‘Expenditures rise to meet income.’ – C. Northcote Parkinson
Parkinson’s Law is one of the best known and the most important laws of money and wealth accumulation. It was developed by Englishman, C. Northcote Parkinson, in 1955 and it explains why most people retire poor.
Parkinson’s Law says that, no matter how much money people earn, they will tend to spend the entire amount plus a little more. Their expenses rise in step with their earnings. Many people are earning today several times what they were earning at their first jobs, but for some reason, they need every single cent to maintain their current lifestyles. No matter how much they earn, there is somehow never enough.
Financial independence comes as a consequence of breaking Parkinson’s Law. You need to develop a plan and sufficient willpower to resist the urge to spend everything you earn. You must ensure that your expenses grow at a slower rate than your earnings, then save or invest the difference.
Other wonderful quotes by C. Northcote Parkinson:
‘Work expands so as to fill the time available for its completion.’
‘It is better to be a has–been than a never-was.’
John Lloyd is a business growth strategist, award-winning marketer, speaker, trainer, columnist and author of the book Smart Thinking for Crazy Times.
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