Rules Of Wealth.

In a nutshell, there are only 4 rules to follow in wealth building. And if you can follow these 4 rules all the time, then eventually you will become wealthy.

Rule # 1: Spend Less Than You Earn.

A wealthy person must have money. The money could be in the form of cash or locked in assets such as properties. After all, you would not consider a man as wealthy if he does not have money, right?

If you spend more than you earn, that will leave you without any money, right? Therefore, to become wealthy you must satisfy rule number 1 which is “Spend Less Than You Earn”.

Rule # 2: Say No To Debt.

Debt is like a disease. A small debt, if left untreated can turn into huge debt. Before you realize it, you are already having difficulty servicing your debt.

Say NO to debt. The only exception is Good Debt whereby you can reasonably expect to increase your net worth. All the other debts are harmful to your financial health.

If you are already in debt, then find a way to get out of it as soon as possible.

Rule # 3: Save, Save, Save.

If you spend less than you earn, then you will have surplus money.

You will have peace of mind knowing you have an emergency fund that you can use in case of emergency. You can channel your energy to focus on other areas to increase your wealth instead of worrying if you’d be able to make ends meet.

When you have an emergency and need short term fund, you do not need to borrow from external parties who charges you high interest rates.

You can take advantage of opportunities when they arise. This is closely associated with rule number 4.

Rule # 4: Invest wisely.

Investments can help to grow your net worth. Use your money wisely to work harder for you.

Invest in your house. All wealthy people hold part of their wealth in some form of properties. As a rule of thumb you need to own the house you stay. If you are renting from your landlord, then you are building wealth for your landlord, not yourself.