The 10 Commandments of Wealth and Happiness

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Happy grateful senior woman holding over a thousand dollars in cash and smiling
Roman Samborskyi /

I’m now financially independent, but I didn’t get this way overnight. Nor did I do it by selling books, offering seminars or appearing on “Oprah.” I did it the same way you’re doing it: one paycheck at a time over long periods of time.

A few years back, one of my younger staffers suggested I condense everything I’ve learned into a few simple ideas to serve as a guide to those starting out, starting over or maybe realizing 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 maybe getting a little happier while you do it.

1. Live like you’ll die tomorrow, but invest like you’ll live forever

Rich man with money pointing at a stock chart
Hryshchyshen Serhii /

The ease of making money in stocks, real estate or other risk-based assets is inversely proportional to the 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.

The biggest winner in my IRA is Apple. I believe I bought it in 2002 or 2003, and I still have it. Had I been listening to CNBC or some other media outlet promoting 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 fundamentals change, indicating it’s time to move on. But don’t act rashly. Patience pays.

2. Listen to your own voice above all others

Skeptical or judgmental woman looking confused or doubtful
pathdoc /

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. These stories run the gamut from real estate deals to work-from-home scams, but 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% in the stock market, they’re either a fool for sharing that information or a liar. Why would you send money to either kind of person?

When someone promises a simple solution to a complex problem, stop listening to them and start listening to your own inner voice.

3. Covet bad economic times

Excited man on phone looking at laptop in surprise
Damir Khabirov /

Wealth is realized when the economy is booming. But wealth is created when times are tough, unemployment is high, everybody’s freaking out, and there’s nothing but economic misery on the horizon.

Would you rather buy a house for $450,000 or $250,000? Would you rather invest in stocks when the Dow is at 35,000 or 10,000?

Nobody wants their fellow citizens to be out of work. But the cyclical nature of our economy all but ensures 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. Don’t listen to all the Chicken Littles in the media. The sky isn’t falling. Put your cash to work and create some wealth.

4. Work as little as possible

Woman reading a book on an e-reader on the beach
Ralf Geithe /

A friend of mine, Liz Pulliam Weston, once wrote a great story called “Pretend You Won the Lottery.” She asked her Facebook fans 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 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 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. Avoid debt

Woman cutting up a credit card
Doucefleur /

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.

To have as much money as possible, avoid giving yours to other people.

Never 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, or don’t owe anybody anything.

Granted, living debt-free doesn’t offer the same level of freedom as having massive amounts of 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

Shopper buying clothes at a thrift store
SeventyFour /

The key to accumulating more savings isn’t to spend less — it’s to spend less without sacrificing your quality of life. If you enjoy going out to dinner with your significant other, 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 entrée 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 a diet leaves you feeling deprived and unhappy, it’s 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:

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

Man pointing at his watch
Koldunov /

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 it doing something you had to do instead of what you wanted to do — you’re spending your life.

This doesn’t mean you should never spend money. If those clothes are all that important to you, buy them. But if it’s really not going to make you that much happier, don’t. Think of it this way: If you can live on $150 a day, every time you forgo spending $150, you get one day closer to financial independence.

8. Always consider the ‘opportunity cost’

Woman thinking about retirement
Cast Of Thousands /

“Opportunity cost” is an accounting term that describes the cost of missing out on alternative uses for money.

For example, when I said before that not spending $150 on clothes puts you $150 closer to financial independence, that was a gross understatement. When you save $150, you have the opportunity to build even more savings by investing it.

If you invest $150 for 20 years and earn a 10% return, it will be worth about $1,050. So, if 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 book “Life or Debt” is to go around your house and identify things you bought but probably didn’t want or need. Then, add up the cost of these things, multiply that sum by 7, and you’ll arrive at the amount of money you could have had if you’d invested that money at 10% for 20 years.

When you do this, consider the stuff in your closet and garage, the rooms of your house that you heat and cool but don’t use, and the new cars you’ve bought when a used car would have worked just as well.

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 making mistakes.

9. Don’t put off until tomorrow what you can save today

Excited businessman investing and leaping into new opportunities
aslysun /

Shortly after I began my television career in 1988, I went on set with a pack of smokes, a can of soda and a candy bar. I 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 invest $5 a day for 30 years and earn a 10% return on it, and you’ll end up with more than $300,000. That’s why learning to save a few bucks here and there and investing that money is so important.

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, too?

10. Envy is your enemy

bestjeroen /

You can either look rich or be rich, but you probably won’t live long enough to accomplish both. I’ve lived both ways, and trust me: Being rich is way better than using debt to appear rich.

Most of us will admit that when we’re on the verge of making a purchase, 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 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 save — 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 deathbed, you won’t be thinking about the things you had — you’ll be thinking about the times you had.

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