The 10 Commandments of Wealth and Happiness

I’ve been offering money advice for more than 30 years. Here are the 10 most important things I’ve learned about making more money and being happier while you do it.

Better Investing


I’m now financially independent. I didn’t get this way overnight, nor did I do it by selling books or advice. I did it the same way you can: one paycheck at a time over many years.

One of my young staffers recently asked if I could condense everything I’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. Live like you’re going to die tomorrow, but invest like you’re going to live forever

The ease of making money in stocks, real estate, or other risk-based assets is inversely proportional to your time horizon. In 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 occasionally — but not obsessively — then wait.

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 IRA is Apple. I don’t remember exactly when I bought it, but I’m guessing it was in 2002 or 2003. My split adjusted price is around $1/share: As I write this, Apple’s trading at around $126/share. Had I been listening to CNBC or some other outlet promoting constant trading, I almost certainly wouldn’t still own it.

The lesson? 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, indicating it’s time to move on — but don’t act rashly. Patience pays.

2. Listen to your own voice above all 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 from 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: It was too good to be true.

If 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. Remember:

  • 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 infomercials and start listening to yourself.

3. Covet bad economic times

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 18,000 or 8,000?

Nobody wants their fellow citizens to be out of work. But the cyclical nature of our economy all but assures this will periodically happen. If you still have a job when the next downturn arrives, it will be 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. Work as little as possible

A friend of mine, Liz Pulliam Weston, once 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:

  • Pay off all their debts.
  • Help their families.
  • Donate more to charity.
  • Pursue their passions, including travel.

Note these goals are largely achievable without winning the lottery. And that was her point: Listing what you’d like to do if money is 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 you regard as so fulfilling you’d do it even if it didn’t pay anything. In other words, the word “work” implies doing something you have to do, not something you want to do. You should never “work.”

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.

5. Don’t create debt

I’m always getting questions about debt. “Should I borrow for this, that, or the other?” “What’s an acceptable debt level?” “Is 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 than giving someone else your money in exchange for temporarily 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
  • 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 owe money, you’re much more the master of your own destiny.

There are two ways to achieve financial freedom: Have so much money 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 massive money. But living debt-free isn’t a matter of luck or even hard work. It’s a simple choice, available to everyone.

6. Be frugal — but not miserly

The key to accumulating more savings isn’t to spend less — it’s to spend less without sacrificing your quality of life. If going out to dinner with your significant other is something you enjoy, not doing it may create a happier bank balance, but an unhappier you. That’s 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.

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: It’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.

7. Regard possessions not in terms of money, but time

You go to the mall and spend $150 on clothes. But what you spent isn’t just $150. If 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.

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