10 Wealthy Rules to Live By
- Don’t underestimate the importance of planning, keeping your cash from being tied up and seeking the tax advantages of every money matter you run into.
- Just try to accomplish three things every day and when you’re trying something new, don’t expect perfection the first time.
- If nothing else, remember to have fun as you go through life.
As some of you know, I enjoy the Transporter movie series starring Frank Martin (played by Jason Statham). Remember how he drives his car around transporting people and says in his distinctive British accent, “I’ve just got three rules”?
- Once the deal’s made, it is final.
- No names.
- Never open the package.
Martin’s rules make it easy to understand how he lives his life. I try to do the same thing with my own life, and hopefully you’ll find my rules helpful, especially when it comes to wealth management:
- If you fail to plan, you plan to fail. Planning lets us get started on the right track, so when we need to change the plan as life evolves, the foundation is already in place.
- Use OPM (other people’s money) whenever possible. Don’t tie up your own cash when financing major purchases or investments (e.g., take out a home mortgage or a business loan).
- Prioritize by taxation. When it comes to important money matters, look for the tax deductible option first, then the tax-deferred option, then the tax-free option—very important for accumulating wealth.
- What we don’t understand doesn’t exist. Quite simply, if you can’t understand a financial opportunity or strategy, don’t act on it. Move on. Better safe than sorry.
- The Rule of 72 advantage. The Rule of 72 is a shorthand way of calculating how long it will take an investment (or loan) to double in value at a given rate of return. For instance, it takes 12 years to double your money at a 6-percent compound rate of return (72 divided by 6). Compound interest is extremely powerful for growing your assets over time.
- Successful investing is about time and discipline. How much time do you have for something and what’s the discipline being employed to execute it?
- Follow the 80 Percent Rule when starting something new. As I mentioned in a recent post, whenever you start something new, you can’t expect to do it perfectly the first time. Shoot for 80 percent, and then keep improving that rate over time.
- No decision is a decision. Throughout life we have to make important decisions. If you can’t commit to a decision, you’re not procrastinating or mulling it over—you’re essentially saying no.
- Accomplish 3 things each day. It may not sound like much, but if you can accomplish just three things every day, your productivity accumulates over time and you’ll find many positive things happening to you as you get clearer about your direction.
- Have fun! It’s really important to have fun as you go through life. Keep it easy for people. Have fun when you’re doing everything. It just makes life go down a little bit easier.
Until next time, enjoy.
Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country. Instead of being afraid of change, Gary is always looking at how technology will affect clients and bringing the best of it into the practice. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
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