Do You Know That You Can Live Like a Queen/King ?


It’s Mike from Fabulously Broke, do you feel powerful today?

If you don’t, you will as I’m about to tell you how you can live like a Queen or a King! Nope, I’m not going to tell you about the latest get rich quick scheme. They never work anyway! This email is about how you can setup a good investing strategy and enjoy retirement the way you should; like a Queen/King!

Day #8 It’s Time To Pay Yourself First!


Pay yourself first, you’ve heard of that concept before, right? In the Wealthy Barber, they suggest to save 10% of your income and invest it. This is a brilliant advice! So your first reflex should be to setup a monthly investing plan of 10% of your income.


Investing should be your #1 priority after getting insured. Forget about paying down your debts, this is priority #3. It goes after getting insured and investing. Why? Because the first one makes sure that you can maintain your lifestyle if something bad happens and the latter make sure you acquire assets which will make your life much easier in the future. As for the debts, we already settled that in a healthy manner in Day #6 and Day #7 (you can click on the days to review previous email if you have lost them).


For now, just get 10% of your income into a savings account (such as an ING Orange Account), we’ll look at what to do with it later on. What? You can’t invest 10% of your income since you use all of it? Don’t lie to me; you we have found some cash on Day #3 and you restructured your debts to free more cash flow in Day#7. After those 2 steps, you should have enough money to a) pay for your insurance need and b) save 10% of your gross salary and invest it.


How To Get The Government Finance Your Retirement

I just told you to save 10% of your gross income, right? But did you know that there is a way where you can get the Government to contribute in your Queen/King retirement plan? It’s called the 401(k) (or RRSP for Canadian!). I’ve studied both program and they have something in common: they are both sponsored by the Government! How do they do that? Through tax refund!

Here’s an example:

  • ü  Your tax rate is 25%
  • ü  You make $50,000/year
  • ü  You save $5,000 (10%) into a 401(k) or RRSP
  • ü  This money is considered pre-tax savings
  • ü  Since you pay taxes directly from your pay check, your employer make you pay taxes on $50,000
  • ü  The 401(k) or RRSP contributions are tax deductible!
  • ü  Therefore, your taxable income is $45,000 ($50,000 – your contribution)
  • ü  This means that you get a tax refund on the $5,000!

ü  At 25% tax rate, you will get a tax refund of $1,250 ($5,000 X 25% tax refund)

ü  So in order to save 10% of your gross income, all you need is $3,750 ($312.50/month) or 7.5% of your gross income.

ü  If your tax rate is higher (e.g. you live in Canada ;-)), your tax return will be even bigger!


Do you think you can save $312.50 to live comfortable for the rest of your life? I’ll tell you one thing; if you start with 10% right away, you’ll get used to it and you will eventually be able to save 15% or 20% and then, you will live like a Queen or a King at retirement.

What’s The Next Thing to Do: Start Investing 10% of Your Income

The most important part of this email is that you, Pete, take action! Open an ING Orange Account and start saving 10% of your pay check right away. You should be your most important creditor and this is why we say that you need to pay yourself first. If you don’t, nobody will help you when you turn 65 and you can’t work anymore. You certainly don’t want society to cover your expenses at that point… ’cause there won’t be any money left!


But wait! How do I invest?


I was about to leave you without a hint of what do you with your money, huh? Don’t worry, I just didn’t want to kill you with more stuff today! Start the savings habit now and I’ll give you more insight on investing in the next email.


Upcoming email: Day #9 I’ll Tell You What People Ignore About Investing







About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.