If you want to change your financial life then you are going to want to read this article. It’s that simple.
What I want to share with you today is a proven powerful money rule which is the first step to building wealth. Now before we get going I do want to say this money rule is so simple in theory that many people will simply ignore it. But I want to caution you because this is the starting point to changing your financial life and setting you on the path to building lasting wealth.
Simple Money Rule Difficult To Apply
Let’s begin at the beginning and what I mean is that everything has a beginning. This money rule is the first step of many steps. Many steps are required to follow but it all begins here.
I’m reminded of the author John Maxell telling a story about a person interviewing him, the interviewer made a statement that his writing was so simple. John in his wisdom responded simple principles yes but hard to apply.
I respond similarly to this money rule as John Maxwell did about his books. We are looking at a very simple theory because all the challenge lies within the application.
Decide to Look Wealthy Or Be Wealthy
Without a doubt, there are many people living lives in which looking wealthy and impressing others with the appearance of wealth is their main goal. Even though they know ( at least I hope they know ) they are not building wealth but building a debt hole that will eventually bury them.
If your incentive is to build wealth then this first step money rule is the one for you to take. So with that in mind are you ready?
Live Within Your Means
If you won’t believe me possibly you’ll listen to Charlie Munger. Charlie Munger has since passed away but has built a legacy and reputation as an extremely successful investor among other things.
Charlie Munger understood the value of a dollar and once said the first step to wealth accumulation was learning to live within one’s means.
- Charlie Munger once said “Live within your income and save so that you can invest”
Now you know why I said this money rule sounds simple, and in theory it is simple. Charlie Munger was a man who appreciated simplicity. And if you wish to build wealth this is where it begins. Simply with this first step money rule.
But let’s admit this is an easy-to-say hard-to-do rule. With 60% or more Americans living paycheck-to-paycheck and consumer credit card debt hitting all-time high balances. People are certainly living above their means which is exactly the opposite of Charle’s advice for all of us.
I recall hearing this simple theory so many years ago and I just ignored it for various reasons. As I write this all I can think of is my pride and stupidity. But when my financial life crashed and burned I decided what have I got to lose.
I would like to challenge you, if you want to fix your financial story and build wealth then I suggest along with countless others who have built and are building wealth to begin at the beginning with this proven powerful first step money rule in building wealth “Live within your means.”