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The Third Step: Saving Money

This is undoubtedly the most boring part of the getting rich process. It is also undoubtedly the most difficult. You find yourself, now, having completed steps one and two, deprived of many of life’s luxuries you once enjoyed, and you find that your friends and family think you are insane. And! You find that nobody has rewarded you in the slightest. Well, get used to this feeling, because you’re going to feel like this for a few years. Yep, you read that right – a few years.

You will now save all of that workable cash. Stockpile all of it in a checking account that you do not touch.

When do you stop?

When you find that you have saved a year’s worth of living expenses in your account, then you can start saving all over again in a savings account. Many will say that you only need 3-6 months of living expenses saved up. That is certainly better than nothing, but do remember that it is very unlikely that your year of living expenses will keep you going for a year. This fund is for all emergencies. What if you suddenly need a new car? What if you need to give money to a dying relative who has no medical insurance? There are plenty of things that can happen which will use up this money. So, make sure you have a year of living expenses saved up in that checking account. If you have done the minimum (workable cash = living expenses), then this will take you a year.

Okay, I’m saving in a checking account now. Now what?

Great! There is no next step. Just keep saving. Okay, okay, there is a next step, but you shouldn’t think about it. You are going to be saving in this checking account for so long that you shouldn’t even care about the next step. Focus on saving the money.

Throughout the third step, you should be studying ways to make money. Information will be provided on this website, but you should be aggressively studying on your own, too. Try some of the books we have here in our books section. Continue trying to find new ways to cut costs and increase your income.

This step will actually become easier as time goes on – when you see your accounts growing to sizes you have never seen before, you will get excited. Then, suddenly, it will become a lot easier to save even more money. It does indeed get exciting.

Check the home prices in your area – duplex’s or quad-plex’s, if possible. Figure out the average value. When you have saved 40% of this in your savings account, it is time to move on to the fourth step. Be sure to replace all income used from the emergency savings (if you use any) completely before you begin to save again in your savings account.

If you are ready to move on to step four, pat yourself on the back. You have just finished the hardest part of the entire getting rich process. You have gotten farther than most people who try to get rich. From now on, everything is downhill – it will be easier forever. You have what it takes to be rich. Congratulations, sir or ma’am. You are a future multi-millionaire.