How To Self-Manage Your Own Money With A Six Accounts Strategy

Would you like to have better self-management of your money so that you have enough to save for retirement, invest, play & pamper, and at the same time doing your part to contribute to the charity on a regular basis?

If you do, you can actually make sure of this Six Account Strategy that I have learned from T. Harv Eker’s brilliant book called, The Secrets Of A Millionaire Mind.

Why Should You And I Make Use Of This Strategy?

My personal experience from what I learned from most people, who have just received their bring-home income and including my own, is that the money will be used to pay off most of outstanding bills and loans, settle and pay for any necessities and the rest is kept in the bank account (if any is left, of course).

All these are usually done on a irregular amount and inconsistent basis, do you agree as well?

– For Investment And Education Opportunities

For example, if there’s a good (as in really, really positive and good potential) investment or education opportunity that may just come up to you, you may keep asking yourself whether you should go for it and leave a slight cut on your bank account or use it for other personal uses… For most people after this much of pondering and thinking that using the money for other personal uses is better, this one chance may just slip away and never appear!

Such case did appear to me, in one particular case of stock investment where there’s a strong potential growth of at least 20 – 30% capital gain. I do have the money to invest but… I wanted to use that money to spend on some latest Tech Gadgets. So at the end of the day, I did not invest or spend on any Gadgets (because the better ones are coming up, again!). The stock grew and it was too late for me to go into it!

– For Retirement Planning And Charity Giving

Likewise for Retirement Planning, most people do not concentrate much on this particular section of planning and rather spend most of their money on other areas. They only plan and invest towards the last few years of their working life and hope that miracles will happen at the end of it! Usually, such things will never happen to the mass majority!

I am a believer of Charity Giving and I would try to donate to my charity choice once I have the spare cash. I would like to do it on a regular basis but I am, like any other normal person, that these donations should be spent on other uses. And to side-track, do you know that by giving away a bit of what you have to help others, you will get “rewarded” (not just in monetary sense) many times back? That’s why many millionaires are requesting people to step out and do their part in charity giving.

So if you did face such situations before (which I did) and you would like to have a way out, you should try on T. Harv Eker’s Six Jars System today!

How Does T. Harv Eker’s Six Jars System Work?

In general, you need to have so-called six accounts (i.e. actual bank savings accounts or some form of Excel Sheet tracking) to separate your bring-home income.

And under the Six Jars System, you should have these accounts and the percentage of your bring-home income in it:

1. Financial Freedom Account (10%) – This account is meant for your Investment Purposes. Making sure your money works hard for you! Please do not try to use this money to try on the lottery. The money in this account is meant to go into good investments like Stocks, Unit Trusts, Properties or any assets that will give you a significant rate of return as compared to the usual bank savings account rate. Any dividends can be re-invested or to go into your Long-Term Savings Account.

2. Play Account (10%) – Entertainment, Pampering your Loved Ones, Eat Your Heart Out and/or Small Bit Of Gambling will come from this account. And a good thing of this account is that you can spend every single bit of the money! Do not try to accumulate for the next month unless you are planning for a holiday! So just find means and ways to spend it and have no regrets!

3. Education Account (10%) – Seminars, Talks, Books and Magazines are good source of knowledge that will better financially educate yourself. For example, to know how  to choose good stocks in the long run, you will need to know the basics of choosing and investing into a good company (like Warren Buffett) or when to buy-and-sell or buy-and-hold your stocks, all these will need some form of education. Therefore spend the money from this account on some good education courses to upgrade yourself!

4. Long Term Savings Account (10%) – Planning for Retirement does not take you much efforts, just 10% of your bring-home income and let the magic of compounding returns and time work on to increase your net worth in this account. This account should not consist of any high-risk component because you have your Investment Account to take care of it. There are many good considerations for your Long Term Savings Account and you can make use of your Education Account to educate yourself on it! 😛

5. Giving Account (10%) – As mentioned earlier, it’s always good to give back to Society and to help those who need it because I believe that if you do that on a regular basis, you will be “rewarded” in many areas back. Find a good charity with a good cause and donate on a regular basis!

6. Necessities (50%) – Your Basic Food Expenses, Transportation, Bills, Loans, Insurance Premiums, or anything that you need to pay back will come from this account.

The Benefits Of Following This 6 Jars System Strategy

  • By having this six accounts, you have a clearer picture of your current financial standings. For example, after taking care of the first 5 accounts and you realize that you have not enough for the last account, it means you have to find ways to increase your income or to cut down on some unnecessary necessities.
  • You will not miss any good opportunities because you have the necessary accounts to take care of them. For e.g. you find a new investment opportunity but you do not really understand the nature, you can invest in a good course and go into it when you are ready!
  • Never have to think and ponder so much! If your accounts have enough to go into any good opportunities and that you have verified that they are good, you can simply just go for it!

To educate yourself better, you can learn from the self-made millionaire himself, T. Harv Eker and his products:

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