6 Money Rules That Helped Me Start Building Real Wealth

Do you know why it’s so hard for people to build true wealth?

Because many people think wealth is all about one think:

Making money.

But in truth, it’s about three:

• Earning.

• Spending.

• Investing.

And this is where so many are going wrong when it comes to building wealth and achieving financial freedom.

So, I’ve compiled a list of my top 6 money rules that I used to help me escape the rat race.

Disposable Income is Everything.

Disposable income = your monthly income — your monthly expenses.

This number is more important than how much you’re earning.

If you’re earning $8,000, but living paycheck to paycheck…

There’s no way you’ll be able to build wealth compared to someone who earns $6,000 but only spends $5,000 per month.

Simple maths.

If your aim is to build wealth, make that number as big as you can.

Pay Yourself First.

This may not make a whole lot of sense, but let me explain.

Money is a psychological game.

For most, if you see money in your bank account that you’re able to spend, you’re going to want to spend it. It gives you joy when you buy something you like.

• A new pair of shoes.

• A new piece of jewellery.

• A cool light or gadget you saw on TikTok.

That’s fine, but what you find is that you’ll have no money left over to invest for your future.

This is why you must “pay yourself first”. What this means is, setting aside part of your income to go towards your future (saving, investing etc.) as soon as you’re paid.

This way, you can automatically set aside some capital, and you’re free to spend the rest during the month as you wish.

The 100 Day Rule.

This is a spending rule I used to determine whether it was worth buying something or not.

It only applies to things you don’t need, so disregard the likes of rent, groceries, phone bill etc for this.

If you want to buy something, like the three mentioned above:

• A new pair of shoes.

• A new piece of jewellery.

• A viral TikTok product.

Use the 100 day rule.

You must ask yourself this question:

“If I buy this, will it still have the same value to me on day 100 as it will on day 1?”

In other words:

• Will I still be wearing these shoes in 100 days time?

• Will I still be wearing this piece of jewellery in 100 days time?

• Will I still be using this light in 100 days time?

If the answer is yes, you’re good to spend.

If the answer is no, you might want to rethink buying it.

Don’t Look At Your Investments Too Often.

Like most things to do with money, investing is a lot more psychological and emotional than you think.

I’ve paid the price on this one before, but now I’m fortunate to help others through my experience & mistakes.

Don’t spend any more time than you need investing your money.

Real money ISN’T made through:

• Timing the market.

• Panic selling when you’ve lost some value.

• Panic buying when you’re missing out on a good investment.

Real money IS made through:

• Being patient.

• Investing regularly over time.

• Not getting emotionally invested.

If you know what you’re investing in (you should), you won’t have to worry about short term price fluctuations.

Buy. Hold. Buy some more. Hold some more. Repeat.

Wealth Is All About Momentum.

This is a fairly extreme example, but let me explain.

Say you’re trying to achieve a goal of $1 million dollars.

Depending on how much money you have to start, you’re going to need to get a different return on your money to achieve it.

• If you start with $500k, you need to 2x your money.

• If you start with $100k, you need to 10x your money.

• If you start with $10k, you need to 100x your money.

Emphasise the importance of momentum, and knowing that the more money you have, the easier it is to make more.

So, if you have some success with investing or building wealth, don’t stop.

Continue to leverage what you have, and continue to grow your portfolio.

Compound interest will drive your gains to levels you may never have thought was possible.

Acknowledge this momentum. But, although this momentum can work in your favour, it can also work against you if you aren’t careful…

Avoid High Interest Debt At All Costs.

This almost has the complete opposite effect to the previous point.

Whilst the momentum of gains should be in your favour, consider what might be compounding against you.

Debt. More specifically, high interest debt.

Debts like your mortgage etc. are pretty unavoidable. But, there are certain debts that many get into, that aren’t essential.

And are eating into your wealth. Every single day.

Why?

As high interest debt looms, the interest begins to compound over time as the debt isn’t being paid back.

What this means is that over time, you’re having to pay more and more back to the lender.

This lender is generating their very own financial momentum at your expense.

Plug the hole.

Even the smallest of holes can sink the grandest of ships.

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