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Saturday, March 04, 2006

Getting Rich - The Solid Way

I spoke to my boss, who was an investment banker for many years, and asked him, “What is the fastest way to get rich?” He answered “Pay yourself first.” It’s a historical and proven method that is written in many books and websites. Paying yourself first means setting aside a portion of your paycheck and save it up. He also said, “Protect your base.” Protect the principal investment. You want to protect yourself from losing the principal; losing your principal makes it more difficult to catch up. So, you must guard your base. After you generate enough interest from your principal you could use that extra money to take more risk. If you lose the principal, you would not be able to take much risk. Therefore, protecting your base is crucial. Once you have guarded your base you’ll be on your way to getting rich.

2 Comments:

At 3/05/2006 06:56:00 PM, Anonymous FMF said...

Good advice.

If you want to learn more about paying yourself first, read "The Richest Man in Babylon".

 
At 3/06/2006 07:15:00 AM, Anonymous Harrison said...

I totally agree that we should protect our base in investing. Without losing our principal means we still have chance to catch up and earn back what we have lost.

 

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