A lot of people (including myself before) are thinking of high salary, working abroad, winning the lotto are some of the best solutions to their money problems.
Are these really true?
Sometime in 2005, I decided to pursue my career overseas. I got my 2 years contract with one of the biggest telecom company in Afghanistan.
The company is giving me a monthly paycheck which is around 6 times of my salary. I was very happy because in my mind, 1 year of staying overseas means I can earn money which is equal to 6 years of working locally.
This is true in figures but didn’t happen though because of my spending habits. As my income increase and so my expenses. This is one of the concepts of Parkinson’s law. Robert Kiyosaki refers this as the “rat race” that most people trapped into until their old age.
In one of his seminars, Brian Tracy says this is the reason of money problems such as debts and failure to accumulate money.
If you are seeking for financial independence like me, we all need to break this law. Knowing this law is not enough without taking actions.
So what are the practical actions we need to take to break this law?
Here are the two actions you could take immediately to start breaking this law:
Stop all unnecessary expenses especially those that are categorized as “wants”. Evaluate carefully and scrutinize each expense as if your budget is in big trouble. It is also good to make up a budget plan for the whole year to minimize and prioritize the expenses.
Save and invest at least 50% of any increase or bonus you may receive. I have done this for past 3 years and I was amazed of the result on my stock portfolio.
Always remember that “Financial independence comes from violating Parkinson’s Law.”
Photo credit: Dave Meier