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The "Rule of 10" is a very simple concept to understand, but one of the most difficult concepts to implement. If it were that easy, everyone would be rich. But it takes hard work and discipline.
The Rule of 10 works like this. Once you get your paycheck, immediately pay yourself first. Take the first 10% of your earnings out and deposit it into a separate account. This could be a savings account, a money market account or a 401(k). This may be difficult or even uncomfortable at first, because most individuals are on a fixed budget and cannot afford committing 10% to savings. If you cannot commit to saving 10%, start with 5% and gradually work towards 10%. If you can afford to do 10%, try saving 15%.
After a few months of successfully paying yourself first 10% at a time, you are ready to take the next step in making your money work hard for you. In this next step, all you do is take 15% of the total that you have saved and invest it in a mutual fund or a money market account. For example, if you have accumulated $3,500 in savings, take $525 of that and invest it.
In the mean time, continue to adhere to the Rule of 10, and pay yourself first. It doesn't mater if you have a little bit of money or a lot of money to start. The most important thing is that you begin saving as soon as possible . It's never too late to start working towards financial freedom.