9 Rules of Money

1. 50/30/20 income rule

50% needs - housing, health care, food

30% wants - dining-out, entertainment

20% investing - retirement & non-retirement accounts

2. 4% financial freedom rules

A. You will never run out of money:

Withdraw only 4% of your investments per year while they grow at 7%. Get paid while money grows
forever.

B. How much do you need for retirement?

Divide your expenses by 4%

$60,000 per year divided by 4% = $1.5M

3. Rule of 72

Take 72 divided by the expected return to calculate how quickly your investment will doulbe
 

Example:
10% return

72 / 10 = 7.2 years to double

4. Mortgage/rent under 25% of income

Housing is typically your highest expenses. Overspending on housing takes money out of your wallet,
not putting money in your wallet.
 

Pro tip: House hack. Own a place and rent out a room/side unit.

5. Spend less than your earn

Profit = more income - less expenses

Only way to build wealth is to spend less than you earn.

Understand where money is going and develop a game plan.

6. Pay yourself first

Paying yourself first, rather than last, means you're much more likely to save money instead of
spending it.
7. Maintain a 6-month emergency fund
 Emergency fund is a safety net. Allows you to pay for unexpected expenses or handle economic
volatility without selling your assets.

Emergency is the best thing you can do for peace of mind.

8. Never carry credit card balances

Average credit card interest rate: 22%

Average return of the stock market: 10%

You can't build wealth while crippled with credit card debt
9. Buy used. Don't spend more than 20% of your take-home pay on it

Cars are liabilities that rack up expenses. It's not an asset because it takes money out of your pocket.
Use a car to take you from point A to point B.