Why should the landlord be paid first?
I was talking to a mentor of mine recently about what we are building here at Dobot. Mike had a very successful career (mostly later in life) and now splits his time between his grandchildren and traveling the world with his wife. We were talking about how saving money can be pretty tough, especially early in life when earnings can be low or erratic. This is one of the reasons we built Dobot. He made a passing comment that really stuck with me:
I was told early on to pay myself first.
What? I don’t remember anyone telling me that and I have a finance degree! It also struck me as the right thing to do: Of course, you should pay yourself first. You are your highest priority.
Paying yourself first is probably the most profound, and yet completely overlooked, tip for building wealth. Pay myself before I pay my landlord? The utility bill? The grocery bill? Okay, maybe eating is first, but my future should be a close second, right? I’m pretty sure the Bill of Rights doesn’t address the order in which you have to pay the bills. Now I’m not suggesting you should leave those other bills unpaid. Unlike some other advice I’ve seen, I believe walking away from your debts is a horrible financial decision and should be taken only in the most extreme circumstances (maybe I’ll write about that later). I’m just saying that we work hard so that we can take care of ourselves and our loved ones. If that’s the reason, shouldn’t we rank that payment first?
It doesn’t have to be a huge amount. That can come later. Mike noted it wasn’t much in those early days; like $5–10 a month (which would be about $50–75 today; he’s kinda old) but he also noted that as he got older and made more money, he gave himself raises as well. Over time, the number got larger and larger. In fact, he believes this simple act had the largest impact on his ability to travel the world with his family; giving his grandchilden, and himself, experiences they all cherish. And at the end of the day, isn’t that what this is all about? Living a full life? So pay yourself first. And create memories about things that matter to you.
Image credit: marlssbarkley