It is true that this subject is not usually discussed among successful entrepreneurs. This is because this MONEY RULE is one singular rule that determines whether you are going to be a successful or unsuccessful entrepreneur. As such, there were already expected to know the MONEY RULE before now.
If you are an entrepreneur; you will agree with me that being an entrepreneur is hard and tough. But it is HARDER and TOUGHER to be a successful entrepreneurs. That is why we as a young aspiring entrepreneur must watch our steps to be sure we are going the right path.
I remember when I was in secondary school; my teacher will always tell us: “if you play away your time; don’t forget you will have to contest with those who invest their time.” That singular saying changes all about us! It made us to know that we are what we do with our time and that our future depends on the event we chose to spend our time on. Back to business!!!
This MONEY RULE is know by some notable successful business men. Mention, any successful entrepreneur; I bet he knows this rule. It is call the Parkinson’s Law.
Parkinson’s Law states that Expenses will always RISE to MEET Income. This law was the reason why we had some directors died 10 years after retirement. I think we need to explain this Parkinson’s Law; what does this law really mean?
Explanation of Parkinson’s Law:
Let say Mr A is a contract staff to Shell and his salary was 25,000. Mr A, decided to be squatting with his parent because the salary was small. He chose to shop at KATANGUA (SUPPER) instead of Shoprite. Mr A won’t buy fast foods. He washes his cloths himself! But now…..Mr A sallary was increased to 50,000.
Immediately after the incremen, Mr A, felt he need to get some new cloths and he decieded to shop at JustRite instead of shopping at Katangua (supper). He also felt he deserved to eat fast food after all he has the money. He also needed privacy. So, he went to rent a room at Mainland.
Not too long; his salary up to 250. Mr A, relocated to Ikeja where he had to pay 750k annually on rent. He bought a big gen and got a tab. In fact, shopping at Justrite is stressful. So, he began to make orders online. He also felt going by public buss is no longer befitting. So, he goes out on Taxis. like that and like that…
As you can see from the above example; Mr A Expenses Increased along with his Income. People like that will never be a successful entrepreneur.
In fact, there are lots of Pastors, Doctors, Teacher, Engineers, Imams and Entrepreneurs who practiced this law. If there is anybody who is successful with money; it is certain that they understood Parkinson’s Law.
This is how Brain Tracy puts it:
Parkinson’s Law is one of the best known and the most important laws of money and wealth accumulation. It was developed by English writer C. Northcote Parkinson many years ago and it explains why most people retire poor.
This law says that, no matter how much money people earn, they tend to spend the entire amount and a little bit more besides. Their expenses rise in lockstep with their incomes. Many people are earning today several times what they were earning at their first jobs. But somehow, they seem to need every single penny to maintain their current lifestyles. No matter how much they make, there never seems to be enough.
The first corollary of Parkinson’s Law says: Financial independence comes from violating Parkinson’s Law.
It is only when you develop sufficient willpower to resist the powerful urge to spend everything you make that you begin to accumulate money and move ahead of the crowd.
The second corollary of Parkinson’s Law is: If you allow your expenses to increase at a slower rate than your income, and you save or invest the difference, you will become financially independent in your working lifetime.
This is the key. I call it the “wedge.” If you can drive a wedge between your increasing earnings and the increasing costs of your lifestyle, and then save and invest the difference, you can continue to improve your lifestyle as you make more money. By consciously violating Parkinson’s
Law, you will eventually become financially independent. From this point forward, resolve to save and invest fifty percent of any increase you receive in your income from any source. Learn to live on the rest. Save fifty percent of any amount that you receive from any source. This still leaves you the other fifty percent to do with as you desire.
Successful Entrepreneurs learnt how to break this rule. If you must be a successful entrepreneur; then learn to break Parkinson’s Law.
I hope you enjoyed this piece.
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