7 Money Rules The Rich Don't Want You To Know

There are certain things in life that you didn’t  need to know, like all fruit loop colors taste the same or the apples you buy at the grocery  stores can be more than a year old. However, there are some things you need to know  that people are keeping from you which is why in this video, I will share with  you 7 money rules the rich don’t want you to know that will have you looking  at money in a totally different light. Also, if you are interested, you can download my free passive income  guide using the link in the descriptions.

Now, let’s get into it. Rule #1: The rule of utility When you think of having money, what comes to  mind? Do you think about buying a new car, putting food on the table or buying a new outfit to wear  to the club this weekend?

If any of these items come to mind then that’s good because it shows  that you understand what money truly is, which is a tool we can use to acquire the things we want  or need. Unfortunately though, the real utility that money provides is not often completely  understood and this is where many people go wrong. For instance, if right now you are making a rather  low income, chances are that you think that making more money will resolve most of your issues. 

However, while money can solve money issues, it can also propagate a host of others. For  instance, now you’re making double what you used to yet you’re working twice as much,  which your partner isn’t in love with and as such you’re now facing relationship issues. Plus,  because of your busy schedule, you haven’t gone to the gym in a month and your normal fitting  pants are starting to get a little tight.

Now, this isn’t to say that you  shouldn’t strive to make more money. As long as you are resolving  more issues than you’re creating, you should be slowly improving your overall  quality of life. However, it’s important to keep in mind that there isn’t a single person on  earth who doesn’t have any problems whatsoever.

For example, if you’re a millionaire, you may  not have to worry about bills, but you could have family members asking you for money all  the time. Alternatively, you may struggle with the worry that one day you could lose all  the wealth you’ve worked so hard to amass. Therefore, while you can strive  to make as much money as possible, never let it fool you into thinking that with  more money will come a problem-free life.

Rule #2: The rule of time Ask any rich person and they will tell  you that time is by far and away the most valuable resource we have. Sadly, most  people fail to appreciate how time factors into building wealth and it’s for this reason  that most people will live their entire lives in a state of financial mediocrity. However,  those who do master time tend to master money and they do this by understanding the two  core ideas I want to share with you now.

First, it’s nearly impossible to trade time for  money - that is when it’s just your time that you’re trading. You and I only have so many  hours in the day and unless you are making an ungodly amount of money per hour, generating a  six-figure income on your own can be tough - that is assuming you are striving to make good money  and get rich before you’re in adult diapers. The other problem with time is that as we age,  we tend to have less of it to commit to making money.

For instance, when I was young and single,  I could work 14 hours a day no problem. However, when you start having homeowner and relationship  responsibilities or add kids into the mix, time isn’t a resource you can maximize  in order to get rich. This is why the richest people among us look beyond their  own 24 hours when trying to build wealth.

If you look at the richest people on the Forbes  list, they are all business owners who have leveraged other people’s time, capital  and expertise. This isn’t a coincidence. Now, does this mean that you’ve got the concept of time all wrong?

Not at all. This is all  to say that becoming rich requires you to appreciate how your time factors  into your wealth building journey. For instance, it takes time to build career  experience that will allow you to climb the corporate ladder.

It takes time to learn  how to start up your first business and scale it to the revenue figures you want, and  it definitely takes time to leverage the power of the stock market and compound interest  to become rich! - Just ask Warren Buffett! Once you wrap your head around  how to capitalize on time, both your own and others, building  wealth becomes ten times easier.

One more thing, if you’re  enjoying the video so far, do me a huge favor and give  this video a thumbs up! Thank you! Rule #3: The rule of protection Have you ever asked yourself why you work?

Chances  are it’s not because you love listening to your co-workers telling you about their family  drama or like working late in order to meet an unrealistic deadline. For most people,  the answer is simple, you work to pay your bills and eventually retire. Sadly, while  most people have the skill of accumulation, in that they work for years to generate  the income they need to meet these goals, they lack the skill of protection and extend their  path to financial freedom more than they have to.

So, what does the skill of protection  entail? It’s fending off foes that want to take your money and we face them every  single day. It’s the vacation your wife’s been begging you to go on that will set you  back 3 years of savings.

It’s the oversized home that your parents expect you to  buy to uphold the family name. It’s the $60,000 car that you hope will add some  excitement back into your life. Each one of these are financial foes, separating you  from your main goal of financial freedom.

You see, anyone can go out and make money.  What separates those who get and stay rich and those who struggle financially is how  they manage the resources they have. This is important to internalize because just  like you can’t out exercise a bad diet, you can’t out earn a spending problem so the more  protective you are of your money, the better.

Rule #4: The rule of minimal savings For the entirety of your life, you’ve been  told to save your money. Your parents told you to save for a rainy day, the news tells you  to stash your cash and of course banks are more than happy to take your money. However, should  you actually be saving your money?

Not always. You see, saving money isn’t the path to wealth and  prosperity that people make it out to be. In fact, when you save your money, the only person you’re  making rich is the bank.

You may not know this but banks generate a large amount of their incomes  using your money. They take your deposits and lend it out to others at lucrative interest rates  while paying you a pittance in the process. Now, does this mean you should avoid saving  money all together?

Of course not. It just means that you need to be more strategic  in how much money you stash in the bank. For instance, I only put enough money in the bank  to cover emergency expenses and my day-to-day bills.

Being on the more conservative side, I  like having a year’s worth of expenses in the bank but a good goal for anyone just starting out  is to have anywhere from 3-6 months set aside. Then, with the rest of my money, I use it to  acquire real estate, index funds and the like. This allows me to generate much greater returns  than the bank would ever give me and it's for this reason that you want to minimize how much you  save while in turn maximizing how much you invest.

Rule #5: The rule of expectation If you’re like most people, then you’ve probably  told yourself that once you hit a certain salary or net worth figure that you’ll be happy.  I know that I’ve told myself this thousands of times yet what I’ve come to realize over  time, and you may have too, is that getting to our stated goal never fully satisfies us, it  simply causes us to push the goalpost further. For me personally, I told myself that  once I made $80,000 a year at my job, I would be happy.

However, once I got there, I decided that making $100,000 would be  better, then $120,000 and so on and so forth. So, is this to say that you shouldn’t set  financial goals for yourself? Not at all.

However, pushing off being happy  into the future is a big mistake and sadly most of us continue to  make this mistake day after day. Now, why is this important to realize? Because  even though hearing me say this is probably resonating with you, most of us don’t really  internalize this thought and instead we keep pushing the goalposts further and what I’ve  come to learn over time is that when our current state and expected state don’t align,  this is when frustration and discontent arise.

For instance, let’s say that  last year you got a brand new job making $75,000 a year. This is  the income you knew you deserved so once those paychecks came rolling  in, you were more than content. However, after a year of great performance  and the acquisition of more experience, you’re still making $75,000 but believe you  should be making $80,000.

All of a sudden, your expectation is that you should be  making $5,000 more yet you’re not and this is when resentment starts to set in.  This $5,000 discrepancy is what’s known as your expectation gap and as long  as it exists, you’ll never be happy. For instance, there are people making  $150,000 a year who are unhappy because they think they should be making $200,000. 

On the contrary, there are people making $50,000 a year who are elated because they  never expected to make more than $40,000. Therefore, to be financially content, you need  to close your expectation gap. You can do this by striving for more or simply desiring  less.

Whichever you choose is up to you, but chances are you won’t be happy until you do. Rule #6: The rule of privacy If you ask most people why they want to get  rich, most will tell you all the things they would buy if they had more money. However,  is that really what being rich is all about?

In the book, The Psychology of Money, author  Morgan Housel states that “wealth is what you don’t see” and he’s totally right in  saying this. Many of the richest people I know drive average cars, own modest homes  and are not flashy in any way. However, if you saw their bank accounts, your eyes  would probably roll back in your head.

However, if we dive a bit deeper  into what this saying really means, it actually leaves us clues as to how we  should go about building wealth. Again, as the saying goes “wealth is what  you don’t see” meaning that part of becoming wealthy is not showing off which is  a friendly reminder that all of the material goods we buy are directly opposed to our  goal of becoming financially abundant. Now, logically, we can all get behind  the idea that the more you buy, the less money you have but putting financial  conservatism into practice is easier said than done.

There’s always that new car or  vacation pulling at us and while life isn’t all about saving and investing, the more  of it you can do the quicker you’ll be rich. Therefore, if you are presently working to  get rich for all the things you can buy, you may want to change course. Don’t attach  your financial success to material goods but the feeling of power and freedom it can  provide.

I say this because the more you need, the harder it is to grow richer but the  less you need, well, the opposite is true. Rule #7: The rule of obligation Do you know the best part about being a kid?  No, it’s not going out for recess or having your mom pick out your clothes.

The best part  about being a kid is having no responsibilities and not a care in the world. Sadly, we can’t remain in this state of complete  bliss forever and have to eventually take on some responsibilities. For instance, we  take on responsibilities at our jobs, within our families and more specifically  in the assets and liabilities we acquire.

Now, when it comes to the things we buy, they  do provide us more utility. For instance, buying a house gives us a place to raise  our family and hopefully an asset that will appreciate over time. However, it  takes as much as it gives.

For example, it prompts monthly mortgage payments,  concerns over home repairs and keeps us rooted in one city or town. The crazy part  is that this is an example of productive debt. When we look at other forms of debt like  credit card debt, the upside is basically zero.

At best you gain a bit of convenience  but become plagued by ongoing interest charges and repayments, with each stealing  a bit more of your financial flexibility. Well, the rich understanding that being  wealthy isn’t about how many things you own but how little things own you. Put  another way, your level of wealth is tied to how free you are and while it’s  great to have a fancy car or a big home, when these items start restricting your day-to-day  lifestyle, or have you living a certain way, all of a sudden, they cut down your level of wealth  regardless of how easily you can afford them.

Therefore, to feel richer regardless of how  much you have, your goal should be to rid yourself of financial attachments. Clear off  your student and credit card debts. Aim to be mortgage free and when you achieve these goals,  you’ll feel much richer than you presently are.

Well guys, thank you so much for watching, let  me know your thoughts down below, and as always, give this video a like and subscribe  if you haven’t. With that being said, have a great night or day, and  I’ll see you in the next one.