What to do with a dollar? Try the Seventy, Ten, by Ten, by Ten Percent Solution!

BY JERROLD JOHNSON

Many years ago, when I started my financial planning career, it was the beginning of a quest to discover how to secure my financial future and that of my family for generations to come.  As the journey began, I quickly discovered that it would not be about securing me and mine; but, rather about empowering as many others people’s lives as possible.

I started learning and teaching others about: budgets, spending plans, investment and retirement planning.  All of this was great and important; however, one day I met a billionaire who taught me that, “Simplicity is the key! Here’s a million dollar idea you can apply in life and business…find a few simple steps that can be duplicated, over a consistent period of time, by a large group of people.”

Now, I can share with you something that is very simple. You will be able to learn it quickly and even teach to your children. And, it will have a massive impact on your financial life, if you stick to the basic principle.

The simple concept is: If you know what to do with $1.00, you’ll know what to do with $10.00. And, if you know what to do when $100.00, you will know what to do when $1 Million, or $10 Million, or even when $100 Million finds its way into your hands.

However, before we break down the concept, we must ensure that we have the right thinking or philosophy about money.  The purpose of money is to serve you and what you wish to do with it.  You should not simply live or work for money. Your money should be working for you!  Contrary to popular belief, “money is NOT the root of all evil!”

The ancient text, often misquoted and misused, actually says: “For the LOVE of money that is the root of all kinds of evil…” (1 Timothy 6:10).  Therefore, many people have recorded it in their subconscious that money is bad. This affects how they view money and how they treat it. If you correct that negative concept, you will be well on your way to mastering money management, instead of it mastering you.

I first learned this simple percentage concept from renowned author, Jim Rohn.  “What to do with a dollar?” Some persons may not remember what a cent is, because some vendors refuse to accept them. But, remember that it takes 100 cents to make up one dollar. For simplicity, let’s use percentages.

Here is what you need to remember about the 70-10-10-10 Percent Solution:

1. Never spend more than 70% of your income.  That includes your salary, commission, gifts, interest, dividends, and capital gains, etc.
2. Give 10% to charity. Some call it tithe, and others just give generously.
3. Invest 10% for capital to generate a profit. Consider this to be active capital.  And, capital is any funds you set aside to be invested in an enterprise that brings value to the market place hoping to bring a profit.
4. Invest 10% for someone else to use; that is, in a financial institution, where it will gain interest; and you can consider that to be passive capital.

Consider adopting the 70-10-10-10 Percent Solution, and you will be well on your way to mastering the management of your financial resources and your life!