What is the Best Money Rule?

We’re all aware of the old adage; you need to spend money to make money. Yet with such a hectic, high-pressure world, how exactly can you find the time to establish new financial habits? I’ve spent months researching and surveying some of the most successful people in this world and I’ve found that there are just five fundamental rules that every person needs to abide by when it comes to their finances.

What is the Best Money Rule?

1) Save at Least 10% of Your Total Income for Retirement. What is the Best Money Rule?

If it sounds too good to be true, it probably is.

The best way for people to save money is to simply not let the opportunity for a free lunch pass them by. This means turning down everything from selling old books and clothes on eBay, to buying expensive house cleaning services online and babysitting from neighbors’ kids instead of shelling out the money for pricey day care centers.

Try to avoid getting sucked into any way of making money that also comes with a false sense of security, since the easiest way to lose money is by taking on too much risk. This means finding ways to earn money that don’t involve selling your body or your car or your house, and always taking a good look at what you’re being charged before agreeing to do something.

Many people spend hundreds or even thousands of dollars each year on online course-ware that sounds too good to be true. The courses are often sold by companies that claim they can teach people to become professional web developers or graphic artists or writers, but they don’t. The fact is, there are no free lunches online.

The best way to make money online is by first learning how to market stuff online and then giving that knowledge away for free. This means creating videos about how you built your own website for cheap or how you learned to draw and then letting the world see them on YouTube.

One of the best ways to make money online is through affiliate programs. By using a service called JVZoo, you can build your own store on JVZoo and then promote it as an affiliate by becoming an affiliate for other people’s products and earning a commission on each sale.

If you decide to go the course-ware route, be sure to always check the credentials of your teachers. If they don’t have recognizable credentials and/or they don’t know the subject matter that they’re teaching, chances are you’ll be wasting your time and money.

What is the Best Money Rule?

2) Take More Actively Managed Mutual Funds Than Index Funds. What is the Best Money Rule?

Even experts sometimes miss the mark when it comes to money, but we can usually tell when someone is getting greedy. This is the reason why you should always have more actively managed mutual funds than index funds.

When it comes down to it, the difference between actively managed mutual funds and index funds comes down to fees. Since active management involves buying and selling stocks on a regular basis, the fees are much higher than what you can find in an index fund.

Taking more actively managed mutual funds than index funds means investing as much as possible into passively managed investments rather than higher-fee active ones when starting out.

The fact is, the best way to make money in the stock market is to invest in index funds and then let them sit until retirement. The problem with this is that you may have a hard time finding index funds without high fees.

As a general rule of thumb, index funds are made up of tens of thousands of stocks, which means it’s nearly impossible for an expert or anyone to pick winners and losers by actively managing them.