46 - Invest 10% of your income - learn how to pay yourself first as your top personal investing strategy!

Reason for this Goal and how to pay yourself first:       The single best personal investing financial habit you could develop and apply is paying yourself first.   This single habit will change your financial destiny.

Take 10% of each pay cheque and invest it into appreciating assets.  Just like you would pay all your expenses (car, insurance, utilities, mortgage, etc.), consider the “Pay Yourself 10%” as a mandatory expense that you pay.  

How to pay yourself first!

The "how to pay yourself first" is as simple as putting this money into a separate savings or investing account as your first payment, after you pay for your absolute necessities (i.e. rent or mortgage).   If you are in a poor financial situation, start with 1% and work you way up in 1% increments until you are paying yourself a minimum of 10%.   Don't delay.   Start NOW.  Consider this payment as important as paying making your car payment or paying your hydro bill.   

The key is that you need to create the HABIT now.   DON'T WAIT UNTIL YOU THINK YOU ARE MORE READY.   START NOW, even if it is $ 10/month.  The habit needs to start now, not in 10 years, or you will miss out one one of the wonders of the world . . . compound interest.

Spending below your means is important.   Don't overspend on lifestyle.  

If you want to be really wealthy, double the 10% to 20%.  You will be happy you start this key financial habit, as this single habit will (should) allow you to become a millionaire before the time you retire.    Much sooner if you adopt 20%.

Key Point:   
"It's easier to spend what's left over after savings than it is to save what's left over spending"

If you use on-line banking, setup a special SAVINGS (INVESTING) account.    Setup an AUTOMATIC transfer of your amount (ideally 10% but start with a smaller amount if necessary), on the day after you get paid.    

Understanding assets and why you should focus only on the appreciating type!

With personal investing and as follow-up once you understand how to pay yourself first, there are many appreciating asset classes to invest in to develop your net worth.  In general, you want to buy things that go up in value (appreciate) versus things that go down in value (depreciate).  

Appreciating Assets

  • antiques
  • art (quality for reputable artists)
  • bonds
  • collectibles
  • classic cars
  • diamonds
  • dividend paying stocks
  • index funds
  • jewelry (quality)
  • guaranteed investment certificate (GIC)
  • gold
  • land
  • mutual funds
  • real estate (residential, commercial, vacation properties etc .)
  • Real Estate Income Trust (REIT)
  • silver
  • stocks
  • etc.

Depreciating Assets

  • all terrain vehicles (ATVs)
  • boats
  • camping trailers
  • cars and all types of vehicles - most new vehicles depreciate approximately 50% within 3 years from the time of purchase.
  • clothes
  • computers
  • electric tools
  • electronics
  • furniture
  • lighting
  • machinery
  • music instruments and equipment
  • recreational vehicles
  • snow mobiles
  • trucks
  • etc.

Assets generally depreciate due to wear and tear through the passage of time and other key factors such as obsolescence.  Most people are interested in purchasing new products and that is one of the main reasons assets depreciate due to the law of supply and demand.

To understand Personal Investing . . . 

To really understand this concept of how to pay yourself first, read The Wealthy Barber, by David Chilton.  This is a legendary book and a must-read book for all those new to investing. 

To understand how to invest in the stock market, read about the investing strategies of the # 1 investor of all time: billionaire, Mr. Warren Buffet.   

To understand the benefits of real estate investing, check out my page on Real Estate Investing Goals.  We own four homes on our street known as Gables On The Park and this was one of the foundational keys to our success. 

With the application of this goal, and the benefits of learning about compound interest (discussed in Goal # 41 - Learn Personal Finance 101), you benefit the most by starting to invest in appreciating assets as soon as you start earning income, to have the maximum benefit of time for the compounding to work for you. 

Now that you've learned how to pay yourself first, don't delay and START today.   


The Wealthy Barber book is highly recommended for understanding the concept of paying yourself first.

Purchase this book on Amazon here.  You will go directly to Amazon's book ordering site.  

Motley Fool Investment Advice

Founded in 1993 by two American brothers Tom and David Gardner, The Motley Fool has helped millions of people attain financial freedom through their website, podcasts, newspaper column, radio show and investing services.   I replaced our financial advisor a year ago with a subscription to their Canadian service and am happy to recommend them as an honest source for excellent financial advise.   

www.fool.com - This is their website URL for those in the US.  

www.fool.ca -  This is their website URL for those in Canada 

One of the best pages on the internet about investing in the stock market is on their website The Top Index Funds, which provides quality information describing why you should consider investing in index funds versus individual stocks or managed portfolios.    Follow this advice and over the long term see how you can outperform most professional money managers by investing in Exchange Traded Funds (ETF)s.   

Take time to develop your personal investing strategy and to understand how to pay yourself first.  Ensure that paying yourself 10-20% first becomes a key component of your strategy.  

Suggested Goal(s):   Put 10% of each pay into an appreciating asset account.   
Your Outrageous Goal:  Own > $X in appreciating assets by retirement.

Return to financial goals.


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Last updated: January 25, 2020