I have 8 money rules that are proven and time-tested. I’ve seen them play out over and over again in my 30 years of being a money and mindset coach.
They’ve worked for me, thousands of my clients, and hundreds of thousands of people around the world.
These are rules you don’t want to break. In fact, you can’t afford to break them. If you do, you’ll stay broke.
Over here, however, we want to live life rich. Commit to the following 8 rules and you’ll begin to live that life you’ve always dreamed of.
1. The best time to invest is now.
Don’t wait to invest. Even if you have to say it to yourself 50 times every morning, never forget that the best time to invest truly is now.
Procrastination is the killer of your profit, investments, bank accounts, life, relationships, and more. Therefore, we need to be investing in our finances, personal growth and development, relationships, and health right now.
Small actions over time lead to great change. So create a strategy that will help you start investing today.
2. Never let your emotions play a role.
We listen to people everywhere we go. This could actually be harming us, though. We need to stop taking advice from broke unhappy people. Who and what you surround yourself with matters. Find people that won’t feed you emotional statements not based in truth.
Additionally, set disciplines for investing. Figure out why you’re doing it and the purpose behind it. Then, when emotions run high or unexpected things happen, you’ll have something to fall back on.
Emotions can be the killer of all your profit in your business. We make dumb decisions when fear drives our behavior. So never let your emotions play a role.
3. Stop trying to get rich quick.
The wealthiest of the wealthy who I know have one thing in common: their habits. They are consistent in making good decisions. They don’t try to get rich quick. They know that an investment is like a seed and if you don’t give it enough time, it won’t grow.
Stick to the habits of product and service. Always ask what you’re doing to add value to the marketplace. Otherwise, you’ll follow get-rich-quick schemes that will end up keeping you broke.
4. Never chase the trend.
Instead of chasing the trend, predict the trend. Get around a group of thinking partners who will help you ask what’s next and what you see coming. Look into the circumstances around your product, service, or industry. Ask what people want and need and where you see industries and legislation leading.
5. Do your research before investing.
Research is based on asking good questions. However, before investing you have to know which questions to ask. Here are some examples:
What will this cost me?
What’s the expected return?
What time frame am I looking at?
How do I get paid?
6. Keep track of your balance sheet.
Keeping track will help you know if you’re growing forward from last year to this year. You need to know how much money you put in and how much ROI you actually got.
It’s not just your investments you should look at either. You need to see if you’re moving forward towards where you want to be in every area of life.
7. Never borrow money to invest.
Investments are about helping your money grow forward into something. Therefore, you don’t want to borrow money to try and make more.
This really applies to things that haven’t been thought through from a risk standpoint. Borrowing money as seed money for your business makes sense as long as you have a business plan for how long it’ll take you to pay it back. The key is remembering that there’s a cost to borrowing money: interest.
Just don’t follow a hot stock tip. Think it through before you invest in something you will have to pay back.
8. The Rule of 72.
The Rule of 72 is the investing rule. You take 72 and divide it by the interest rate or return that you’re receiving on your investment. For example, if you make 7% on your money, divide that into 72 to figure out that every 10.29 years your money will double.
Make this rule a benchmark when working with your financial advisor. Every time you make a financial decision about where to invest, ask about the risk vs. reward according to the Rule of 72.
If you want to learn more about the rules you must follow to live life rich, check out Episode 060: Money Rules to Get Rich or Stay Broke.