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The Eleven Cardinal Rules of Financial Success

by | Sep 12, 2022 | Money, Personal Finance

Rule #1 — Obsess over acquiring assets like you obsess over small children

Financial success is built on a foundation of financial assets.

If all you own is material possessions and a bunch of horse sh*t liabilities, you’ll feel unnecessary pain that’ll make life 10x harder.

Assets store time for future consumption.

Assets appreciate in value — especially scarce ones like land. Funnel a percentage of your income into buying assets every month — stocks, bonds, crypto, real estate, gold/silver etc.

Worship assets the way a mother loves her child.

Assets are what set you free.

Rule #2 — Learn about passive income or die trying

Trigger warning: earning money while you sleep is a touchy subject.

Why? Most people never figure it out so they get mad as hell if you ever talk about it. Oopsie.

The secret to passive income is it takes some active work up front to set the snowball in motion. But once the snowball of passive income is rolling down the hill, no matter how small it starts, it turns into huge financial momentum.

My favorite passive income source is different from most: digital assets.

These are products you create and sell online. Simple things like books, educational material, checklists, templates, etc. The internet is so large that if you release a digital asset and link to it a lot, it can make you passive income for an extremely long time.

I have eBooks I made years ago that are still paying grocery bills.

Digital assets are easier to create and launch when you realize your life experience has value. There’s one thing in the world you know better than anybody else. Make that the center of your digital asset business.

Learn about passive income and you’ll make money while you sleep that gives you a better night’s rest, knowing your future is being auto-funded.

Rule #3 — Run from lifestyle creep

Making more money quickly turns into a cardinal sin.

When we make more money we think “screw it, I can afford it.” Before you know it the pay rise, additional income stream, or new business revenue goes down the drain. This is lifestyle creep.

Extra money makes you worse with money.

Sometimes it’s laziness. Other times it’s paying for unnecessary convenience. Don’t do it, it’s a trap. Live how you were when you were poor.

If you get an increase in income, put the extra money to work by investing it, so more money makes more money on auto-pilot.

Rule #4 — Treat your life like a venture capitalist

Playing it safe will never produce financial success.

Financial success is the result of taking risks. Not stupid risks where you bet the farm on some random opportunity. I’m talking about small, calculated bets that you’ve done your research on.

As long as one small bet can’t bankrupt you, it’s all gravy baby.

This is what venture capitalists do. I once met a VC in Australia. He invested in hundreds of startups. He told me that initially he thought the type of business or the character of the founder meant a lot. Then many decades in he went back and took another look.

His best investment was in two founders who lied to him about studying at Harvard, smoked a lot of pot, and didn’t have the most innovative business.

He said to me, “Tim, it’s all about having a portfolio of small bets. No one knows which one will win, but the odds are if you take enough small risks a few will pay off big.”

This advice he gave me is the motto of my entire financial life.

If it works for VCs it can work for you. Start taking more risks. Don’t focus on the losses. Don’t let them hold you back. Just expect there will be losses and let the wins overshadow them.

Rule #5 — Spend more time with the business mindset rather than the employee mindset

The employee mindset destroys financial success. Perhaps you’ve heard it in action…

  • “Everyone should get paid more.”
  • “We should raise the minimum wage.”
  • “Our employer should give us more work-life balance.”

These statements are from naive people who dream of Utopia and don’t understand reality. Raising the minimum wage does nothing. Governments will just debase the currency to pay for it.

Also, there are no free handouts. Businesses exist to make profit, not to take care of you. No one is coming to save your financial life.

There’s no such thing as unlimited free cappuccinos.

The business mindset is different. It’s one of personal responsibility. You don’t focus on fairness because humans are tribal creatures who will always compete in life.

Some will get more because they do more. Makes sense. No point following our chimpanzee ancestors. We’re not same-same goldfish who’ll swim all day in their own poop and never play games.

To get closer to financial success, spend more time with people who have the business mindset. They’ll help you find opportunities the employees can’t see because they’re waiting for “free” or good luck that doesn’t exist.

Rule #6 — Buy the Toyota of everything

The point of a quality brand is to charge more money for the perception their product or service is better. It isn’t though.

The Toyota of everything is well made and fairly priced. It doesn’t give you the increase in status or a big head, but it saves you a tonne of money.

Photo by Andrea Leopardi on Unsplash

The less money spent on brands the more money left to buy back your freedom.

Rule #7 — Don’t marry a wolf in sheep’s clothing

One of the biggest investments you can make is who you marry.

For those who get married, it’s important to ensure you pick someone who is good with money. When you get married your net worth goes up because their finances combine with yours.

This can be an easy way to get wealthy.

But if you marry a wolf who is terrible with money, then their bad habits will ruin your financial success.

Doesn’t mean you abandon lovers who are terrible with money. But it does mean you need to fix the problem before things go too far, or you could be both living a life of desperation because of one person’s toxic money beliefs.

Some say to see a marriage counselor before you get married. I say see a financial counselor first. Choice is yours.

Rule #8 — Run a monthly cash flow

Money is like a magician. It plays tricks on you.

The only way to see the tricks money plays is to have a monthly cash flow for your personal life. Create a new spreadsheet. One side is monthly income, the other side is all your expenses. Start there.

If there’s more money going out than coming in, then Houston we gotta problem! Or if there’s not much money left to invest, that’s another red flag.

The only short-term solution is to either reduce expenses or make more money. Number 2 is the smartest.

Rule #9 — Create multiple naughty streams of income (you nasty!)

Mention this one online and you can get blasted. Soz.

The factory worker age taught us that we could only have one employer and a single income. This idea has aged worse than Michael Jackson’s philosophies on life. The internet lets anybody add more income streams.

You can sell the same job skills to multiple different businesses if you want.

Be a naughty man/woman and add a second income stream. Figure out one online platform and see where it takes you.

The second income stream may only start as an extra $20 a month. That’s okay. The point is to let a second income change your psychology. Once the shift happens everything changes.

Rule #10 — Invest in self-learning

Education doesn’t stop at college.

In fact, college for many people drains all their money, leaves them in a lifetime of debt, and gives them information they can google.

Harsh but true.

Self-learning is about investing small amounts of money in online courses to learn new skill sets. These skills can be deployed online to supplement or even replace a salary.

But if you don’t invest in your learning, no one else will — especially not a greedy corporation.

Rule #11 — Send these little internet salespeople out into the world to do the selling for you

Content creation is a new idea for many.

It’s where you use platforms like LinkedIn and Twitter to own a small patch of the internet.

You do it by sharing ideas and stories and attracting people into your life that you could never meet in the real world due to the constraints of time.

Think of each piece of content like a little salesperson working in your favor and selling on your behalf.

Content attracts messages and emails. These are hidden opportunities that can turn into crazy, sexy financial success.

One way to live your life is to ask for permission. Most of the time you’ll get noes and have to deal with the fallout.

By posting content on social media you join the permissionless economy. You stop asking for help, support, or opportunities — and just sit back and see what comes your way.

The morning eventually looks like inboxes full of yes/no decisions to opportunities that lead to unfair financial advantages in life.

Write online to find a different type of financial success.

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