Control Personal Finances

Pay Yourself First – The Key Step To Accumulate Wealth

by Vlastimil Cícha - Pat V.C.

August 20, 2020

Listen, Pay Yourself First is your gateway to wealth.

Don’t you believe?

Let’s find out…

But first let me ask you a couple of question.

  • Do you have full control of your personal finances?
  • How much do you keep on your emergency account? 
  • Have you invested regularly to grow your wealth? 
  • Are you capable of covering unexpected medical expenses? 

If you don’t, you’re in trouble because you have no financial literacy.

And if you procrastinate to learn it on your own, it might ruin your life. 

Introduction To PYF

Hi Doers,

my name is Pat VC and today, we’re going to discuss the key step in accumulating wealth. 

For those who see my video for the first time, I’m sharing knowledge about topics related to 7 Wealth Stages

These stages have gone through my life and are about Wealth Mindset, Elite-SEO Skills, Personal Finances, Grow Wealth, Powerful Book-Ideas, Leverage Other Skills, and Abundant Life. 

7 Wealth Stages

So to set you now in the right way, today’s topic belongs to the fourth stage or pillar called Control Personal Finances.

Do you remember my questions at the beginning? 

What were your answers? 

Let me guess, most of them were No, weren’t they? 

And that’s unfortunate because again it might ruin your life.

Yes, it’s a harsh truth.

Well, you may say that you will contribute to your emergency fund and invest in the next paydays or next month. But somehow another month passes and you still haven’t done it.

Why? Don’t worry, this video is going to help you. 

So what’s the solution?

The answer is PYF

What Does Pay Yourself First Mean?

Pay Yourself First” is an investor perception.

It means taking a specific percentage immediately from your payday, paycheck, or other income streams that you receive. Even from every dollar that comes into your pocket or account.

Usually, this percentage should be depositing automatically or manually (if you want to manage it). 

That means you Pay Yourself First. 

But you may ask what about savings?

Isn’t the saying that cash is king right?

This is a poor money myth as saving money is not paying yourself first.

Because when you only save money for years, you will never get financially successful.

Here is another fact. 

“Wealthy people don’t save money. Preferably, they strictly follow the Pay Yourself First strategy, which is much more powerful than saving.”

Are you with me? 

Don’t worry, I’m going to explain more.

Why Should You Pay Yourself First?

Simply said, you pay yourself first before any monthly liabilities or expenses you have.

So let’s dig deeper and dissect a simple scenario with income that you receive. 

And it doesn’t matter whether it is a monthly paycheck of $3,000, $10,000, or you get paid five times per month.

Because the PYF wealth-building strategy should always be the same. 

Imagine, your income is x amount of money which equals 100%.

Your income is x amount of money

Again, your income is x amount of money which equals 100%.

Let’s not forget…

“In order to build wealth, PYF, or Paying Yourself First must be the number one priority.”

So instead of saving your money, put aside first at least a 3 to a 6-month emergency fund to sleep well at night.

This way, you can use this cash in an emergency.

After that, you are ready to create a better version of yourself, scrutinize 7 critical steps before you invest and ultimately build your wealth

It is the rule that I follow anytime when every dollar comes to my account. And this rule is projected across my board on the wall.  

How To Be Organized & Accumulate Wealth

I use several golden buckets where I accumulate money first and then use it wisely.

But only when I know that I have at least a 6-month emergency fund. Without that, I don’t move further.

Let’s assume you also have like me your emergency fund.

So feel free to use the same strategy.  

What will your buckets look like?

Pay Yourself First Golden Bucket 1 

30-49% goes to real estate investments such as down payment for your first or further rental property.

Pay Yourself First Golden Bucket 1

PYF Golden Bucket 2 

11-17% goes to investing in public equities. It could be individual stocks that you understand or ETFs. In addition to investing in start-up private equities.  

Pay Yourself First Golden Bucket 2

PYF Golden Bucket 3 

10% goes on investments that increase your personal brand awareness.

Pay Yourself First Golden Bucket 3

PYF Golden Bucket 4 

10% goes to investing in yourself, such as courses, developing your additional elite skills, personal strengths, personal coaching, or mentoring.

Pay Yourself First Golden Bucket 4

Pay Yourself Last

Now, there are two more buckets called PYL that means “Pay Yourself Last”.

PYL Bucket 5 

25% goes to expenses and bills such as rent or mortgage on the primary residence. 

Pay Yourself Last Bucket 5

PYL Bucket 6 

14% are essentials such as less debt and liabilities.

Pay Yourself Last Bucket 6

And if your debt is larger, immediately stop accruing bad debt especially with your credit cards.

So the wealth-being strategy is to keep expenses as low as possible and build up assets first. Then buy whatever you wish for.

You see, it’s about discipline and I adhere to it.

Undoubtedly, mine and your percentage distribution may fluctuate every month or year.

It depends on your monthly circumstances and needs. But when I create a financial plan, I stick firmly to these buckets.

Nevertheless, I know that these buckets will change overtime as I will need to reallocate my personal finances.

Does it make sense? 

Put a comment below and share with me your current buckets. 

And if you should memorize just one thing in this video, remember this:

“Your goal is to make sure that you first save at least 3 to 6-month of your monthly income to create a cushion for financial emergencies.”

Then continually invest the specific percentage amount of money in yourself, in money skills, your brand, and in various investment assets to grow your wealth.

I cannot emphasize it more because it’s all about reprogramming your mindset. 

And I want you to think about this: 

“Poor people pay themselves LAST but wealthy people pay themselves FIRST.”

So when you start prioritizing PYF habits, you are basically saying yourself that your future is the most important thing to you. 

All that it takes is to be persistent and consistent.

You must commit and establish strong discipline

It’s your accountability take control of your life.

Because then you become a Doer

Time To Take a Lot Of Action

Now, let me ask you a few questions:

  • Have your parents given you this piece of advice?
  • Are you going to build your emergency fund? 
  • Will you reorganize your PYF habit with golden buckets?

Leave a comment below to share your thoughts. 

I look forward to seeing you in my next video or here. 

Vlastimil Cícha - Pat V.C. has been intensely mentored in digital investing within the larger financial service organization and investment bank while leading Elite-SEO strategies.
Besides that, he’s been obsessed with creating wealth-building and well-being strategies. And he found out that in our life there are only seven stages. He calls them the 7 Wealth Stages framework.
That’s the reason why he talks and writes about topics related to the 7 Wealth Stages that guide you toward Prosperity and Holistic Wealth. It is personal & professional development about a mindset, elite-income skills potential, personal finance, investment, personal growth, scalability, and abundant life. Vlastimil advocates the statement that elite-income skills are the entryway into financial abundance through well-organized wealth-building strategies.

Pat VC

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