ctually do what the masses do； which is pay themselves last。 They pay everyone else first。
There have been months in my life； when for whatever reason； cash flow was far less than my bills。 I still paid myself first。 My accountant and bookkeeper screamed in panic。 〃They're going to e after you。 The IRS is going to put you in jail。〃 〃You're going to ruin your credit rating。〃 〃They'll cut off the electricity。〃 I still paid myself first。
〃Why？〃 you ask。 Because that's what the story The Richest Man In Babylon was all about。 The power of self…discipline and the power of internal fortitude。 〃Guts；〃 in less elegant terms。 As my rich dad taught me the first month I worked for him； most people allow the world to push them around。 A bill collector calls and you 〃pay or else。〃 So you pay and not pay yourself。 A sales clerk says； 〃Oh； just put it on your charge card。〃 Your real estate agent tells you to 〃go ahead…the government allows you a tax deduction on your home。〃 That is what the book is really about。 Having the guts to go against the tide and get rich。 You may not be weak； but when it es to money； many people get wimpy。
I am not saying be irresponsible。 The reason I don't have high credit card debt； and doodad debt； is because I want to pay myself first。 The reason I minimize my ine is because I don't want to pay it to the government。 That is why； for those of you who have watched the video The Secrets of the Rich； my ine es from my asset column； through a Nevada corporation。 If I work for money； the government takes it。
Although I pay my bills last； I am financially astute enough to not get into a tough financial situation。 I don't like consumer debt。 I actually have liabilities that are higher than 99 percent of the population； but I don't pay for them； other people pay for my liabilities。 They're called tenants。 So rule No。 1 in paying yourself first is don't get into debt in the first place。 Although I pay my bills last； I set it up to have only small unimportant bills； that I will have to pay。
Secondly； when I occasionally e up short； I still pay myself first。 I let the creditors and even the government scream。 I like it when they get tough。 Why？ Because those guys do me a favor。 They inspire me to i go out and create more money。 So I pay myself first； invest the money； and let the creditors yell。 I generally pay them right away anyway。 My wife and I have excellent credit。 We just don't cave into the pressure and spend our savings or liquidate stocks to pay for consumer debt。 That is not too financially intelligent。
So the answer is：
1。 Don't get into large debt positions that you have to pay for。 Keep your expenses low。 Build up assets first。 Then； buy the big house or nice car。 Being stuck in the rat race is not intelligent。
2。 When you e up short； let the pressure build and don't dip into your savings or investments。 Use the pressure to inspire your financial genius to e up with new ways of making more money and then pay your bills。 You will have increased your ability to make more money as well as your financial intelligence。 ； ： So many times I have gotten into financial hot water； and used my brain to create more ine； while staunchly defending the assets in my asset column。 My bookkeeper has screamed and dived for cover； but I was like a good trooper defending the fort； Fort Assets。
Poor people have poor habits。 A mon bad habit is innocently called 〃Dipping into savings。〃 The rich know that savings are only used to create more money； not to pay bills。
I know that sounds tough； but as I said； if you're not tough inside； the world will always push you around anyway。
If you do not like financial pressure； then find a formula that works for you。 A good one is to cut expenses； put your money in the bank； pay more than your fair share of ine tax； buy safe mutual funds and take the vow of the average。 But this violates the 〃pay yourself first〃 rule。
The rule does not encourage self…sacrifice or financial abstinence。 It doesn't mean pay yourself first and starve。 Life was meant to be enjoyed。 If you call on your financial genius； you can have all the goodies of life； get rich and pay bills； without sacrificing the good life。 And that is financial intelligence。
6。 PAY YOUR BROKERS WELL： The power of good advice。 I often see people posting a sign in front of their house that says； 〃For Sale by Owner。〃 Or I see on TV today many people claiming to be 〃Discount Brokers。〃
My rich dad taught me to take the opposite tack。 He believed in paying professionals well； and I have adopted that policy also。 Today； I have expensive attorneys； accountants； real estate brokers and stockbrokers。 Why？ Because if； and I do mean if； the people are professionals； their services should make you money。 And the more money they make； the more money I make。
We live in the Information Age。 Information is priceless。 A good broker should provide you with information as well as take the time to educate you。 I have several brokers who are willing to do that for me。 Some taught me when I had little or no money； and I am still with them today。
What I pay a broker is tiny in parison with what kind of money I can make because of the information they provide。 I love it when my real estate broker or stockbroker makes a lot of money。 Because it usually means I made a lot of money。
A good broker saves me time in addition to making me money…as when I bought the piece of vacant land for 9；000 and sold it immediately for over 25；000； so I could buy my Porsche quicker。
A broker is your eyes and ears to the market。 They're there every day so I do not have to be。 I'd rather play golf。
Also； people who sell their house on their own must not value their time much。 Why would I want to save a few bucks when I could use that time to make more money or spend it with those I love？ What I find funny is that so many poor and middle class people insist on tipping restaurant help 15 to 20 percent even for bad service and plain about paying a broker 3 to 7 percent。 They enjoy tipping people in the
expense column and stiffing people in the asset column。 That is not financially intelligent。
All brokers are not created equal。 Unfortunately； most brokers are only salespeople。 I would say the real estate salespeople are the worst。
They sell； but they themselves own little or no real estate。 There is a tremendous difference between a broker who sells houses and a broker who sells investments。 And that is true for stock； bond； mutual fund and insurance brokers who call themselves financial planners。 As in the fairy tale； you kiss a lot of frogs to find one prince。 Just remember the old saying； 〃Never ask an encyclopedia salesperson if you need an encyclopedia。〃
When I interview any paid professional； I first find out how much property or stocks they personally own and what percentage they pay in taxes。 And that applies to my tax attorney as well as my accountant。 I have an accountant who minds her own business。 Her profession is accounting； but her business is real estate。 I used to have an accountant that was a small business accountant； but he had no real estate。 I switched because we did not love the same business。
Find a broker who has your best interests at heart。 Many brokers will 。'； spend the time educating you； and they could be the best asset you find。 Just be fair； and most of them will be fair to you。 If all you can think about is cutting their missions； then why should they want to be around you？ It's just simple logic。
As I said earlier； one of the management skills is the management of people。 Many people only manage people they feel smarter than and they have power over； such as subordinates in a work situation。 Many middle managers remain middle managers； failing to get promoted because they know how to work with people below them； but not with people above them。 The real skill is to manage and pay well the people who are smarter than you in some technical area。 That is why panies have a board of directors。 You should have one； too。 And that is financial intelligence。
7。 BE AN 〃INDIAN GIVER〃： This is the power of getting something for nothing。 When the first white settlers came to America； they were taken aback by a cultural practice some American Indians had。 For example； if a settler was cold； the Indian would give the person a blanket。 Mistaking it for a gift； the settler was often offended when the Indian asked for it back。
The Indians also got upset when they realized the settlers did not want to give it back。 That is where the term 〃Indian giver〃 came from。 A simple cultural misunderstanding。
In the world of the 〃asset column；〃 being an Indian giver is vital to wealth。 The sophisticated investor's first question is； 〃How fast do I get my money back？〃 They also want to know what they get for free； also called a piece of the action。 That is why the ROI； or return of and on investment； is so important。
For example； I found a small condominium； a few blocks from where I live； that was in foreclosure。 The bank wanted 60；000； and I submitted a bid for 50；000； which they took； simply because； along with my bid； was a cashier's check for 50；000。 They realized I was serious。 Most investors would say； aren't you tying up a lot of cash？ Would it