Here’s how much money a self-made millionaire saves to continue growing his wealth

May 7, 2016

ABOUT DAVID
David Bach is one of America’s most prolific and bestselling financial authors of our time who has helped millions around the world learn how to live and finish rich through his books, seminars, television appearances.
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If you want to get rich, you have to learn to pay yourself first.

But just how much of your earnings should you set aside for retirement and other savings to ensure lifelong wealth?

For one self-made millionaire, the magic number is 20%.

“Today, my wife and I each strive to pay ourselves the first 20% of our gross income,” writes David Bach, who became a millionaire by age 30, in his book, The Automatic Millionaire.

David Bach Business Insider

“That may sound like a lot, but because I’ve worked up to it gradually over the course of fifteen years, it’s become our new normal”.

It took a while for Bach to grasp the idea of paying himself first: “When I first heard about this concept I was doing what most people do — trying to budget, beating up on myself for failing, and then scrambling at the end of the year to find some money to put in my retirement and savings accounts, only to find another year had come and gone and I had not made any financial progress,” he writes.

Even when he did start setting aside money, it was a mere 1% of his paycheck, he says: “I was in my mid-twenties, and I wanted to make sure it didn’t hurt. Within three months, I realized that 1% was easy, so I increased the amount to 3%.”

Over time, he’s gradually increased his percentage — from 3% to 10% to 15% — until he reached 20%.

He says anyone — no matter your income — can put money aside and let it accumulate. You’ll learn to live without it, Bach assures: “If you are not paying yourself first now, that’s probably because you think you can’t afford to… But I can tell you from personal experience that once you decide to pay yourself first and then you make it automatic, it’s done — and within the first three months, you totally forget about it. You’d be amazed how effortlessly you can learn to live on a little less.”

If you’re only comfortable with setting aside 1%, it’s better to start there than not get started at all. “This one little step will change your habits and make saving automatic,” writes Bach. “And that will put you on a path that ultimately will make you rich.”

+ show Comments

  1. Drauzio Eduardo Naretto Rangel says:

    Dear David,

    Even before I knew the term Pay Yourself First from your book, I was saving almost or more than half of my PhD fellowship at Utah State University that was US$ 1000.00, at the end of my four years PhD I have in my savings more than 25 thousand dollars. I liked very much your books and I learned very much. I would like to ask you where can I save money in US with interest better than savings or money market account. I am not American so I may not be qualified for Individual Retirement Arrangements (IRAs) or other investiments that are for American citizens. I have a bank account at Zions Bank in Utah with some investiments but in money market account.

    My best regards

    Drauzio

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Hey there, I’m David.

Thank you. Over the past 30 years, I've had the privilege of reaching over 100 million people through my books, podcast, and media appearances. I've written 12 national bestsellers including The Automatic Millionaire®, Smart Women Finish Rich®, and The Latte Factor—with over 7 million copies sold in more than 20 languages. 

I've been honored to appear on NBC's Today Show over 100 times and have been featured on The Oprah Winfrey Show, CNN, Fox News, CNBC, and more. My work has been profiled in The New York Times, Forbes, TIME, and The Wall Street Journal. 

What has always driven me and still does is this: I want to help you live and finish rich. Whether you're just starting out or looking to make smarter financial choices, I'm here to guide you with real conversations and proven strategies.

At seven, my grandma handed me a stock certificate instead of a Happy Meal. That moment sparked my lifelong mission: to help you take control of your money and build lasting wealth.

Learn More

Bach Wisdom & Sixteen Timeless Truths

These truths have come from over 30 years of learning. Mostly from experience and also mentors. Feel free to pass them along.