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The 10 6ommandments of wea|th and

happ|ness
One of the stupidest expressions ever coined was "The one who dies with the most toys wins."
When you're on your death bed, you won't be thinking about the things you had - you'II be
thinking about the times you had.
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8y 3lacy Jorrsor j Nov 21, 2010
've been doing TV news stories about saving more, spending less, and avoiding
debt for more than 20 years. And 'm now financially independent. But unlike most
wealthy people you've read about online or seen on Oprah, didn't get this way
overnight, nor did do it by selling books or advice. did it the same way you can:
one paycheck at a time over many years.
One of my young staffers recently asked if could condense everything 've
learned into 10 simple ideas that would serve as a guide to those starting out,
starting over, or maybe beginning to realize they're not where they'd like to be.
While certainly a challenge, it's a worthy one. So here goes: the 10
commandments of achieving financial independence and being happier while you
do it .
1. Thou sha|t ||ve ||ke you're go|ng to d|e tomorrow, but |nvest ||ke
you're go|ng to ||ve forever.
The ease of making money in stocks, real estate, or other risk-based assets is
inversely proportional to your time horizon. n other words, making money over
long periods of time is easy making money overnight is the flip of a coin.
Money is like a tree: Plant it properly, care for it every so often, then wait patiently.
Stare at a newly planted tree for 24 hours, and you'll be convinced it's not growing.
Fixate on your investments the same way, and you could miss out on a game-
changer.
The biggest winner in my RA is Apple stock. don't remember exactly when
bought it, but 'm guessing it was in 2002 or 2003. My split adjusted price is around
$8/share: As write this, Apple's trading at around $300/share, for a gain of 3,800
percent. Had been listening to CNBC or some other "news outlet that promotes
constant trading, almost certainly wouldn't still own it.
You might like:
O 12 Things People Buy They Could Get Free
O 10 Things People Buy They Should Get Free
O The 10 Golden Rules of Saving on Everything
O 6 Steps to Your Personal ndependence Day
O 3 Steps to Cut Your Cable Bill 90 Percent

Patience is certainly a virtue when it comes to investing. invested a bunch of


money and built my online portfolio when the Dow was hitting generational lows
back in spring 2009. had no idea where the market was going next. was every
bit as scared as the next guy.
But having lived through similar times before was a stockbroker during the
market crash of 1987 and since 'm only in my mid-50s, was confident the
economy would rebound sometime before died. While the stock market has
come back quite nicely since then, in many parts of the country, housing prices
haven't. That's why 'm now looking for real estate investments. Are you?
n short, enjoy your life to the fullest every day live like you're going to die
tomorrow. But since you're probably not going to die tomorrow, plant part of your
money in quality stocks, real estate or other investments; then hold onto them.
Don't ignore your investments entirely sometimes fundamental things change
that indicate it's time to move on but don't act rashly. Patience pays.
. Thou sha|t ||sten to th|ne own vo|ce above a|| others.
My job as a consumer reporter has included listening to countless sad stories
about nice people being separated from their money by people who weren't so
nice. While these stories run the gamut from real estate deals to working at home,
they all start the same way: with a promise of something that seems too good to
be true.
And they all end the same way: t is. Just last week, helped someone who was
about to lose money by applying for a government grant.
f someone promises they can make you 3,000 percent in the stock market, they're
either a fool for sharing that information or a liar. Why would you send money to
either one? When you hear someone promising a simple solution to a complex
problem, stop listening to them and start listening to your own inner voice. You
know there's no pill that's going to make you skinny. You know the government's
not handing out free money for your small business. You know you can't buy a
house for $300. Stop listening to commercials and start listening to yourself.
. Thou sha|t covet bad econom|c t|mes.
Wealth is realized when the economy is booming, but that's not when it's created.
Wealth is created when times are bad, unemployment is high, problems are
massive, everybody's freaking out, and there's nothing but economic misery on
the horizon.
Would you rather buy a house for $400,000, or $200,000? Would you rather invest
in stocks when the Dow is at 12,000 or 7,000?
Obviously, nobody wants one in 10 Americans to be out of work. But the cyclical
nature of our economy all but assures that this will happen periodically. f you're
one of the 90 percent who still has a job, this is the time you've been saving for.
Stop listening to all the Chicken Littles in the media: The sky isn't falling. Get busy
put your cash to work and create some wealth.
4. Thou sha|t not work.
MSN Money's Liz Pulliam Weston recently wrote a great story called Pretend You
Won the Lottery. She asked her Facebook fans to describe what they would do if
they won the lottery. From that article:
Most of the responses had a lot in common. People overwhelmingly wanted to:
O Pay off all their debts.
O Help their families.
O Donate more to charity.
O Pursue their passions, including travel.
Note that these goals are largely achievable thout winning the lottery. And that
was her point: Listing what you'd like to do if money were no object puts you in
touch with the way you'd really like to spend your life.
My philosophy takes this concept a step further: When it comes to work, you
should try to do something that you regard as so fulfilling that you'd do it even if it
didn't pay anything. n other words, the word "work implies doing something you
have to do, not something you want to do. You should never "work.
've chosen to spend nearly all of my adult life in warm climates lived in Arizona
for 10 years and have now lived in Fort Lauderdale for nearly that long. Why?
Here's what 've always said: "You already spend a third of your life sleeping. Why
spend another third of it freezing your tail off?
No offense to you Northerners. realize some people enjoy the cold. The point is
that if you're going to spend a huge part of your life working, don't fill that time with
what makes you the most money. Fill it with what makes you the most fulfilled.
made more money in 1990 managing a branch office for a Wall Street investment
firm than will this year. But feel a lot less slimy (no offense to stockbrokers) and
lot more fulfilled. You can't put a price tag on that.
. Thou sha|t not create debt.
'm always getting questions about debt. "Should borrow for this, that, or the
other? "What's an acceptable debt level? "s there such a thing as good debt?
There's way too much analysis and mystery around something that isn't at all
mysterious. Paying interest is nothing more or less than giving someone else your
money in exchange for using theirs. Rule of thumb: To have as much money as
possible, avoid giving yours to other people.
Don't ever borrow money because you want something you can't afford. Borrow
money in only two circumstances: when your back is against the wall, or when
what you're buying will increase in value by more than what you're paying in
interest.
Debt also affects you on a level that can't be defined in dollars. When you owe
money, in a very real way you're a slave to that lender until you pay it back. When
you don't, you're much more the master of your own destiny.
There are two ways to achieve financial freedom: Have so much money that you
can't possibly spend it all (something exceedingly difficult to do) or don't owe
anybody anything. Granted, since you still have to eat and put a roof over your
head, living debt-free doesn't offer the same level of freedom as having more
money than you can possibly spend. But living debt-free isn't a matter of luck or
even hard work. t's a simple choice, available to everyone.
. Thou sha|t be fruga| - but not m|ser|y.
The key to accumulating more savings isn't to spend less it's to spend less
without sacrificing your quality of life. f going out to dinner with your significant
other is something that you enjoy, not doing it may create a happier bank balance,
but an unhappier you a trade-off that is neither worthwhile nor sustainable.
Eating an appetizer at home, then splitting an entree at the restaurant, however,
maintains your quality of life and fattens your bank account.
Finding ways to save is important, but avoiding deprivation is just as important. n
short, diets suck.
Whether they're food-related or money-related, if they leave you feeling deprived
and unhappy, they're not going to work. But there's a difference between food
diets and dollar diets: t's hard to lose weight without depriving yourself of the
foods you love, but it's easy to reduce spending without depriving yourself of the
things you love.
Cottage cheese isn't a suitable substitute for steak, but a used car is a perfectly
acceptable substitute for a new one. And the list goes on: watching TV online
rather than paying for cable, buying generics when they're just as good as name
brands, using house-swapping to get free lodging, downloading books from the
library instead of Amazon. No matter what you love, from physical possessions
to travel, there are ways to save without reducing your quality of life.
. Thou sha|t not regard possess|ons |n terms of money, but t|me.
You go to the mall and spend $150 on clothes. But what you spent isn't just $150.
f you earn $150 a day, you just spent a day of your life.
Almost every resource you have, from physical possessions to money, is
renewable. The amount of time you have on this planet, however, is finite. Once
used, it can never be replaced. So when you spend money especially if you
earned that money by doing something you had to do instead of what you wanted
to do you're spending your life.
This doesn't mean that you should never spend money. f those clothes are all that
important to you, by all means, buy them. But if it's really not going to make you
that much happier, don't. Think of it this way: f you can live on $150 a day, every
time you forgo spending $150, you just get one day closer to financial
independence.
8. Thou sha|t cons|der opportun|ty cost.
This is related to the commandment above. 55ortunty cost is an accounting term
that describes the cost of missing out on alternative uses for that money. For
example, when said above that not spending $150 on clothes puts you $150
closer to independence, that was a gross understatement. Because when you
save $150, investing those savings gives you the opportunity to have more
savings. f you're earning 10 percent, $150 invested for 20 years will ultimately
make you $1,000 richer. f you can live on $150 a day, ignoring inflation, you can
now retire nearly a week sooner, not just a day.
One of the exercises in my most recent book, Life or Debt, is to go around your
house and identify things you bought but probably didn't want or need. A quick
way to do this is to find things you haven't touched in months. These were
probably impulse buys. Add up the cost of these things, multiply them by 7, and
you'll arrive at the amount of money you could have had if you'd invested that
money at 10 percent for 20 years rather than wasting it.
And when you do this, consider the stuff in your closet, the stuff in your garage,
the rooms of your house that you heat and cool but don't use, the new cars you've
bought when used would have worked. The truth is that most of us have already
blown the opportunity to achieve financial independence much sooner. Maybe
now's the time to stop.
. Thou sha|t not put off t||| tomorrow what thou can save today.
Shortly after began my television career in 1988, went on set with a pack of
smokes, a can of soda, and a candy bar. explained that these things represented
the kind of money most of us throw away every day without thinking about it at
the time, about $5. But compound $5 at 10 percent for 30 years, and you'll end up
with about $340,000. That's why learning to save a few bucks here and there and
investing it is so important.
Fortunes are rarely made by investing big bucks, nor are they often made late in
life. Wealth most often comes from starting small and early.
n short, there are limited ways to get rich. You can inherit, marry well, build a
valuable business, successfully capitalize on exceptional talent, get exceedingly
lucky or spend less than you make and consistently invest your savings over
time. Even if you're on the road to any of the former, why not do the latter?
10. Thou sha|t not covet thy ne|ghbor's stuff.
f this commandment sounds familiar, that's because it resembles the Biblical 10th
commandment:
%hou shalt not covet thy nehbor's house, thou shalt not covet thy nehbor's 1e, nor hs
manservant, nor hs ma/servant, nor hs ox, nor hs ass, nor any thn that s thy nehbor's.
(Exodus 20:17)
Envy may not be the root of all evil, but it is the root of much wasted money. As 'm
fond of saying, you can either look rich or be rich, but you probably won't live long
enough to accomplish both. 've lived both ways, and trust me: Being rich is way
better than using debt to look rich.
We'll all admit that when on the verge of making a purchase decision, we're often
thinking of what our friends will say when they see it. Normal human behavior?
Sure, but it's not in your best interest, or theirs. Making your friends feel jealous
isn't nice, and feeling envy for other people's possessions is silly. Possessions
have never made anyone happy, nor will they.
Decide what really makes you happy, then spend or not accordingly. When
your friends make an impressive addition to their collection of material
possessions, be happy for them. One of the stupidest expressions ever coined
was: "The one who dies with the most toys wins. When you're on your death bed,
you won't be thinking about the things you had you'll be thinking about the times
you had.
$ubscr|be by ema||
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