Your “burn” determines your wealth, now and into the future.
Here’s how the math works. Simply take your income, subtract your expenses which is what your burn is and you’re left with what remains, which builds your wealth.
My personal experience over three decades is that most people simply will not live with a budget. So, knowing that, this is what I suggest instead. For one month, only one month out of your life, simply track your expenses – the burn.
I don’t need to provide you a list. They’re everywhere. Simply google – monthly household expenses. There are plenty of sites, with plenty of lists of rent or mortgage, car loans and childcare, cellphone, internet, insurance; you know the drill. Be as complete as possible. Don’t include savings in your calculation; because savings isn’t a burn, unless your one of those who regular burns through their savings; or you ‘save’ to you can buy something. That’s not savings; it’s a delayed burn.
Here's the key to this exercise. Look at the items on your burn list. Are they all really necessary? Have you shopped around to compare prices of some of the “have-too” burns on your list?
My wife Betty and I did this exercise two years into our marriage almost forty years ago and we visually saw our ‘burn’ problems almost immediately. We made adjustments to our spending – our burn, and changed our lives forever. In fact, we were so inspired, we actually began to keep track of our burn, each month for over two decades.
It you want the easy way to create wealth, I guess that’s what lottery tickets are for and we know the success odds to that working; but if you want to gain true control, you need to control your burn.
