There are 3 rules for building sustainable wealth and being financially independent:

  1. Earn money.
  2. Spend less than you earn.
  3. Invest the difference.
  4. Break the rules.

Of course there is much more complexity to each rule:

Earn money.

  • Work smart and hard at what you are good at, enjoy, and can do consistently for decades.
  • Assess and take calculated risks. Control what you can control. Realise that luck is out of your hands.
  • Invest in yourself. Continually learn and evolve.
  • Help others. It’s not about you.

Spend less than you earn.

  • Budget. Know where your money goes.
  • Spending money is behaviour, not maths or spreadsheets.
  • Spend money on experiences, not things. Enjoy the journey.
  • Buy nice things. Quality over quantity.
  • Delay gratification. Control your emotions. Be humble. Be hungry.
  • Help others. It’s not about you.

Invest the difference.

  • Don’t gamble, trade, or speculate. It’s a waste of time in the long term.
  • Buy a house to live in if you live in Australia and pay off the debt mercilessly.
  • Buy businesses (shares). Core investments in index tracking ETFs, and satellite investments in individual companies.
  • Diversify. Don’t put everything you have into one thing.
  • Leave your investments alone for decades. Don’t interrupt the power of compounding.
  • Invest in being open to a life partner who makes you a better person. It will be the most important wealth decision of your life.
  • Help others. It’s not about you.

Break the rules.

  • Context is crucial. Everyone is different in different circumstances.
  • Think for yourself.
  • Know when to break the rules.
  • See the world as it is, not as you would have it be.
  • Act to change the world as you would have it be.
  • Help others. It’s not about you.