A few life iterations ago at the turn of the century found me working at a bank – US Bank.

I worked initially at their Wedgewood branch and then after a year at their Northgate branch.

Besides opening accounts and fielding complaints, one of my primary responsibilities was to “sell” home equity lines of credit.

As I result, I appear to have contributed my little part to what eventually manifested as the “popping” of the “real estate bubble” and with it the US economy’s 2008 collapse.

Well, one of the concepts that I yet remember from those halcyon days was that we couldn’t generally extend credit beyond a 45 debt to income ratio.

What this meant is that anyone wanting to turn their home into their own “private ATM” so that they could draw out “excess reserves of credit,” would need to have the means to pay off their primary mortgage as well as the secondary line of credit.

Specifically, this means that they could not have aggregate debt of over 45% of their income. Pretty simple right!

Ok, now it is important here to take note of the fact that we did not question to what purpose any of the money was to be used other than to keep goose them down the borrower’s track.

But obviously, there is a huge difference between borrowing money to spruce up the basement so that you can rent it out and thus both make their homes more valuable and to generate a stream of income versus say the purchase of a European vacation or jet ski.

Banks at that time  didn’t – and I suspect still don’t – care whether or not they were assisting to make people wealthier or wage slaves.

But now I do!

Most people have heard the phrase: “Pay yourself first.”

And this means exactly what it says.

Create a plan and stick to it – i.e. a financial habit – in which at least the first 10% of your income is moved out of your paycheck (or in lieu out of the bank account that receives your pay check on payday) and have it go into a savings or better yet investment account.

Surprisingly, this is a habit that you should establish even if you are deep in debt.

I’ll go into detail why in another post. But just trust me this is critically important.

What is just as critically important is that this money remains untouched and growing unless used for an opportunity in which there is a clear, low risk return on investment.

Again, I’ll go more into detail as to what I mean by this.

Here though, what is important is that it will serve to get you on the correct side of the income ratio.

Specifically, this means instead of a debt-to-income ratio, now you are looking at a savings-to-income ratio.

And it is this one idea that will start you on the path to becoming wealthy instead of poor.

It’s simply a matter of choice and responsibility.

And the cool thing is that once you get started, you can then track not only the amount of money that starts to accumulate in your savings account, but how by increasing the ratio by just a bit, how much more quickly your money grows.

Believe me, following this financial habit is a lot more fun than worrying about where the money is going to come from when there is no more credit to be found.

That’s a fact I learned the hard way.

Take it to the bank!