Here are the three important money rules. Understanding these rules will push you toward a financial abundance and also healthy life. These rules are not rocket science but you might not be fully aware of them. Remember, knowing is one thing and practicing it is an altogether different thing. Any knowledge becomes useful once we implement it. So practice these money rules in your life.
Rule#1 Understand Your Money Beliefs
One of the most important money rules is about money beliefs. We all grow up with money myths. We get a lot of them from our parents, relatives, friends, teachers, etc. during my engineering, I can still hear my friend saying, “A penny saved is a penny earned”. Likewise, there were many money myths in our society. These myths, once become our beliefs about money, impact our financial life severely. All these beliefs are stored in our subconscious mind, which anyway controls more than 90% of our life. Most of us have the following ingrained beliefs:
- Money is the root of all evil.
- Money is dirty.
- I don’t deserve to be rich.
- Money is only made by the greedy and dishonest.
- Money corrupts.
- You must not brag about money—never say how much you earn, are worth, or paid for something (unless it is a bargain).
- You can’t have money and be “spiritually pure.”
- Money doesn’t grow on trees.
- You lose your friends if you get rich.
- You have to work too hard to get rich.
- Happiness and money make poor bedfellows.
- The more you have, the more you’ll want.
- It is somehow better to be poor
- I wasn’t meant to be rich—if I were I would have been by now.
- I’m not the right type to be rich.
Have a quick look through. Check which ones you believe. Check which ones strike a chord with you. Now you have to do a bit of that old-fashioned hard work. Write down ones that mean something to you. Add ones that are not in the above list. Now work out why you hold these beliefs. Is it something you have actively thought about, reasoned out, dedicated some research to? Or are they inherited, leftover, picked up along the way?
Get rid of any that you can question and accept is nonsense. Discard any that simply isn’t true. And chuck out any that stand in the way, hold you back, stop you making some money.
What you should be left with is none at all, nothing, a blank sheet. Now you can write new beliefs such as
- Money is OK.
- Wanting money is OK.
- I am going to be wealthy.
- I am prepared to put in the work.
- More money is good.
- Money solves problems
Wealthy people have none of the troublesome money myths we poorer people have. They have purged them or never had them. If we too purge them, we stand a better chance of getting there.
“GET RID OF ANY BELIEFS THAT YOU CAN QUESTION AND ACCEPT ARE NONSENSE.”
Rule#2 Money Begets Money
There is no greater truth than this—money makes money. It likes clustering together. It breeds quietly and quickly. And it prefers to hang out in big groups. Money makes money. The rich get richer; the poor get poorer. That’s life. Yes, it is sad. But it does seem to be a fact. Now we can work hard ourselves and do something about it, or we can sit around moaning and become part of the problem. The choice, as always, is entirely ours.
If you do want to do something about it, then it seems to make sense to me to make a tidy sum and use your money wisely to help the less fortunate than you. Or do whatever with it you so choose.
When you have some money you’ll be astonished at how quickly it can grow. I recommend you understand and learn the concept of compound interest as quickly as possible. Einstein called it the eighth wonder in the world. The best time to harness the power of compound interest is when you start investing at an early age. The time comes when your invested money earns hefty money for you. This is the best way to create passive income and live a life of financial abundance.
Compound interest is vitally important that you know about it and make it a cornerstone in your building of wealth. The general observation is that wealthy people get the idea of compound interest, and the rest of us don’t.
If you spend all you get, then this Rule will never work for you; it’ll never get your money working for you. You have to set aside money for breeding purposes. You need to start a money farm. Your money will breed. You can then reinvest some and spend some—but you can’t spend it all. Look, this stuff isn’t rocket science, but it is amazing how many people simply don’t get it. But you do now. You have been given the best tip I can give you.
- Put some money aside for breeding purposes.
- Skim a little off for spending.
- Reinvest the bulk to build up a good and healthy stock.
- Keep it to yourself.
“MONEY MAKES MONEY. THE RICH GET RICHER.”
Rule#3 Money as a Solution!
Out of three money rules, this is again a very important rule. It’s about the limitation of money. It’s like the famous saying “prevention is better than cure”. It doesn’t protect you from disease—it may buy you better medical care after the event, but it doesn’t protect you. It might buy a better diet, but the rich half of the world has a pretty poor health record despite having all the money to feed itself extremely well so that doesn’t necessarily go hand in hand. The more you see money as a solution, the greater the chance that you are missing the point entirely. Money doesn’t do anything. Other than health, this is applicable to several other important aspects of life.
You might be thinking, “If only I had X amount, I could fix this problem in my life.” You’ll find, money would throw up a lot more problems in its wake. Money will not make you happier, thinner, or more popular with decent people. Money does not deliver lasting, meaningful peace of mind. There are plenty of rich, fat, unhappy people with no real friends. Remember, we need to find the cure to our problems first and then find a way of funding that cure. Money isn’t, and never will be, the cure. It is the oil that greases the wheels. It isn’t the engine. (Inspired from ‘The Rules of Money: How to Make It and How to Hold on to It’ by Richard Templar)
“IT MAY BUY YOU BETTER MEDICAL CARE AFTER THE EVENT, BUT IT DOESN’T PROTECT YOU.”