10 Rules Wealth Creation

After I had decided to become wealthy, I devoured every investing and wealth creation book I could get my hands on. Guzzling page after page and only stopping for fleeting moments of inspiration, I searched furiously for the answer to my question:

What’s the secret to getting rich?

I was looking for a shortcut, the easiest and quickest way to be surrounded by caviar, supercars, and yachts. But what I discovered – which was equal parts devastating and relieving – is that there are no secrets. However, there are a set of principles that if followed, will allow anyone to become financially free or become a millionaire (if they choose).

The following principles are not my own, but rules I live by. It’s timeless knowledge I’ve collected from the world’s wealthiest people and yours to implement and benefit from if you wish.

1. Decide to Become Wealthy

The beautiful thing about wealth is that becoming wealthy is a choice. Anyone can become rich regardless of their gender, race, intelligence, background or current circumstances. All it takes is to decide to become wealthy no matter what.

“I’m in! Show me the money!!!”

Not so fast. Really think about it.

This is a no-going-back decision you’ll have to live with for the rest of your life. You’ll have to be ruthlessly committed if you want to reach your goal. That means sacrifices, hard decisions and lifestyle choices that aren’t always fun.

But becoming wealthy is possible and within your capabilities. And if you’re reading this, you already have access to all the tools and resources you need.

2. Spend Less Than You Earn

If you cannot live within your means, you’ll never become wealthy. You have to be able to save cash so that you can invest and grow your wealth. Even if you marry into money, receive a large inheritance, or are lucky enough to win the lottery, you’ll soon be broke if you never spend less than you earn.

This is such simple advice, and you’ve probably heard it a million times before, but it’s incredible how many people rely on borrowed money to get by. Often, it’s not a case of overspending to make ends meet, but overindulgence and borrowing to maintain a lifestyle you can’t afford.

You should know how much you earn each month and what your outgoings are to ensure there’s always a surplus, and the easiest way of doing that is to…

3. Keep Your Mind On Your Money

Monthly budgeting and expenses tracking should be common practice. If you want to have money, you need to understand the flow of it in and out of your life.

You should know what it takes to maintain your current lifestyle. If you don’t know, keep a money diary and record every transaction at the end of each day. After three months, you’ll have accurate data for your spending habits, and you’ll then be able to plan and readjust as necessary.

You should also know your net worth down to the penny at any given time. Tad extreme? Yes, but once you know your net worth you can commit to increasing it each time you get paid.

4. Pay Yourself First

I never use to have enough money to save. I blamed my low salary and the constant stream of “can’t-miss” social events. This is how my old spending pattern looked:

Bills > Leisure > Savings

But after I implemented the pay yourself first principle, I somehow magically managed to find enough extra cash to stash aside each month. Here’s what my spending pattern now looks like:

Savings > Bills > Leisure

If you aspire to become wealthy, you must make your saving and investing goals a priority. That means paying yourself even before you pay your mortgage or other financial commitments.

Setting up direct debits to your savings or investing accounts is the easiest way to pay yourself first and will ensure you don’t “forget”. If you practice this technique, it’s only a matter of time before you achieve your wealth goals.

5. Build an Emergency Fund

Sometimes life throws you a curveball – you lose your job, get divorced, suffer ill health, or you have an accident of some sort. People that aren’t financially secure get wiped out during such times.

And as long as you’re breathing, you’re going to be faced with challenges. The difference between the financially savvy that stay afloat during times of adversity and those that drown, is that the former wise up to the game early on and have savings to cope with the challenges.

“The same wind blows on us all. Blaming the wind or wishing for a better wind is pointless. Learn to set a better sail.” – Jim Rohn

Be prepared for the storms of life by having at least six months of living expenses stored away in a savings account.

6. Invest Don’t Speculate

Learn how to invest in quality assets that pay you. The word investment is used way too liberally, and everything from digital currencies to barrels of whisky are labelled as investments.

However, and investment is only an investment if it pays you. All other “investments” are purely speculating that the asset will be worth more someday than it is now – or in other words, GAMBLING.

And although buying assets that have a high chance of capital growth – London property, for example – may pay off big and be relatively safe bets, it’s still gambling.

If you stick to buying quality assets that produce an income, you can’t go wrong. Legendary value investor, Benjamin Graham, said it best:

“An investment operation is one in which after thorough analysis, promises safety of principal and a satisfactory return.”

7. Be Conscious of Your Spending

I went (a little too much) down the frugality road of wealth-building when I first decided to become rich. Living frugally will accelerate your savings, but if you’re not careful, you can cross the line from optimised spender to miserly penny-pincher pretty quickly.

I’ve found the best way to strike a balance between living for the here and now and a prosperous future is to simply be conscious of my spending. For every purchase, I ask: Do I really want this? Is it going to improve my life or make me happier?

Anything I want, I write on a piece of paper and put the date beside it. If I still want it in three months, then I’ll buy it. This has helped me overcome mindless spending and will help anyone else who’s caught in a cycle of constant upgrading to the latest and greatest.

8. Risk Management and Wising Up to Insurance

Insurance companies wouldn’t exist if the odds weren’t stacked in their favour. There are a lot of needless insurances that serve no real purpose other than to drain your finances.

The golden rule with insurance is to only insure against any loss that you cannot afford to take.

For example; if there was a fire in my house and my home and possessions were completely destroyed, it would be a devastating blow to my finances that I would struggle to recover from. If I bought a new stereo and it broke, I can afford to buy another one. That’s why I have house and contents insurance, but I skip the two years extended warranty for the stereo.

9. There’s Nothing Average About Average Returns

Beating typical returns on the sharemarket is possible, but it’s not easy. For some reason, this seems to stop some people from investing, as they hold out forever waiting for the perfect time to enter the market or to get in early on the next superstar tech stock.

But sometimes it’s wise to accept an average return, especially if you don’t have the time or patience to dedicate to your investing pursuits. By simply investing in an index fund that tracks the market, you’re already ahead of 95% of the population who are only making bare minimum contributions to their pension fund or not investing at all.

There’s no need to chase double-digit returns or to keep jumping to the next hottest investment, as even average returns will lead to above average wealth in the long run.

10. Time is Money

What is money to you? Is it experiences? Possessions? Or perhaps freedom? Power? Status? Or is it merely a means to get by?

Whatever money represents to you, I challenge you to view money as time units. I picked this golden piece of financial advice up from Your Money or Your Life, and it completely altered the value of money for me.

Instead of viewing money as the value of the things it could buy, I now think of the time it provides and how much of my time I would have to work for it.

For example; if my after-tax pay is £500 per week and I spend 40 hours a week at work, an hour of my life is worth £12.50. In other words, I sell an hour of my one and only life to an employer for £12.50. Knowing this, is it worth me paying £12.50 – or trading an hour of my life – for some gadget that only provides fleeting happiness? I think not.

While you can make more money and buy all sorts of consumer crap, you can never buy any more time.


If you apply and live by these ten rules of wealth creation, you will become wealthy. These are tried and tested practices that work for everyone regardless of where you came from, or where you are now.

Pretty soon, your finances will be in good order, and you’ll be on your way to whatever financial goals you’ve set for yourself. But as you become wealthy, remember that being rich and having a rich life, is not just about having money, and it’s important to also be rich in your relationships, your health, and your thoughts.

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