6 Money Rules That Will Make You Rich
“90% of being good with money is controlling your emotions and delaying gratification.”
6 Money Rules to help you smash your financial goals
Making money and managing money are two different skills. And you won't get rich until you master both.
We are going to go over 6 money rules that will help you better manage your money.
I am confident that if you follow all 6 Money Rules, your money situation will significantly improve within months.
So make sure to take some notes and use these money rules to help guide you along your financial journey.
Money Rule #1: Don’t Borrow Money to Buy Luxuries.
This is a rule that is commonly broken by people who are clueless about money. Banks will gladly loan you money to buy the things you want, but selling your future income to buy things that you don’t really need will keep you broke. Don't get me wrong, debt can be used to your advantage if used correctly. But not if you're using debt to buy things that don’t go up in value (AKA, luxuries and liabilities).
Money Rule #2: Don’t Lend Money to Friends You Want To Keep.
Most of the time (not always), lending money to friends ends in disaster. If you’re going to give money to a friend and you don’t want to lose that friendship, it’s better to give the money as a gift and not expect anything back.
Money Rule #3: Treat Credit Cards Like Debit Cards.
Credit Cards are a double-edged sword. They can either be used to your advantage or disadvantage. Credit Cards are a great tool to start building credit and also earn some extra cash on the money you would normally spend anyway.
However, they can quickly end up causing a financial disaster if you don't spend carefully. Credit Card companies make their money on locking people into high-interest rates due to reckless spending.
If you’re going to use credit cards, treat them like a debit card and ONLY spend money you have & pay them off in full every month.
Money Rule #4: If You Can’t Buy it Twice, You Can’t Afford It.
It’s very easy to fall into the bad habit of spending every dollar you make as soon as you get it. If You Can’t Buy it Twice, You Can’t Afford It. This is a great rule to follow to help you control your spending. At the end of the day, just because you can technically afford something, doesn’t mean you can actually afford it.
Give yourself some financial wiggle room to breathe!
This rule would apply to monthly rent, mortgage, and car payments as well.
Money Rule #5: Invest $20 Out of Every $100 You Earn.
If there is only one rule you choose to follow, I hope it’s this one. Invest $20 out of every $100 you earn, do whatever you want with the other $80, and you will become wealthy given enough time! Investing 20% of your income is a great number to aim for as you will slowly start to build a nice cushion of assets that will eventually be able to replace the income you work hard for.
Money Rule #6: Spend Less Than You Make.
This rule is crucial if you want to build wealth. Nobody builds wealth by spending more than they are bringing in. Sure, you might be able to get away with it for a little while. But eventually, reckless spending will catch up to you in a negative way. Making money is important, but keeping the money you make (so that you can eventually invest your money and grow it) is CRUCIAL to your financial success.
I’m confident that if you implement all 6 of these money rules into your life, you will build a massive amount of wealth given enough time.
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Want to keep learning? Check out some of my other blog posts:
As Always: Buy things that pay you to own them.
-Josh
Blog Post: #005
