The money rules we inherit can bankrupt us.
My friend Dakota had a father who chose to smoke crack instead of raise him and his brother. Then later as a young adult he watched his mother walk down the street as a zombie. She didn’t recognize her own son.
Moments later she died from an overdose.
Two parents, one addiction. Make money then buy crack.
They were the financial rules he grew up with. This led him to be overweight, have severe social anxiety, and live in a shoebox motorhome.
Society told him he was a victim. They felt sorry for him. Dakota didn’t accept his circumstances. Instead, he took personal responsibility and created new financial rules.
In his mid-20s, he’s made more money than most of us make in a lifetime. Not because he’s smart, but because he chose new money rules to follow.
Each of us has the same opportunity. Here are a few helpful financial rules you can choose to adopt.
If you don’t have money, do this
Maybe you’re starting from nothing.
You lost it all. Or you never had any money to begin with. That’s okay. I’m not here to shame anyone. If you don’t have money you still have time and energy to invest until you make some cash to splash.
Thinking you have nothing is a scarcity mindset. It’s a pity party that leads nowhere. Use what you do have to escape the situation.
A business makes you more than a salary
I always got taught to go to university and get a good job.
The truth is most time-wealthy people don’t work jobs. No. They are business owners. Business isn’t easy. But anyone can learn it.
The safest way is to start with a side hustle. Take a load off. See if you can make some money online. If so, the transition to an online business is straightforward.
But you need the belief first and that won’t come from hoping or reading more business books. It’ll come from small financial results that are generated by execution.
Learn how to own a business because a salary is unlikely to make you rich.
And even if you get a CEO job for some virtue-signaling corporation, you’ll have hardly any time (by design).
Self-education makes you more than a stock market index fund
“Buy index funds” is the most popular financial rule on social media.
You’ll get a slow and steady rate of return. Maybe you’ll get rich by age 65 if you’re lucky — assuming a new world order isn’t established and rich western countries like America keep their dollar dominance.
But slow growth is painful.
Self-education gives you skills that are a license to print money now. The investment is money but the ROI is far greater. It’s not hyperbole to say a few new online skills could make you 6 or 7 figures in the next year.
Improve your skills to grow your money.
Bank failures are always your problem
The misdirection of bank failures angers me.
People think it’s not their problem, but it is. When a bank fails (like SVB) the central bank in conjunction with the government creates money out of thin air.
They literally add a few extra zeroes to their internal bank account.
This results in debt levels going up, and creates more price rises in the economy as a result of inflation.
- The price rises act as a hidden tax.
- True price discovery of basic things becomes much harder.
- And investment returns look far more impressive than they really are, causing normal people to think they got richer when they didn’t.
See what I mean?
All of that results from a bank failure and it affects us all. Don’t think you’re sweet when Wall Street behaves badly. We all pay for it somehow.
Money isn’t free.
Never trust what a central bank says
This isn’t a conspiracy so hold ya horses.
Central banks control interest rates. They have ongoing commentary with citizens on what they’re going to do with interest rates.
Last year a good friend of mine read the press release of the Australian central bank. They said interest rates would stay low for a long time. So he went and bought an investment property.
Rates have gone up so fast since then that he’s about to go bankrupt.
Central bankers are glorified politicians. They tell you what you want to hear so you’ll remain calm. They don’t actually know anything.
Their data is sketchy at best. And they always lag a long way behind what the real economy is actually doing. Ignore these clowns in pinstripe suits.
The #1 rule to make your bank account grow faster
Spend less.
The business model of consumerism is to make you spend more. Most of the problems you think you’re solving by spending money are illusions.
Marketing has to make you think there’s a painful problem before it can extract money from your wallet. Most of your money problems get solved when you’re not spending like a drunken monkey in a Hangover movie.
Get good at crushing your money beliefs.
“I have to have this vacuum cleaner or the dust in my house will kill my daughter.” Will it? Or is this a lie you tell yourself?
Don’t sacrifice personal freedom for money
Money can form a prison around your life if you let it.
A colleague I once worked with lives in a nice suburb. He has a fancy Range Rover and all four kids go to private school. His wife spends the weekends hosting elaborate dinner parties.
They look happy as f*ck on the outside.
On the inside it’s a disaster.
- One step away from divorce.
- Mental health issues.
- Spoilt kids who don’t appreciate their expensive education.
- A mortgage they can’t afford due to record-high interest rates.
The mantra he told me he goes to work with is “I love my job, I love my job, I love my job.” This is no joke. It’s what financial hell looks like. And we do it to ourselves p-e-o-p-l-e.
Your freedom should be your number one priority. If you don’t have personal freedom what do you have? Nothing. Nudda.
Let money buy freedom (aka time). Not the other way around.
Don’t ignore crypto forever
Yep, it’s all a scam.
That’s what you think if you’re naive, the same way critics were of the internet. Crypto isn’t going anywhere. It’s already the best-performing asset again this year. You can’t make this stuff up every year since 2008.
Money will be digitized. Value exchange will happen on blockchains.
It’s not a question of if but a matter of when this is mainstream. No one is saying to bet the house on it. But at least have 1% of your money exposed to it to add some growth to your investment portfolio.
Have a second/third income or die trying
This is the most important rule: Don’t ever rely on one income.
(Read that again.)
Multiple income streams are how you protect yourself from the bat viruses of recessions and dirty layoffs. Investments can make extra income. Side hustles can too.
Or you can just get a second employer on the side and not tell the first employer lol.
Just don’t go to work each day like a blind monkey thinking you’re safe or believing the “we are family” HR crap.
They. Will. Fire. You. If. Times. Get. Tough.
Never forget that. I’m sure you know someone who’s experienced that reality. I certainly got my skinny ass fired working for one of these good guy families out to change the world with rainbows and mission statements. They’re full of it.
It’s a con job.
The internet is the great leveler of incomes. Use it to collect more cash to stash.
Debt should only be used for this
Most people misuse debt.
Cars, TVs, furniture, and iPhones all go down in value as soon as you buy them. Using debt to acquire these junk food assets is wrong.
The rule is this: only use debt to buy assets that go up.
That way you get access to the leverage debt enables plus the appreciation in price of the asset. Those two things over a long enough time horizon will help you get wealthy and retire early.
Real assets instead of looking rich. Always.
This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.
