The Painfully Obvious Strategy That No One Follows

Paying yourself first means that before you pay your rent, your student loans, or your bar tab, you siphon off a portion of your income and put it into savings and investments. No exceptions. No “I’ll catch up next month.” No “But I really need that third streaming subscription because, you know, documentaries.”

And yet, most people do the exact opposite. They pay their bills, spend on whatever nonsense feels urgent at the time (e.g., $7 lattes and yet another pair of athleisure pants), and then, if there’s anything left, they might toss a few bucks into savings. Except there never is anything left because life—especially the capitalist, consumer-driven version of it—is designed to extract every last penny from your grasp.

The Lazy Person’s Path to Wealth

The beauty of paying yourself first is that it’s the easiest, laziest way to get rich over time. It requires precisely one decision: automate it.

Here’s how to do it in three idiot-proof steps:

1. Set Up Automatic Transfers – Have a fixed percentage of your paycheck (ideally 15%-20%, but even 5% is better than the big fat zero most people save) automatically deposited into a savings or investment account before you ever see it. If your employer offers direct deposit, split your paycheck so that a chunk goes straight to savings. If they don’t, set up an auto-transfer from your checking account the day your paycheck hits.

2. Pretend That Money Doesn’t Exist – Seriously. The money in your savings and investment accounts is not for groceries, concert tickets, or a “treat yourself” weekend in Vegas. It’s locked away for your future self, who will thank you profusely when they’re sitting on a comfortable pile of cash instead of subsisting on instant Ramen noodles at age 65.

3. Invest It Like a Grown-Up – If you’re just letting that money sit in a savings account earning 0.00001% interest, you’re doing it wrong. Put it into a diversified portfolio—index funds, exchange-traded funds (ETFs), whatever suits your risk tolerance but doesn’t involve YOLOing into crypto on a whim.

Why Most People Screw This Up

The problem with paying yourself first is that it’s too simple. It’s not flashy. There are no viral TikTok influencers shouting about it in their rented Lamborghinis. It doesn’t involve options trading, meme stocks, or some convoluted tax loophole only known to billionaires.

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It also requires delayed gratification, which is kryptonite to the average person. We live in a world where people finance $1,500 smartphones over 36 months while struggling to put $100 into an Individual Retirement Account (IRA). We crave instant rewards—why bother saving for a comfortable retirement when you could be enjoying bottomless mimosas at brunch?

But What About Debt? Shouldn’t I Pay That First?

Look, if you have high-interest debt (think: credit cards charging you 25% interest like they’re the mafia), then yes, attack that aggressively. But don’t use debt as an excuse to avoid saving altogether. If your employer offers a 401(k) match and you’re not contributing at least enough to get the full match, congratulations—you just left free money on the table, genius.

Even if you have debt, you should still be putting something away. Why? Because if you don’t develop the habit now, you never will. And when you finally do get out of debt, you’ll just find new ways to spend everything you make instead of actually building wealth.

The Magic of “I Never Missed It”

The best part about paying yourself first is that once you set it up, you’ll forget the money ever existed. You won’t miss it because you never got a chance to spend it. And one day, years from now, you’ll log into your investment account and see a six-figure balance staring back at you.

So go ahead—keep chasing poorly researched stock tips from your barber, scrolling through get-rich-quick schemes, and telling yourself you’ll start saving “next year.” Or…just automate your savings today and let your future self live the good life while everyone else is still trying to figure out why they’re always broke. Your call.

PS: There’s a colleague of mine who makes money for his followers, in up or down markets. His name? Jim Fink, chief investment strategist at Investing Daily.

For most income investors, collecting quarterly dividends is the norm. But what if there was a way you could get paid each and every week, 52 weeks a year?

Well, Jim Fink has developed an investment system that does all that…consistently, methodically, and with mitigated risk. Click here to learn more.

John Persinos is the editorial director of Investing Daily.

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