Money Rules

The 50/30/20 rule allocates 20% to savings. Ambitious savers target 30-50%. Automate it on payday so it happens before you can spend it.

This is not optional. Without an emergency fund, one car repair or medical bill forces you into debt that unwinds months of progress.

Credit card interest (20-25% APR) is the fastest way to destroy wealth. Pay the full balance every month without exception. If you cannot pay it off, you cannot afford it.

The difference between 0.03% and 1.0% in fees costs $340,000+ on a $500K portfolio over 30 years. Fees are the one guaranteed drag on returns. Minimize them relentlessly.

An employer match is a 50-100% instant return on your money. Not capturing the full match is leaving free money on the table. Even if you have debt, the match is almost always worth getting.

Tax-free growth for decades. Tax-free withdrawals in retirement. No required minimum distributions. The most powerful retirement account available to most Americans.

Housing is the biggest expense in most budgets. Keeping it at or below 25% leaves room for saving and investing. At 40%+, you are house-poor.

The average new car payment is $726/month. A 3-5 year old Honda or Toyota costs $200-$300/month — or nothing if paid cash. Cars lose 50%+ of value in 5 years.

Term life costs 10-15x less than whole life for the same coverage. Buy term, invest the difference in index funds. The math is not close.

Missing the 10 best days in the market over 20 years cuts your returns in half. Time in the market beats timing the market — every study confirms this.

Impulse purchases feel urgent. After 48 hours, most feel unnecessary. This single rule eliminates the majority of regret spending.

Paying off a 24% credit card is a guaranteed 24% return. No investment can match that. Below 7% (mortgage, student loans), invest simultaneously.

The stock market can drop 40% in a year and take 3-5 years to recover. Money needed within 5 years belongs in savings accounts or CDs, not stocks.

Lifestyle inflation kills wealth building. When you get a $10,000 raise, invest $5,000 and enjoy $5,000. This prevents spending from expanding to match income.

Every market crash in history has been followed by a recovery to new highs. Selling at the bottom locks in losses. Stay invested, keep contributing, and view crashes as buying opportunities.

Fee-only means no commissions. Fiduciary means legally required to act in your interest. If your advisor earns commissions, they are a salesperson.

Concentration builds wealth fast — and destroys it fast. Diversification through index funds is the safer, more reliable path for the vast majority of investors.

401(k), Roth IRA, HSA — these accounts save you thousands in taxes annually and compound tax-free or tax-deferred. Taxable accounts should be the last bucket you fill.

U.S. stocks (VTI), international stocks (VXUS), bonds (BND). Adjust the ratio based on age. This simple portfolio matches or beats 95% of complex strategies.

You cannot cut what you do not see. One month of tracking reveals where your money actually goes — and it is always different from what you think.

A higher deductible means lower premiums. Once you have an emergency fund, you can handle a $1,000-$2,500 deductible and save hundreds per year on premiums.

Define what enough looks like — the income, savings, and lifestyle where more money would not meaningfully improve your happiness. Without a target, you will never feel wealthy.

Generosity breaks the scarcity mindset. You do not have to wait until you are rich to give. Start at 1%, increase as your income grows. It is good for your community and your psychology.

The Millionaire Next Door, The Simple Path to Wealth, I Will Teach You to Be Rich, The Psychology of Money. Four books that together contain 90% of what you need to know.

Nobody knows your net worth by looking at your car. Spending signals wealth to others while destroying it. Saving builds it silently. True wealth is invisible.