Money follows rules that govern how capital is created and flows, and knowing them shifts how you earn, spend, save and invest. Money does not care about your self-esteem, your religion, where you live or what your goals are. You either have it or you do not, and you are either making it or spending it.
What many people miss is that money behaves like a force in society. These 15 rules, plus a bonus, explain how it works.
Watch the full video here, or skip to the breakdown below.
The 15 rules at a glance
- Money doesn’t change people. It shows who they really are (0:41)
- Never spend money before you earn it (1:40)
- Don’t chase money. Be a money magnet (2:38)
- Invest time before you invest money (3:38)
- The more you learn, the more you earn (4:49)
- Never be a slave to money. Become the master (6:19)
- You have to seduce money. Don’t let money seduce you (7:10)
- Money doesn’t grow on trees unless you plant the right seeds (7:53)
- Don’t let money get bored (9:01)
- Spend less than you earn (9:59)
- Money is your personal army. It should go out and bring back prisoners (10:50)
- The right partner can make you rich. The wrong partner can make you poor (11:47)
- Money will solve all of your money problems
- There are people who have money and people who are wealthy (13:32)
- Your rewards in life will always be in exact proportion to your contribution (14:25)
- Bonus: Would you rather be tired or broke?
1. Money doesn’t change people. It shows who they really are
Think of money as a magnifying glass. Whatever traits lay hidden are now ten times bigger and visible to everyone. Someone unpleasant before getting rich is now unpleasant with a larger bank account. A humble, generous person stays that way after making it.
Money also acts like gasoline on a fire. It lets you move quicker, learn faster and reach more tools and resources. It strips away the vulnerability of being poor and gives you a platform to be exactly who you are.
2. Never spend money before you earn it
Keep spending money you have not earned yet and you will stay poor. This is the main reason most people never escape poverty: they borrow to buy things they do not need or cannot afford.
Some blame media that markets aggressively to vulnerable people. Others blame a lack of education. The script says it is personal. When you max out a credit card for a new TV, you know the purchase is not smart, even if the TV is. The motive is vanity, and you are sacrificing your future for your present. People who overspend are playing catch-up with the present, so there is never time to move into the future.
3. Don’t chase money. Be a money magnet
This sounds cheesy, but it goes deeper than positive thoughts. It has two halves. First, if you are always running after money you are stuck on a hamster wheel. You are the coyote and money is the Road Runner, and nobody likes being chased.
Second, you attract money by becoming valuable. The more valuable you are, the more people want you to solve their problems, and they will gladly bring money to you. This is the difference between consumers of value and creators of value: one spends money and the other receives it.
4. Invest time before you invest money
The common belief is that you need money to make money. What people never learned is that time is more valuable, and early on you have plenty of it that you are probably wasting.
It takes on average seven years to build a business, ten if you are not as sharp and five if you start with some money. Time is still required, and the sooner you start the sooner you arrive. You need to get your hands dirty in the field, real or digital. Cannot find two hours a day for a side project? The case made here is that you are not poor for lack of money. You are investing your time poorly.
5. The more you learn, the more you earn
The learning that counts is knowledge that can be turned into value for you and for others. Nobody cares if you know every Pokemon or the first 38 digits of Pi. Life is not a trivia show, and knowledge that cannot be manifested is trivia.
Focus your learning on building a ladder out of mediocrity. If your parents built one for you, use it. If others have documented how ladders are built, study them. We are dealt different hands and some holes are deeper than others, but the way out is almost always the same.
Knowledge that cannot become value is only trivia.
6. Never be a slave to money. Become the master
Debt is an amazing tool. Some use it to set themselves free, and others lose even the freedom they had. Bad debt is the latest form of slavery: the moment you borrow, your life belongs to the creditors, and you trade hours of your life so the proceeds go to someone else.
Money floats in between. You either own money or money owns you, so your goal is to be the master.
7. You have to seduce money. Don’t let money seduce you
Money is slippery. A knife is a loyal servant in the hands of a sushi chef and dangerous in the hands of a child. Money shows you everything you can do with it, and it is easy to fall for its charms.
This is how it escapes. The moment you give in, you open the door and money slips away, as people who won incredible fortunes and ended up broke a few years later have shown.
8. Money doesn’t grow on trees unless you plant the right seeds
People only know the first half of the rule. Anyone who has planted an apple tree knows the work: find the seed and the right soil, water it, nurture it, protect it, and give it time and sunshine before you eat apples. Building a fortune works the same way.
In the real world, these trees are investments or businesses. The seeds are ideas, and the best part is that ideas are free. You are the gardener. The sooner you plant and nurture, the sooner you eat the apples.
9. Don’t let money get bored
Money hates being bored, so it either dies off or flees to someone who knows what to do with it. Like a mako shark, it has to keep swimming to stay alive. It loses value when it sits and grows when it is used.
Put $50,000 under your bed for ten years and, because of inflation, rising property prices and a higher cost of living, it would be worth roughly $30,000 in real value. Keep enough aside for a rainy day, protected from inflation, and use the rest to fortify your castle. Build things and grow things.
10. Spend less than you earn
It sounds obvious, yet many people break it. A large group credit-cards everything, and an even larger group spends everything they earn. The first are already drowning and the second are one wave away. Failing to control spending is why life does not seem to move forward.
These people are seduced by money, enslaved by bad debt, and let pride and emotion drive spending. All debt is paid back with interest, so if you cannot afford something now, you cannot afford it with interest on top. If budgeting feels cheap, that is fine as long as you obey the rule. You can spend less or earn more.
11. Money is your personal army. It should go out and bring back prisoners
Billionaire investor Kevin O’Leary pushed this metaphor, and the team has adopted it. Every dollar is a soldier you send out each morning. Some will die and some will conquer. Your goal is for more of them to come home with prisoners.
Think of your freedom soldiers and you become more careful when someone asks to borrow some. Each time you hand over money, you risk the person losing your soldiers for good.
12. The right partner can make you rich. The wrong partner can make you poor
You do not see how expensive the wrong person is until you are with one. They are close enough to alter your fate, building wings for your growth or chaining you to the ground.
You need a partner who is strong, competent and shares your goals and desires, because the road has ups, downs and hardships, and only someone fully committed can push through. Find the right person and life becomes a marvellous adventure.
13. Money will solve all of your money problems
Nothing less, nothing more. People expect money to solve every problem, but it solves most and not all. Money is a universal key that opens money-related locks: a roof, dinner, school supplies.
But having a key does not get you through a brick wall with no door in sight. When you are poor, all you see are money problems. Once you overcome them, you find other kinds where money has little or no power.
14. There are people who have money and people who are wealthy
For the team, wealth is the point where your desires and expectations match your reality. Wealth is the winning combination of all pillars: emotional, intellectual, physical, relationships and finance, like collecting all the Infinity Stones of a successful life. Some people are lucky to get one or two of the five.
The pillars are connected. Winning at relationships is hard when you are emotionally damaged, and hard to build financially if your relationship is poor. Hence some rich people are unhappy and unfulfilled: they forgot the other pillars.
15. Your rewards in life will always be in exact proportion to your contribution
Ever wondered why you earn what you earn? This is the reason. The bigger the contribution, the bigger the reward. Serve ten people and your reward will be smaller than someone serving a million. It applies to the poorest and the richest person alike and is the foundation of value.
To increase your rewards, increase your contribution. You can serve more people, improve the quality of your service or find new ways to contribute. Write these three things down and go through them every day until you work out how to apply them, and you should see a jump in rewards.
Bonus: Would you rather be tired or broke?
The choice is yours. The script says every person can achieve financial success if they choose to stop being lazy. Laziness is not the opposite of hard work. If it were, the richest people would be coal miners and roofers working in July.
Laziness is a mindset: choosing the convenient thing over the hard one, such as reality TV over a self-help book, or sleeping two hours less than your friends to work on your project. Not being lazy means sacrificing comfort now for the potential of the future, and doing today what others will not so you can live the way they cannot.
Put the rules to work
Any of these 15 rules is strong enough to build wealth for people who not only know them but use them. Several of them come back to the same ideas: spend less than you earn, learn what turns into value and contribute more.
Pick the rule you break most often and start there.
FAQ
What are the basic rules of money?
Never spend money before you earn it, spend less than you earn, keep your money working instead of idle, and learn skills that turn into value. Your rewards also match your contribution.
Why does money lose value when it sits idle?
Inflation and rising prices erode it. The script’s example is $50,000 under a bed for ten years being worth roughly $30,000 in real value.
What does it mean to be a money magnet?
It means becoming valuable enough that money comes to you because of your skills, instead of chasing it. People will bring money to someone who can solve their problems.
Can money solve every problem?
No. It solves money problems, but once those are solved you find other problems where money has little or no power.
How do you increase your income according to these rules?
Increase your contribution by serving more people, improving the quality of your service or finding new ways to contribute. Rewards rise in proportion to contribution.
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