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10 Money Rules That Never Go Out of Style

While some fads come and go, there are some timeless things that always ring true. Money has been around in one form or another for ages; it only makes sense that certain truths have been discovered in wise ways to make this asset's best use.

Here are ten rules that will never steer you wrong:

Practice intelligent risk management.

Unless you have a large income and very frugal ways, you're never going to amass a fortune by putting all your money in a savings account. We want you to understand your investments, not feel like you're in the dark about having enough cash when you need it.

Having a system where you segregate your investments in separate buckets will help you stay invested when the market turns against you. We call this the Stage 2 Investment Strategy.

  • That 0.31% interest might be about as safe you can get; however, higher-risk investments are preferable over the long term to low-interest income-producing investments. In today's terms, think stocks for long-term investments, rather than low-risk bonds or savings accounts.

Have an emergency fund.

Without some savings to handle the inevitable hiccups that happen to everyone, your long-term plans can jeopardize your future. When a significant financial challenge comes into your life with an emergency fund, you can avoid having to dip into your retirement to pay your bills.


Putting all your eggs in one basket can be catastrophic if something happens to that basket. A significant financial loss to your portfolio can take ten years or more to recover. Diversifying your investments limits the amount of your losses.

Be patient

Many of the most successful investors spend most of their time sitting, not buying and selling stocks. When you find a great stock to purchase, it can be several years before the price matches the value. Many investors have sold way too soon, only to discover they should have waited.

Understand the rule of 72's. This formula tells you how long it takes for your money to double. It always looks slow and tedious in the beginning. If you save $300 per month for twenty years, the numbers start to become impressive.

  • Amassing a fortune takes time, but that $300 a month you keep socking away will add up to something significant if you'll give it time.
Avoid trying to time the market

Timing the market is an exercise in futility. Smarter people have used supercomputers and failed miserably. The best time to invest is now. Good investments may be harder to find than at other times, but now is always the best time.

If you have a big chunk of money to invest, think about using dollar-cost averaging to periodically invest your money.

Be cheap

When you're buying managed investments like mutual funds, take a look at the management fee. Are you getting your money's worth? Be sure the management team is worth the extra money.

Fee's matter. That's why we often recommend either low-cost mutual funds, index funds, or direct investments in stocks and bonds.

Buy low

While it can be lucrative to pay what something is worth and have the value grow in time, it's even more lucrative to pay much less than something is worth. Search for investments that you can get at a bargain price. This assumes that everything else is in order as well. A bad company is a bad investment at any price.

Do something

Wishing and thinking require as much energy as making and executing a plan. Instead of daydreaming all the time, just do something. Even a little financial planning and some minimal but consistent action make a big difference over time.

Debt is usually a bad thing

No one wishes they had more debt. While the debt required to buy a house is acceptable within reason, any other debt should be examined closely.

High-cost credit cards ruin your chance for investment success. Think about paying off your high-interest cards and then take the savings and put it in your investments for retirement.

Do everything (legal) you can to avoid taxes

Minimizing your taxes is work that's well worth the effort. Everyone should pay as little in taxes as possible. Don't just give away your money unless it's charitable, and the IRS doesn't count as a charity.

Bonus – manage your job

Make sure you stay in the job for the right amount of time. Pay attention to what your job would pay other places and make sure you are paid a competitive wage. Know when it's time to move to a new position and when it's time to stay where you are.

Every game has rules; money is no different. Which rules have you been following? Which have you been violating? Follow these ten rules, and you'll be well on your way to mastering money.

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Topics: retirement, Investments, retirement plan, money rules

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