I’ve made my share of money mistakes. But after 35 years writing about personal finance, as well as a decade as a Wall Street investment advisor and nearly 45 years as a CPA, I’ve also figured out which rules are worth following every single time.
Not most of the time. Every time.
These 10 are mine. They’re the lines I won’t cross, no matter who’s asking or how good the pitch sounds. Some I learned by watching other people. Some I learned the hard way.
Break them, and you’ll survive, but follow them and you’ll almost certainly end up richer.
Here they are.
1. I’ll never carry a credit card balance
This is the easiest money I’ve ever made — and I make it by not spending it.
The average credit card now charges around 21% interest, according to the Federal Reserve. Think about that. There’s no investment on earth that reliably pays you 21%. But your card charges it, guaranteed, the second you carry a balance.
So I treat every credit card like a debit card with better fraud protection. I charge what I can pay off, then pay it in full. Every month.
If you’re already carrying a balance, killing it is the best “investment” you can make. Here’s how to get out of debt fast.
2. I’ll never finance something that’s going to go down in value
Borrowing money isn’t automatically dumb. If I borrow to buy something that earns me more than the loan costs, that can make sense. Things like a house, or an education.
But financing something that loses value? That’s paying interest for the privilege of going broke slower.
The classic example is a new car. Kelley Blue Book says the average new vehicle loses about 20% of its value in the first year and keeps falling — a $50,000 car is worth roughly $22,500 after five years.
Now stretch that loan over six or seven years, and you’ll owe more than the car’s worth for most of the ride. I’ve never owned a new car, and here’s the full math on why.
3. I’ll never co-sign a loan
When somebody asks me to co-sign, here’s what they’re really saying: A professional lender, whose entire job is judging risk, looked at this person and said no.
Co-signing puts me on the hook for the whole debt if they don’t pay. And the FTC warns that the lender doesn’t have to chase the borrower first — they can come straight to me. On defaulted co-signed loans, as many as three in four co-signers get asked to pay.
Worse, I might not know there’s a problem until my own credit is wrecked.
I’ll help people I love in plenty of ways. Guaranteeing a loan a bank already rejected isn’t one of them.
4. I’ll never lend money I can’t afford to give away
Notice I didn’t say I’ll never lend money. I said I’ll never lend what I can’t afford to lose.
Here’s the truth: When you lend to friends or family, there’s a decent chance you’re really making a gift — you just don’t know it yet.
A Bankrate survey found that about 70% of us have lent money to someone close, and more than half of them regretted it. They lost the money, damaged the relationship, or both.
So my rule is simple. If I can give it without resentment, I’ll hand it over and consider it gone. If I can’t afford to lose it, the answer is no. I’d rather keep the friend than the IOU.
5. I’ll never buy an extended warranty
The salesperson always frames it the same way: “For just a few dollars more, total peace of mind.” What they’re really selling is overpriced insurance against something that usually never happens.
Consumer Reports found that most people who buy an extended car warranty never use it for repairs — and those who do typically spend more on the warranty than they get back. Across everyone, the median savings was zero.
The same applies to warranties on everything from toasters to TVs.
Here’s my approach. I keep the money I’d have spent on the warranty. If something breaks, I pay for the repair. Over a lifetime of purchases, I come out way ahead — and the savings are mine, not the retailer’s.
Quick aside — most internet financial advice comes from people who weren’t alive during the last recession. I’ve been writing about money for more than 35 years. Want rock-solid advice? Sign up for the free Money Talks Newsletter. Takes 10 seconds. No fluff. No spam.
6. I’ll never buy an investment I can’t explain in one sentence
If I can’t describe how an investment makes money in a single, plain sentence, I don’t buy it. Period.
I bought Apple stock because of a billion iPhone users. I bought Google because it dominated search. I bought Nvidia because its chips were faster.
This rule has saved me from more bad deals than I can count. Complexity is where the fees hide. It’s where the risk hides. And it’s how salespeople separate smart people from their money — by making them too embarrassed to admit they don’t understand.
Warren Buffett built one of the world’s great fortunes partly by refusing to invest in businesses he couldn’t understand. If it’s good enough for him, it’s good enough for me.
When someone can’t explain an investment simply, it’s usually because they’re hoping you won’t notice what’s really going on.
7. I’ll never ignore the fees eating my returns
Fees feel small. A “1% advisory fee” sounds like nothing. It isn’t.
Years ago I did a TV news story at a local Ferrari dealership, explaining that the fees you’re paying, even inside a 401(k), compounded over time, could add up to enough to buy one of their cars.
The management fees often hidden in mutual funds are transferring your savings to someone else.
I’m not saying never pay for advice. I’m saying know exactly what you’re paying and what you’re getting. A fee you don’t notice is a fee you’ll never question.
8. I’ll never make a money decision under pressure
“This deal is only good today.” The moment I hear that, my wallet snaps shut.
In my 10 years as a stockbroker, I learned that urgency is the oldest trick in the book. Nobody pressures you into a decision that’s good for you. They pressure you because thinking it through would kill the sale.
So any decision involving real money gets slept on. If the offer evaporates overnight, it was never worth taking. And even if it was, oh well. Other deals will come along.
The same logic helps you spot a rip-off before it gets you.
9. I’ll never try to time the market
Buying low and selling high is great advice. The problem is, nobody rings a bell at the top or the bottom. Trying to jump in and out at the perfect moment is a fool’s errand — and I’ve watched a lot of fools try.
Here’s the proof. S&P’s long-running SPIVA scorecard shows that over the past 20 years, roughly 9 out of 10 professional fund managers failed to beat their benchmark index.
These are full-time experts with research teams and expensive tech. If they can’t reliably time the market, neither can you, and neither can I.
So I don’t try. I buy quality, I hold, and I let time do the heavy lifting — which is a big part of why index funds belong in most portfolios.
10. I’ll never follow the crowd
This is the big one — the rule that sits underneath all the others.
When everybody’s piling into a hot market, that’s usually a sign it’s about to go down. As Buffett puts it, be greedy when others are fearful and fearful when others are greedy. The crowd is almost always late.
But this goes way beyond investing. I don’t buy something because a commercial told me to. And I’m certainly not applying for a credit card or buying a pair of pants because some movie star told me to.
The crowd follows the loudest voice. I’d rather follow the math. It’s less exciting, but it’s right a lot more often.
Most of these habits show up in the rules that made me a millionaire, too — because following the crowd is how most people stay broke.
The bottom line
None of these rules are complicated. That’s the point.
Getting rich — and staying rich — isn’t about one brilliant move. It’s about avoiding the dumb ones, over and over, for decades. The fancy stuff gets the headlines. The boring discipline gets the results.
Pick even a few of these and stick to them, and your future self will thank you.
I’ve been at this for a long time. These 10 rules have never let me down. They won’t let you down either.
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