The 10 Commandments of Wealth and

Happiness
1. Live like youre going to die tomorrow, but invest like youre going to live forever

The ease of making money in stocks, real estate, or other risk-based assets is
inversely proportional to your time horizon. In other words, making money over long
periods of time is easy making money overnight is the flip of a coin.

Money is like a tree: Plant it properly, care for it occasionally, but not obsessively,
then wait.

Stare at a newly planted tree for 24 hours and youll be convinced its not growing.
Fixate on your investments the same way, and you could miss out on a gamechanger.

The biggest winner in my IRA is Apple. I dont remember exactly when I bought it,
but Im guessing it was in 2002 or 2003. My split adjusted price is around $1/share:
As I write this, Apples trading at around $126/share. Had I been listening to CNBC
or some other outlet promoting constant trading, I almost certainly wouldnt still
own it.

The lesson? Enjoy your life to the fullest every day live like youre going to die
tomorrow. But since youre probably not going to die tomorrow, plant part of your
money in quality stocks, real estate or other investments; then hold onto them.
Dont ignore your investments entirely sometimes fundamental things change
indicating its time to move on but dont act rashly. Patience pays.

2. Listen to your own voice above all others

My job as a consumer reporter has included listening to countless sad stories about
nice people being separated from their money by people who werent so nice. While
these stories run the gamut from real estate deals to working from home, they all
start the same way: with a promise of something that seems too good to be true.

And they all end the same way: It was to good to be true.

If someone promises they can make you 3,000 percent in the stock market, theyre
either a fool for sharing that information or a liar. Why would you send money to
either one? When you hear someone promising a simple solution to a complex
problem, stop listening to them and start listening to your own inner voice. You
know theres no pill thats going to make you skinny. You know the governments
not handing out free money for your small business. You know you cant buy a
house for $300. Stop listening to infomercials and start listening to yourself.

3. Covet bad economic times

Wealth is realized when the economy is booming, but thats not when its created.
Wealth is created when times are bad, unemployment is high, problems are
massive, everybodys freaking out, and theres nothing but economic misery on the
horizon.

Would you rather buy a house for $400,000, or $200,000? Would you rather invest
in stocks when the Dow is at 12,000 or 7,000?

Nobody wants their fellow citizens to be out of work. But the cyclical nature of our
economy all but assures this will periodically happen. If you still have a job, this is
the time youve been saving for. Stop listening to all the Chicken Littles in the
media: The sky isnt falling. Get busy put your cash to work and create some
wealth.
4. Work as little as possible

A friend of mine, Liz Pulliam Weston, once wrote a great story called Pretend You
Won the Lottery. She asked her Facebook fans to describe what they would do if
they won the lottery. From that article:

Most of the responses had a lot in common. People overwhelmingly wanted to:

Pay off all their debts.

Help their families.
Donate more to charity.
Pursue their passions, including travel.

Note these goals are largely achievable without winning the lottery. And that was
her point: Listing what youd like to do if money is no object puts you in touch with
the way youd really like to spend your life.

My philosophy takes this concept a step further: When it comes to work, you should
try to do something that you regard as so fulfilling that youd do it even if it didnt
pay anything. In other words, the word work implies doing something you have to
do, not something you want to do. You should never work.

If youre going to spend a huge part of your life working, dont fill that time with
what makes you the most money. Fill it with what makes you the most fulfilled.
5. Dont create debt

Im always getting questions about debt. Should I borrow for this, that, or the
other? Whats an acceptable debt level? Is there such a thing as good debt?

Theres way too much analysis and mystery around something that isnt at all
mysterious. Paying interest is nothing more than giving someone else your money
in exchange for temporarily using theirs. Rule of thumb: To have as much money as
possible, avoid giving yours to other people.

Dont ever borrow money because you want something you cant afford. Borrow
money in only two circumstances: when your back is against the wall, or when what
youre buying will increase in value by more than what youre paying in interest.

Debt also affects you on a level that cant be defined in dollars. When you owe
money, in a very real way youre a slave to that lender until you pay it back. When
you dont, youre much more the master of your own destiny.

There are two ways to achieve financial freedom: Have so much money you cant
possibly spend it all (something exceedingly difficult to do) or dont owe anybody
anything. Granted, since you still have to eat and put a roof over your head, living
debt-free doesnt offer the same level of freedom as having massive money. But
living debt-free isnt a matter of luck or even hard work. Its a simple choice,
available to everyone.
6. Be frugal but not miserly

The key to accumulating more savings isnt to spend less its to spend less without
sacrificing your quality of life. If going out to dinner with your significant other is
something you enjoy, not doing it may create a happier bank balance, but an
unhappier you: a trade-off that is neither worthwhile nor sustainable. Eating an
appetizer at home, then splitting an entree at the restaurant, however, maintains
your quality of life and fattens your bank account.

Diets suck. Whether theyre food-related or money-related, if they leave you feeling
deprived and unhappy, theyre not going to work. But theres a difference between
food diets and dollar diets: Its hard to lose weight without depriving yourself of the
foods you love, but its easy to reduce spending without depriving yourself of the
things you love.

Cottage cheese isnt a suitable substitute for steak, but a used car is a perfectly
acceptable substitute for a new one. And the list goes on: watching TV online rather
than paying for cable, buying generics when theyre just as good as name brands,
using house-swapping to get free lodging, downloading books from the library
instead of Amazon. No matter what you love, from physical possessions to travel,
there are ways to save without reducing your quality of life.

7. Regard possessions not in terms of money, but time

You go to the mall and spend $150 on clothes. But what you spent isnt just $150. If
you earn $150 a day, you just spent a day of your life.

Almost every resource you have, from physical possessions to money, is renewable.
The amount of time you have on this planet, however, is finite. Once used, it can
never be replaced. So when you spend money especially if you earned that money
by doing something you had to do instead of what you wanted to do youre
spending your life.

This doesnt mean you should never spend money. If those clothes are all that
important to you, by all means, buy them. But if its really not going to make you
that much happier, dont. Think of it this way: If you can live on $150 a day, every
time you forgo spending $150, you get one day closer to financial independence.
8. Always consider opportunity cost

This is related to the commandment above. Opportunity cost is an accounting term

that describes the cost of missing out on alternative uses for money.

For example, when I said above that not spending $150 on clothes puts you $150
closer to independence, that was a gross understatement. Because when you save
$150, investing those savings gives you the opportunity to have more savings. If
youre earning 10 percent, $150 invested for 20 years will ultimately make you
$1,000 richer. If you can live on $150 a day, ignoring inflation, you can now retire
nearly a week sooner, not just a day.

One of the exercises in my book, Life or Debt, is to go around your house and
identify things you bought but probably didnt want or need. A quick way to do this
is to find things you havent touched in months. These were probably impulse buys.
Add up the cost of these things, multiply them by 7, and youll arrive at the amount
of money you could have had if youd invested that money at 10 percent for 20
years rather than wasting it.

And when you do this, consider the stuff in your closet, the stuff in your garage, the
rooms of your house that you heat and cool but dont use, the new cars youve
bought when used would have worked. The truth is that most of us have already
blown the opportunity to achieve financial independence much sooner. Maybe nows
the time to stop.
9. Dont put off till tomorrow what you can save today

Shortly after I began my television career in 1988, I went on set with a pack of
smokes, a can of soda, and a candy bar. I explained that these things represented
the kind of money most of us throw away every day without thinking about it; at the
time, about $5. But compound $5 daily at 10 percent for 30 years, and youll end up
with about $340,000. Thats why learning to save a few bucks here and there and
investing it is so important.

Fortunes are rarely made by investing big bucks, nor are they often made late in
life. Wealth most often comes from starting small and early.

There are limited ways to get rich. You can inherit, marry well, build a valuable
business, successfully capitalize on exceptional talent, get exceedingly lucky or
spend less than you make and consistently invest your savings over time. Even if
youre on the road to any of the former, why not do the latter?

10. Envy is your enemy

You can either look rich or be rich, but you probably wont live long enough to
accomplish both. Ive lived both ways, and trust me: Being rich is way better than
using debt to appear rich.

Most of us will admit that, when on the verge of making a purchase, were often
thinking of what our friends will say when they see it. Normal human behavior?
Sure, but its not in your best interest, or theirs. Making your friends jealous isnt
nice and feeling envy for other peoples possessions is silly. Possessions have never
made anyone happy, nor will they.

Decide what really makes you happy, then spend or not accordingly. When your
friends make an impressive addition to their collection of material possessions, be
happy for them.

One of the stupidest expressions ever coined was: The one who dies with the most
toys wins. When youre on your death bed, you wont be thinking about the things
you had youll be thinking about the times you had.