Home > Mom's Life > Family Finances > Saving Tips > Basic Rules for Financial Freedom: Get in the Wealthy Mindset

Slideshow Iconslideshows MORE


Basic Rules for Financial Freedom: Get in the Wealthy Mindset

5 of 10

Understand that Money Begets Money

There is no greater truth than this -- money makes money. It likes clustering together. It breeds quietly and quickly like rabbits. It prefers to hang out in big groups. Money makes money. The rich get richer; the poor get poorer. That's life. Yes, it is sad. But it does seem to be a fact. Now, we can work hard ourselves and do something about it, or we can sit around moaning and become part of the problem. The choice, as always, is entirely ours.

If you do want to do something about it, it makes sense to earn a tidy sum and use your money wisely to help the less fortunate. Or, do whatever with it you choose.

When you have some money, you'll be astonished at how quickly it can grow. I recommend you understand and learn the concept of compound interest as quickly as possible.

If you spend all you get, this Rule will never work for you; it'll never get your money working for you. You have to set aside money for breeding purposes. If you ran a rabbit farm and killed and ate all your rabbits, you wouldn't have any left to keep going. Forget the rabbit farm -- you're going to start a money farm. Your money will breed. You can then reinvest some and spend some -- but you can't spend it all, or you'll have no more rabbits. Look, this stuff isn't rocket science, but it is amazing how many people simply don't get it. But you do now. You have been given the best tips I can give you:

  • Put some money aside for breeding purposes.
  • Cream a little off for spending.
  • Reinvest the bulk to build up a good and healthy stock.
  • Keep it to yourself.

Next: Don't Make Money by Being Bad

From The Rules of Money Copyright © 2007, FT Press. Used by permission of FT Press, and Pearson Education. All rights reserved.

To order this book, buy on Amazon.

Fatal error: Allowed memory size of 67108864 bytes exhausted (tried to allocate 163552356 bytes) in /site/lib/vendor/zendframework/zendframework/library/Zend/EventManager/Event.php on line 53