5 Money Rules To Follow For Life


Whether you’re playing chess, checkers or the game of life, there are always rules to follow. Those who know the rules almost always see more success than those who don’t, which means that mastering the rules is the quickest hack to getting the results you want. Sadly, when it comes to money, most people haven’t a clue what the rules to wealth are and as such will find themselves living in financial mediocrity forever. Fortunately, you don’t have to live in the dark any longer because I’m here to share with you 5 money rules to follow for life that will have your finances reaching new heights in no time. Let’s get into it!


Money Rule #1: Never cheap out on education

For most people, the thought of learning is about as appealing as rubbing their grandmother’s feet and while this is unfortunate, both this sentiment towards reading and rubbing some crusty old feet, education truly is the key to unlocking financial prosperity in your life. But, why do so many people have such a resentment for learning? If you ask me, this dislike for education stems from two primary issues. The first issue is the cost. Most post-secondary educations now cost students tens if not hundreds of thousands of dollars to obtain and as such many young adults are starting their lives saddled with debt loads that will take them decades to detach from.

The second issue is the actual value that said education actually provides them. I can maybe think of a handful of lessons I learned throughout 7 years of post-secondary education that I actually use on a regular basis and this is coming from someone who works in a field relevant to their studies! Therefore, as the years go by, students are paying more and more money for less and less value.

The trouble is however, that this disdain for learning is holding people back from achieving all of their financial goals in life. In the world we live in today, you need to possess a valuable and updated skill set if you want to be competitive on the open market. This means having a cutting edge education from either a reputable college or one that was self-obtained. Fortunately, with all the resources that are online these days, more and more people are becoming aware that college isn’t the only path you can take to achieve higher levels of knowledge.

Now, like I just said there are a ton of resources out there from which you can learn some great skills but one of the traps people tend to fall into is what I call “the allure of free”. Most people seek the least costly options for learning and while I too am a fan of getting a good deal, when it comes to your education, this is not an area where you want to cheap out. This is for two reasons. First, if you want to ensure you gain value from your education, you need to make sure you’re learning from credible sources so grifting free information off someone’s blog probably won’t be as credible as taking someone’s course that has over 5000 positive reviews.

Second, we pay attention to what we pay for. So many people accumulate mounds of free resources but give them little attention because they simply don’t value them because of their low cost of acquisition. In my experience, you’ll take your education more seriously when you have skin in the game by paying for said information. Therefore, while I’m not telling you to empty your bank to learn, I am saying that paying to play can actually get you much further ahead than you probably realize.

Therefore, if you take learning seriously and sidestep the trap of “free learning” then you will be one step closer to reaching your financial goals!


Money Rule #2: Only buy assets you understand

Let me ask you a question, would you marry someone without ever meeting them? For most people, the thought of making a decision of such magnitude with very little background on the person would seem like a recipe for failure and to that I agree. However, what many people these days fail to understand is that this is exactly what they are doing when they buy a stock or any asset for that matter that they don’t understand.

Over the past year, online brokers like Charles Schwab, TD Ameritrade, E*TRADE and Robinhood saw new accounts grow as much as 170% which is indicative of the massive spike in interest in stock investing that we saw during the start of the pandemic. Unfortunately, many of these new investors adhered to the investing game plan of seeing which stocks everyone was talking about and buying those ones too. Of course, for some, this gamble did pay off but for others it led to financial ruin as they ended up buying at peak stock prices which fell shortly after and have never recovered.

Therefore, in the same way that you would get to know someone before you married them, you should be doing just as much vetting when it comes to your investments. For instance, if you were looking to buy a new stock for your portfolio, you would want to know who the management team is, what their strategic objectives for the short and long-term are and would want to perform or at least consult technical and fundamental analyses.

Now, I know that for most people, the thought of having to do all of this work just to invest a couple thousand dollars into a stock seems like a hassle and honestly, this is why I seldom do it. Personally, I find that I get a much higher return on investment by identifying one or two low-cost index funds and making weekly contributions into said funds. This way, I limit my time spent researching and vetting assets to put my money into so that I can spend more time advancing my career, working on my businesses or just enjoying the non-monetary pleasures of life.

Therefore, the key takeaway here is to never buy assets you don’t understand. When you do, you’re gambling, not investing and as you know, when you gamble, the house always wins!


Money Rule #3: Always maintain one year of living expenses

You know what rhymes with emergency? No, me neither, but what I can tell you is that emergencies are a part of life and having cash to deal with them is a must! It’s for this reason that I always recommend people set aside at least one year’s worth of living expenses that will allow them to tackle life’s unfortunate surprises.

Now, you may be thinking, “but why a year’s worth Adam, isn’t 3–6 months enough?”. No, no it’s not. It takes the average person 4 months to find a new job if they become unemployed and if you’re on the slower end of that timeline then you can see how the general wisdom of having 3–6 months set aside can be rather ineffective in keeping you financially afloat.

Now I know that the thought of using your free cash to set up an emergency fund isn’t that exciting but let me share with you two benefits you’re going to instantly realize when you do get this part of your finances in order. First, you’re going to have less financial stress.


Knowing you can tackle any unforeseen expenses is a huge flex and will eliminate those late night worries we’ve all experienced when we were in fragile financial states. Moreover, the other benefit you will enjoy when you have ample cash set aside is more flexibility in your life. If you want to change jobs or just take off an extended period of time to relax, recoup or contemplate the next chapter of your life then you can.

So, given that setting up a proper emergency fund is a must, how do you go about doing it? For most people, this will require some consistent effort but fortunately with the right system in place it can be a rather painless process. What I recommend is calculate what your annual living expenses are and then set up automated savings deductions from your paycheck with your employer. Have between 5–10% of your paycheck routed into a savings account every month until your emergency fund is adequately funded based on the living expenses you’ve identified as being needed to get you through a full year without work. By setting up this approach, as long as you have regular paychecks coming in, your emergency fund will fill up over time and you can then enjoy all of the benefits I just mentioned!


Money Rule #4: Surround yourself with financially savvy people

One of the best business lessons I’ve learned in my 30 years on Earth is that the “ship rises with the tide”. If you’re unfamiliar with this saying, it means that if conditions around you are prosperous then you will prosper as well. Unfortunately, the same can be said in the opposing way. If you are surrounded by hardship or a lack of prosperity then your own success will be in jeopardy. Fortunately, or unfortunately, not only have I been told this wisdom by those I’ve interacted with so far in my life but I have also experienced both of these situations first hand.

Back when I was working in an up and coming management consulting firm, I saw large jumps in both my experience level and income due to the company always taking on new and exciting projects and having the money to constantly increase my pay. This was an example of my boat rising within the tides of the company’s success. However, in more recent times, working in a sector that was shut down by the pandemic led to career stagnancy regardless of how hard I tried and how well I performed.

It’s for this reason that if you want to get ahead financially in life you need to be spending as much time as possible with those who will raise your ship. However, it’s not enough to just hang around people with similar interests as you. This is where most people go wrong. Instead, you should aim to be the most inexperienced and least successful person within your social circles. This way, you can absorb as much information and wisdom as possible and use these bonds to help you make strides in your own financial endeavours. In fact, this approach can be used in all aspects of your life and I’ve found it to always be beneficial. For instance, beyond spending time with people who make 10 times more than me, I spend time with those who are more fit, more well read and the like. Therefore, when you upgrade your social circle, you will inevitably be upgrading your life as well!


Money Rule #5: Never rely on one source of income

One of my favorite memories as a child was going down to the local ice cream shop and getting a three scoop cone. However, one day, as I was going to take a bite, the top scoop fell off. This was my first experience of heartbreak at the innocent age of 9 years old. Fortunately, I had two scoops left on the cone so it wasn’t all bad and little to my knowledge, this day taught me two very important lessons. The first lesson is that I needed to be more careful when eating my ice cream. The second, was that having a contingency plan in place is key to success.

Now, I don’t know if most people never had a traumatic ice cream experience before but I see way too many people these days living the single scoop ice cream life and if you ask me this is a recipe for disaster. Look no further than the wage stagnation that exists in the western world and the ongoing layoffs that we saw during the pandemic and it will become instantly clear as to why having just one source of income is an inadvisable financial move. Whether you’ve already come to the realization of how fragile having one income is or you are just being awakened to it now, the question you probably have is what other ways can you start to make more money. If you ask me, there are two categories of alternative income sources which I classify as low and high hanging fruit opportunities.

Low-hanging fruit opportunities are those that are easily accessible and offer you more opportunities for income right away. Examples include picking up a part-time job or working a side hustle. These are good options if you need cash now but offer a lot less value in the long-term because of their income generating limitations.

On the contrary, there are high-hanging opportunities. These come in the form of starting and running side businesses or offering a high-income skill to the open market. Generally, starting to make money in these ways takes more time than their low-hanging fruit counterparts but their long term returns tend to be worth the extra effort. For example, my YouTube channel didn’t make me any money for the first 2 years and now it makes me over $100,000 a year and requires less than 5 hours of work a week on my part.

Regardless of which path you choose to supplement your income, the key is to put in place alternate means of making money. Not only will this allow you to raise your overall income but will insulate you from the harsh economic world we live in today which if you ask me is an enviable position to be in!