This Money Rule Is The Key To Wealth


Lack of money is one of the leading causes of stress in our society today. You need money to pay your bills and live comfortably and as you already know, money-related issues are among the leading causes of divorce so you see, money is important. However, obtaining the money to sidestep these issues is easier said than done but once I learned one simple money rule many of my financial issues disappeared. Here’s the rule that took my financial progression to new heights.

Work a lot, spend a little, and invest the difference.

Although this rule seems so simple, it’s the exact reason why most people ignore it because they think there’s no way it can work. However, every rich person understands that the foundation of their success is built on this rule. Here’s a breakdown of each of the three components of this money rule.

Work A Lot

Firstly, rich people are hardworking people and if you want to become rich, you need to work a lot. I know there are people who advocate that hard work alone doesn’t make you rich which is true. However, I am yet to see a rich person that doesn’t work harder than the average person does. For instance, most people only work 40 hours a week and that’s it. Some even show up to work late and leave immediately after their shift ends. As a result, most of them end up having an average income and lifestyle. However, the average entrepreneur works at least 50 to 60 hours every single week. In extreme cases, some CEOs work for 15 hours every day and 90 hours every week especially during the early days of their business.

Now you may be wondering when you would get to enjoy yourself if you have to work so hard. The truth is you will not have to continue working like this all through your life but if you want to become rich then it is non-negotiable at the beginning. Even if you’re an investor, you have to spend time researching the right stocks to buy. So don’t let anyone deceive you that you’re going to be successful by only putting in the same time as average people. Today, Michael Jordan is known as a legend in basketball and most people think he was born with the gift but the truth is he trained harder than most players did. Howard Schultz, the CEO of Starbuck continued working from home even after putting 13 hours of work in the office. The billionaire entrepreneur, Mark Cuban said he didn’t go on vacation for 7 years while starting his first business. Therefore, if you want to work hard like rich people focus on the most important activities and concentrate your energy on them until you finish.

Furthermore, one of the benefits of working hard is you can achieve more within a short time. Someone who puts in 15 hours a day might be able to achieve twice as much as someone who barely stays for 8 hours. Therefore, you could gain more skills and experience faster by working harder. And with time, you wouldn’t have to work as much as you do to get the same result. For instance, as a business owner, you might be able to expand your business within a short time and make more money. Again if you’re a freelancer, you could increase your hourly rate in a short time by working hard and gaining experience. And if you’re employed, you stand a chance to be promoted faster by being hardworking than your colleagues.

One example of a hard worker is Elon Musk. In 2021, he became the world’s richest person with a net worth of roughly $185 billion. However, he didn’t just become the world’s richest person overnight. His success took him many years of hard work and dedication to achieve. There was a time where he would work over a hundred hours every week and even sleep on the floor in his office. Although he doesn’t work that many hours anymore, he still cranks out 80 to 90 hours of work every week. After it was announced that Elon is the richest person in the world, a Twitter user tagged him and wrote, “Elon Musk is now the richest person in the world at $190 billion.” Surprisingly, Elon replied to the tweet by writing, “How strange. Well, back to work….”

Another good example is the CEO of Apple, Tim Cook. He wakes up as early as 3:45 am every day and he starts working immediately. He’s able to go through about 700–800 emails he receives every day. Reading emails during work hours is one of the ways that people waste time but Tim Cook gets this distracting task off his list before anyone else is awake. He gets to work very early and he’s also one of the last people to close up shop.

Now that you’ve seen you can make more money by working hard, let’s also talk about how the rich spend their money. I know that one of the benefits of being rich is you can spend your money lavishly on any luxury without breaking a sweat. However, most rich people have a principle of spending very little. Note that what a billionaire considers as little could be different from what you consider as little. That’s why I started with the fact that you have to work hard to make more money. But it does not matter if you make more money. You’ll still become poor if you spend everything.


Spend A Little

So how do you spend less than you earn? Firstly, you need to have a budget to manage how you spend money. Spending money without a budget is one of the easiest ways to blow your income especially on things that you do not need. However, a budget helps you differentiate between your needs and wants and prioritize how you spend money.

Another way to spend less money is to live a modest lifestyle. You can buy the things that you want but always make sure you do not spend more than you earn because if not you’ll end up with debt. Although most wealthy people can buy whatever they want, they are known to have a modest lifestyle. You’ll always find Mark Zuckerberg of Facebook with a simple grey t-shirt and dark jeans. Also, the founder of Microsoft, Bill Gate seems to be more comfortable wearing his sweaters and a button-down shirt. He believes that he doesn’t need a fancy shirt for any reason. Another billionaire, Warren Buffet still lives in the same home in Omaha, Nebraska, which he bought for $31,500 in 1958.

Again, spending little money gives you more disposable income. For example, someone who earns $50,000 and spends 50% of their income would have more disposable income than someone who earns $80,000 and spend 80% of their income. The first person would have $25,000 while the second person who earns more would have $16,000. Another benefit of spending very little money is it reduces your financial stress. One of the reasons why most people worry about money is that they don’t have enough disposable income. However, you would be able to pay more important bills by planning your finances and spending little on things you do not need.

Furthermore, one of the most important reasons for dialing back your spending is so you can have more money to save and invest. Although both saving and investing are important, the two are not the same. Saving money means keeping it aside for future use while investing means using money to purchase an asset with the hope that the value will increase in the future.


Invest The Difference

Investing has become a primary means the rich use to build money because of its several benefits. Firstly, investing money is an excellent way to stay ahead of inflation. On average, the interest rates of most savings account is lower than the rate of inflation, which means the longer you save money, the more purchasing power it loses.

Also, investing is a way to build wealth by using money to make more money. Unlike employment income, investing allows you to make money without actively trading your time. Therefore, many people consider it an excellent way to prepare for retirement. For instance, you can invest in your employer’s sponsored 401k account or contribute to an individual retirement account. Another benefit is such investments come with tax advantages. The traditional 401k and IRA accounts allow you to invest your income before tax and it is only taxed when you want to withdraw money at retirement. Also, the Roth 401k and IRA accounts allow you to invest your money after tax and withdraw your money tax-free.

To show you what I mean, I’ll give a practical example of the growth of an investment in a savings account and another in an index fund account. Assuming you save $500 every month for 30 years, how much do you think you would have? The average interest rate for most banks is as low as 0.05% but let’s assume that you were able to get one with a high-interest rate of 0.5%. In this case, you’ll have $194,260.80 after 30 years.

Now let’s assume that you were investing the same $500 every month in an index fund for 30 years, how much do you think you would have? Historically, the average return on the stock market considering an index like the S&P 500 has been 10%. Since an index fund tracks the performance of a market index like the S&P 500, you could have just under $1 million after 30 years. The difference between the two is obvious and you can see why investing is a better option than saving.

Therefore, I’ll give you some various examples of where you can invest your money to get a good return on your investment. We’ve considered the first example which is the index fund. Also, we have mutual funds which vary slightly from index funds. A mutual fund is a type of investment vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market instruments, and other assets. Unlike an index fund, a professional fund manager actively manages a mutual fund.

Another investment option you may consider is individual stock investing. What you are doing is buying a share of a company and becoming a part owner. In this case, you would make money when the value of the shares increase and this is known as a capital gain. You could also make money when the company you invested in pays its shareholders a dividend, which is a share of the company’s profit. Stock market investing can be very profitable once you understand the basics. Other investing options include real estate, high-yielding savings accounts, certificates of deposit, government bond funds, and many more.

At this point, I am sure you’re ready to make more money and become richer by following this one money rule!