheck.
Do This Today
Today: Open a high-yield savings account at Ally, Marcus, or Wealthfront (takes 10 minutes). Set up automatic transfer of 20% of your paycheck to hit on payday. Forget it exists.
Avoid This
The 'I'll save more when I earn more' trap. Studies show lifestyle inflation is nearly 1:1 with income increases. A $100K earner who couldn't save at $50K still can't save at $100K. The habit must come first.
"Do not save what is left after spending, but spend what is left after saving."
Remember
- The Rule: Save 20% of every paycheck before you touch a single dollar.
- The Action: Today: Open a high-yield savings account at Ally, Marcus, or Wealthfront (takes 10 minutes). Set up automatic transfer of 20% of your paycheck to hit on payday. Forget it exists.