Financial independence is a goal many of us strive to achieve, yet only a few accomplish. In our experience, the most common reason why people fail to achieve this is due to a lack of knowledge about how to create wealth, while for others, it is often due to a lack of confidence in their ability to apply their knowledge. 

No doubt, many of you would agree that a successful strategy for creating wealth is to cut your losses short and let your profits run. In fact, according to the Free Dictionary, wealth creation is the “accumulation of assets (especially those that generate income) over a long period of time”. 

However, many people still invest in assets that lose money rather than financial assets that generate growth and income. But there are laws to wealth that we want to introduce you to that will enable you to stop losing and start marking money. Let’s get into it.

• What are the ten Laws of Wealth?
• How can I get Rich in 10 years?
• What are the three Rules of Wealth Building?
• What is the Law of Money?
• How can I Attract Money to my Life?

What are the ten Laws of Wealth?

Being rich doesn’t always mean having money, but 90% of the time it does. However, there are habits, behaviors, and “rules” essentially, that will allow you to get rich and grow wealth. It’s not an overnight process. There aren’t any get rich quick schemes here.

Read Also: Why Resourcefulness is the key to Unlocking Potentials and Creating Wealth

1. In every market, you control what matters most

The highs and lows of the market may be out of your hands, but how you choose to behave is within your power, and is an important driver of returns.

2. Diversification means always having to say you’re sorry

Diversification is not a panacea, nor does it prevent your portfolio from falling, even dramatically, at times. What it does is protect you from idiosyncratic risk and losing your shirt on a concentrated bet. Buying a car with an airbag is a good idea, even if you never get in a wreck. Diversifying your portfolio is similarly wise, even if the benefits may not always be apparent.

3. Risk is not a squiggly line

Risk is not a paper loss. Risk is not underperforming your golf buddy. Risk is not even underperforming a market benchmark. Real risk is the probability of you permanently losing your money. Accordingly, investors with a long time horizon and diversified portfolios are taking on little risk compared to someone with a more concentrated, shorter time frame.

4. Forecasting is for weathermen

Famed contrarian investor David Dreman found that from 1973 to 1993, of the 78,695 corporate earnings estimates he examined, there was a one-in-170 chance that analysts’ projections would fall within plus or minus 5% of the actual number. The smartest people in the world don’t bother with the crystal ball. Said financier J.P. Morgan of the market’s future trajectory, “It will fluctuate.”

5. You cannot do this alone

Most people understandably assume that the greatest value offered by a financial adviser is, well, financial advice. Not so. Vanguard’s “Advisor’s Alpha” study shows that working with an adviser provides around three percentage points of outperformance and that fully half of that value comes from behavioral coaching.

Morningstar, Aon Hewitt, and Envestnet all have similar investor studies showing that hand-holding is more important than stock picking when it comes to optimizing returns.

6. Excess is never permanent

John Neff, former head of Vanguard’s Windsor Fund, astutely noted that, “Every trend goes on forever, until it ends.” It has been said that nature abhors a vacuum and an investment corollary is that markets abhor excess. While short-term trends and emotionally fueled investors can push a stock up or down for a time, things tend to come back to Earth eventually. Betting that something will rise or fall in perpetuity is a risky bet.

7. Trouble is opportunity

Many investors are familiar with Buffett’s admonition to be “greedy when others are fearful and fearful when others are greedy,” yet so few of us manage to successfully view a downturn as the opportunity it truly is. There is true joy (and riches) to be had, so commit yourself to continue investing and even increasing your allocation when times are bad.

8. If it’s exciting, it’s probably a bad idea

Nobel laureate Paul Samuelson said it best, “Investing should be more like watching paint dry or watching grass grow.” Research shows that the average IPO in the U.S. has gone on to underperform the market benchmark by 21% per year in the first three years following its release. Emotion makes us a stranger to our rules, and straying from a discipline tends to end in disaster.

9. You are not special

Robert Shiller, a Nobel prize-winning economist, is fond of saying that “This time it’s different” is the most dangerous phrase in investing. While mania can carry a market for a time, the truth about what works long-term on Wall Street is pretty boring (think paying a fair price for a profitable company) and is unlikely to fundamentally change.

10. Your life is the best benchmark

Benchmarking to your own goals instead of arbitrary external ones has myriad benefits. First off, it personalizes the whole endeavor and makes investing about doing what you love instead of outperforming others. Research also shows that goals-based investors are more likely to stay the course during tough times and even save at higher rates since what they are chasing is so personally meaningful.

How can I get Rich in 10 years?

There are no secrets to getting rich overnight, but there are some repeatable, proven, systems to help you become rich. It’s crazy how many people still fall into get-rich-quick traps even though there are mountains of evidence that show that they’re total scams. Take multi-level marketing (MLM) businesses for example.

Here are the 4 steps to getting rich:

Step 1: Invest your money

The single most crucial thing you can do to ensure your financial future is investing — and the sooner you start, the easier it is to get wealthy. There are more than 100 years of evidence in the stock market that suggests this.

Still don’t believe ? Let’s look at a real-world example of how to become rich by investing.

Say you’re 25 years old and you decide to invest $500/month in a low-cost, diversified index fund. If you do that until you’re 60, how much money do you think you’d have?

Take a look:

$1,116,612.89

That’s right. You’d be a millionaire after only investing a few thousand dollars per year.

The two essential ways to invest your money are straightforward:

• 401k: Be sure to take advantage of your employer’s 401k plan by putting at least enough money to collect the employer match into it. This basically means that for every dollar you contribute, your company will match that (pre-tax!). This ensures you’re taking full advantage of what is essentially free money from your employer. That match is POWERFUL and can double your money over the course of your working life:

Roth IRA: Like your 401k, you’re going to want to max it out as much as possible. The amount you are allowed to contribute goes up occasionally. Currently you can contribute up to $6000 each year.

Step 2: Spend your money like a wealthy person

Setting up the system might seem hard — but in the end, it’s all about:

1. Automating your finances.
2. Knowing where your money goes so you’re in complete control of the situation.

Automating your finances allows your system to work for you and passively do the right thing instead of you constantly wondering if you have enough money to spend. Or, getting your credit card bill each month, shrugging, and saying to yourself, “Yeah, I guess I spent that much.”

And it’s simple: at the beginning of the month, when you receive your paycheck, the money is immediately sent to where it needs to go through automatic systems that you have set up already.

Some spending recommendations for your system:

• 50%-60% Fixed Costs: This includes things like utilities, rent, internet, and debt.
• 10% Investments: This includes your Roth IRA and 401k plan.
• 5%-10% Savings: This is money that goes towards things like vacations, weddings, home down payments, and unexpected expenses.
• 20-35% Guilt-free Spending: Fun money! Spend this on anything you want from nice dinners to movies.

Why automatic?

Because as humans we have incredibly limited willpower. It’s so limited in fact that it can render things like paying bills and putting money away in your savings each month a very difficult task.

Automating your finances subverts this by allowing you to save money without ever having to do it yourself.

Step 3: Tap into “hidden income”

We are not talking about piles of cash buried somewhere in your backyard — this is the money that you can be saving right now by negotiating your bills.

That’s right. With just a few one-time, 5-minute phone calls, you can save HUNDREDS a month on bills for your:

• Car insurance
• Cell phone plan
• Gym membership (less likely but still possible)
• Cable
• Credit card

It’s simple too — there are only 3 things you need to do to negotiate with these companies on fees and rates:

1. Call them up.
2. Tell them, “I’m a great customer, and I’d hate to have to leave because of a simple money issue.”
3. Ask, “What can you do for me to lower my rates?

Of course, you’re going to want to adjust this formula for whatever company you’re calling.

Along with your bills, you can also be EARNING more money through salary negotiation. This is actually one of the easiest and fastest way to earn more money. In fact, a one-time salary increase of $5,000 — properly invested — adds up to over $1,300,000 by the time you retire.

It’s a quick win, and you should absolutely capitalize on it. But if you’re looking for something that takes a bit more time — with a lot more upside — you should consider starting a business of your own.

Step 4: Build another stream of income

This is my all-time favorite answer to the question “how to become rich?” I’ve always believed that there’s a limit to how much money you can save — but no limit to how much you can earn.

This is especially true if you start your own online business.

We have found that there are two great ways to start a business:

1. Turn the skills you already have into a side hustle.
2. Start an online business and reach millions of people all over the world.

Side Hustle

This is one of the fastest ways to get started in business. By utilizing the skills and talents at your disposal, you can start freelancing and generating a steady source of income on the side.

And the best part: you don’t even have to quit the job you already have.

Online Business

With an online business, you can reach millions of people on the internet every day while scaling your product to help you earn millions online.

Check out just a few different ways you can make $1 million online.

• 250,000 people spending $4
• 100,000 spending $10
• 50,000 people spending $20
• 10,000 people spending $100
• 1,000 people spending $1,000

Could you find 1000 people to buy from you over the next few years? I think so.

To start an online business, you need to choose from 6 different models:

1. Software (including apps)
2. Physical products
3. Advertising
4. Affiliate marketing
5. Coaching
6. Online courses

Obviously, there’s a lot that goes into creating a business based on these models — getting traffic, building an audience, launching a product etc. — but it’s all completely doable.

Plus you can automate your online business so once you frontload the work, the business keeps paying you again and again, even while you sleep.

What are the three Rules of Wealth Building?

Building wealth is a topic that can spark heated debate, promote quirky “get rich quick” schemes, or drive people to pursue transactions they might otherwise never consider. But are “three simple steps to building wealth” a misleading concept?

The simple answer is no. But while the basic steps to building wealth are simple to understand, they’re much more difficult to follow.

Basically, to accumulate wealth over time, you need to do three things:

1. Make money. Before you can begin to save or invest, you need to have a long-term source of income that’s sufficient to have some left after you’ve covered your necessities and debts.
2. Save money. Once you have an income that’s enough to cover your basics, develop a proactive savings plan.
3. Invest money. Once you’ve set aside a monthly savings goal, invest it prudently.

1. Make Enough Money 

This step may seem elementary, but for those just starting out or in transition, this is the most fundamental step. Most of us have seen tables showing that a small amount regularly saved and compounded over time can eventually add up to substantial wealth. But those tables never cover the other sides of the story. Are you making enough to save in the first place?

Keep in mind that there’s only so much you can cut in costs. If your costs are already cut down to the bone, you should look into ways to increase your income. Also, are you good enough at what you do and do you enjoy it enough that you can do it for 40 or 50 years and save that money? 

There are two basic types of income—earned and passive. Earned income comes from what you “do for a living,” while passive income is derived from investments.

Those beginning their careers or in a career change can start with four considerations to decide how to derive their earned income:

1. What do you enjoy? You will perform better and be more likely to succeed financially doing something you enjoy.
2. What are you good at? Look at what you do well and how you can use those talents to earn a living.
3. What will pay well? Look at careers using what you enjoy and do well that will meet your financial expectations.
4. How to get there? Determine the education, training, and experience requirements needed to pursue your options.

Taking these considerations into account will put you on the right path. The key is to be open-minded and proactive. You should also evaluate your income situation periodically, but at least once a year.

2. Save Enough Money

You make enough money, you live pretty well, but you’re not saving enough. What’s wrong? The main reason this occurs is that your wants exceed your budget. To develop a budget or to get your existing budget on track, try these steps:

1. Track your spending for at least a month. You may want to use a financial software package to help you do this. Make sure to categorize your expenditures. Sometimes being aware of how much you spend can help you control your spending habits. 
2. Trim the fat. Break down your wants and needs. The need for food, shelter, and clothing are obvious, but also address less obvious needs. For instance, you may realize you’re eating lunch at a restaurant every day. Bringing your own lunch to work two or more days a week can help you save money.
3. Adjust according to your changing needs. As you go along, you probably will find that you’ve over- or under-budgeted a particular item and need to adjust.
4. Build your cushion. You never really know what’s around the corner. Aim to save around three to six months’ worth of expenses. This prepares you for financial setbacks, such as a job loss or health problem. If saving this cushion seems daunting, start small. 
5. Get matched! Contribute to your employer’s 401(k) or 403(b), and try to get the maximum your employer is matching. 

The most important step is to distinguish between what you really need and what you merely want. Finding simple ways to save a few extra bucks here and there could include programming your thermostat to turn itself down when you’re not home, using regular gasoline instead of premium, keeping your tires fully inflated, buying furniture from a quality thrift shop, and learning how to cook.

This doesn’t mean you have to be thrifty all the time. If you’re meeting savings goals, you should be willing to reward yourself and splurge (an appropriate amount) once in a while. You’ll feel better and be motivated to make more money.

3. Invest Money Appropriately

You’re making enough money and saving enough, but you’re putting it all in conservative investments like the regular savings account at your bank. That’s fine, right? Wrong! If you want to build a sizable portfolio, you have to take on some risk, which means you’ll have to invest in securities. So how do you determine what’s the right level of exposure for you?

Begin with an assessment of your situation. The CFA Institute advises investors to build an investment policy statement. To begin, determine your return and risk objectives. Quantify all of the elements affecting your financial life, including household income, your time horizon, tax considerations, cash flow or liquidity needs, and any other factors unique to you.

Next, determine the appropriate asset allocation for you. Most likely you will need to meet with a financial advisor unless you know enough to do this on your own. This allocation should be based on your investment policy statement. Your allocation will most likely include a mixture of cash, fixed income, equities, and alternative investments.

Risk-averse investors should keep in mind that portfolios need at least some equity exposure to protect against inflation. Also, younger investors can afford to allocate more of their portfolios to equities than older investors because they have time on their side.

Finally, diversify. Invest your equity and fixed-income exposures over a range of classes and styles. Do not try to time the market. When one style (e.g., large-cap growth) is underperforming the S&P 500, it is quite possible that another is outperforming it. Diversification takes the timing element out of the game. A qualified investment advisor can help you develop a prudent diversification strategy.

What is the Law of Money?

1. The Law of Implementation

The fact that you’re reading this article right now puts you in the top 5% of the world. Very few people are willing to dedicate time to their education and personal growth.

And the fact that you’re here, learning about wealth creation–instead of scrolling through Instagram, watching ‘epic fail’ compilations on YouTube, or sneaking another episode the latest Netflix original–shows me that you are not part of the 95% of our population content with mediocrity.

Which is great…But it’s not enough.

To create real wealth, education is only the first step. Without implementation education becomes a perverse form of procrastination that will turn you into an  “underachieving high-achiever”…someone who ‘knows’ how to get to the next level, but simply can’t seem to do it.

So, if you want to build and empire and have access to “Legacy Wealth” that will ensure your children, grandchildren, and great grandchildren are taken care of long after you’re gone, you must join the 1%.

The 1% who don’t just consume more content, more articles, more podcasts, and more courses. But who actually go out in the real world and create value by implementing what they’ve learned. And that is the first universal law of wealth creation.

Universal Law of Wealth Creation #1: You must implement the information in your head and take massive action to achieve the results you desire.

Because education without implementation is futile. You don’t get paid for what you know. You’re only paid for what gets done.

So if you want to make your first million and build an unshakable financial infrastructure…Educate yourself. Then IMMEDIATELY take action to implement what you’ve learned. Learn, implement, fail, implement again, succeed, repeat.

If you will follow this formula over a long enough timeline and bounce from failure to failure with no loss of enthusiasm…You will build the wealth you desire and live the life of your dreams.

2. The Law of Problem Solving  

We see so many entrepreneurs out there who are struggling to make money. It’s not that they’re lazy or bad people. It’s that their business is fundamentally flawed because they don’t understand the second law of creating wealth.

Universal Law of Wealth #2: You are paid in direct proportion to the size of the size, frequency, and quantity of problems you can solve.

If you want to make real wealth and create systems and businesses that generate consistent and predictable cash on command, you need to help people solve real problems.

Specifically, you must help them:

1. Change their body (lose fat, gain muscle, or have more energy)
2. Make more money
3. Have more sex
4. Spend more time doing things they enjoy

People are struggling with real pain each and every day. They have mortgages they’re behind on, relationships that are filled with conflict, bodies that aren’t working, and lives that feel out of control. Unless you can find a way to either directly or indirectly solve these problems and make their life feel like it’s ‘working’ better…They’re not going to give you money.

This doesn’t necessarily mean that the offer you have today can’t make money, it might mean you simply need to pivot its positioning to speak directly to one of these three problems.

“Get more confidence” becomes, “Develop the confidence you need to overcome your social anxiety and fearlessly date the man/woman of your dreams.” (problem solved: have more sex/improve relationships)

“Find your passion” becomes, “Discover your highest calling so you can create a business doing what you love and profit from your passions.” (problem solved: make more money, spend time doing things you love).

“Fix your mindset” becomes, “Discover the subconscious ‘blocks’ that are stopping you from achieving the health, wealth, and relationships you desire.” (problems solved, make more money, have more sex, change your body, and have time for the things you love).

When you can develop effective solutions to help people solve their biggest problems and clearly market that solution with simple and easy-to-understand language…your business will change forever.

There’s no shortage of problems that people need solved.

Make sure that you’re solving the right problems and solving them quickly, consistently, and frequently enough and you’ll be well on your path to lasting wealth and abundance.

3. The Law of Relationship  

Universal Law of Creating Wealth #3: To create real wealth you must develop a healthy relationship with money.

Listen, if you believe (even on a subconscious level) that money is the root of all evil or that rich people are bad, you will never make the money you want. How could you? If money is the root of all evil, why would you want more of it? If you believe rich people are ‘bad’ and see yourself as a good person, you can’t become rich!

Luckily, all of your negative money mindsets can be eradicated by accepting one simple truth: Money is nothing more than a tool.

It’s not ‘good’. It’s not ‘bad’. It’s not the root of all evil or the cause of all your misery.

It is nothing more than a medium of exchange between two parties. It’s a tool the same way a shovel, or a hammer, or an axe are tools. And when you reframe your relationship with money and realize the fault lies with the person wielding the tool (ie, you), not the tool itself, everything will change.

You’ll no longer think, “There’s never enough money to go around.” Instead, you’ll say, “Wow! I don’t have the money I want, I must not be providing enough value or managing my assets well enough to deserve the wealth I desire.” It is from this place and this place only that your path to wealth creation can begin.

By developing a positive relationship with money, you’ll see it for what it really is and begin to understand the true root causes of your financial distress.

And when you accept that money is vehicle for freedom, impact, and the lifestyle you deserve…you won’t feel an ounce of guilt for your desire to become very, very, very rich.

4. The Law of Generosity

Universal Law #4: The more you give, the more you get.

Listen. The fact that you have a device on which you can read this article shows me that you’re blessed. You have food on the table and more money than a huge portion of the world. And it is your duty and obligation to give back.

To shift the focus from “me” to “we.” To remove scarcity and fear from your mind and replace it with gratitude and abundance.

We are not suggesting that you go out and give away so much you don’t have enough left over to buy shoes for your children. But we are saying that, no matter how big or small, you must find a way to start giving back.

No matter where you are right now, someone else has it worse and you can afford to donate 5-15% of your take-home income to charities, causes, and individuals you believe in.

How can I Attract Money to my Life?

Experts sometimes say you can manifest anything in 7 days. If the process hasn’t been as simple for you, then you might be tempted to give up your Law of Attraction work.

However, it’s entirely possible to manifest wealth! You just have to earn the right techniques. In addition, even if abundance isn’t your main manifestation goal, you’ll surely benefit from attracting more money into your life regardless.

Whether you want to wine and dine with your dream partner, start a new business, travel the world, or build your confidence, some extra cash certainly can’t hurt. In many of the best Law of Attraction money stories, financial success is the gateway to a huge number of other forms of success. So, why not spend the next week or so honing these six fool-proof techniques?

Attract Money Step 1. Focus On Abundance

Often top of the list of Law of Attraction money tips, this exercise is predicated on the core Law of Attraction premise that you attract more of what you focus on.

So, if you spend more time focusing on the abundance you have, more could come your way. There are many ways to do this. For example:

• Keep a journal and make a daily habit of noting down 1-5 things you’re grateful to have.
• Close your eyes for 3-5 minutes, spending all the time inhabiting your deepest feelings of gratitude for the abundance in your life.

Attract Money Step 2. Flip The Script

When you’re trying to attract abundance, your inner critic will often tell you that you can’t. Sometimes, it will even tell you that you don’t deserve to be wealthy.

Whenever a negative thought like this arises, immediately flip it around and focus on the opposite. For example, when you worry “I don’t think I’ll ever be successful enough to make money”, firmly tell yourself “Everyone can be successful enough to make huge amounts of money”.

If necessary, use a thought-stopping technique like saying the word “Stop” out loud or picturing a red stop sign.

Attract Money Step 3. Spend In Alignment With Your Values

Another of the best ways to attract money is to ensure you spend the wealth you have on things that really matter. When you live in a way that aligns with your values, you get much money pleasure from spending and develop a much more positive relationship with money. And when you view money in a positive, loving way, you’ll attract more money instantly!

And if you’re not sure what you value, do the following:

1. Write down the five most important experiences of your life.
2. Write 5 words that describe each.
3. Ask yourself: what common themes emerge? These are your key values.

Attract Money Step 4. Face Facts

Manifesting wealth isn’t just about connecting money with happiness. It’s also about looking at the reality of your financial situation and acting accordingly. So, be honest with yourself. Look at all your finances, including debts. Don’t be afraid to reach out for help if you need it. Friends, family, and financial advisers can all help you draw up a plan to improve the situation.

If you don’t have abundance today, that’s okay. Remind yourself that it’s not possible to get to where you want to go unless you engage with the truth of where you are right now.

Attract Money Step 5. Smell Money

While it might sound strange at first, you’ll be better at using the Law of Attraction for money and wealth if you connect with the smell of money. When you do this, you align your own vibration with wealth and abundance. As you do this, imagine yourself as having all the wealth you need. Don’t think about why you want money, or how you wish you had more money. Let your brain believe you are fully abundant, right now.

This is a quick and easy exercise. However, done often, it can reset old negative beliefs about money, ones that are holding you back.

Attract Money Step 6. Banish Fear Of Success

Many people accidentally self-sabotage. So, you might on some level be afraid of what will happen if you attract money!

1. Write down all the reasons you might be afraid to be abundant. For example, you might write “What if people only use me for my wealth?” or “What if I’m not happy, even when I’m rich?”.
2. For each fear, think about where it comes from. Did someone from your past give you this message? Is it coming from your social setting? Note the source.
3. Finally, write a reply to each worry. For example, “I’ll still know true friends from false friends no matter how wealthy I am”.

Summary

There are ten key wealth building principles that lead to true wealth, not just monetary wealth. The objective is not just to become rich, but to build a balanced, fulfilling, wealthy life.

Read Also: Spending Strategies to Help you Live Within your Budget

These ten key principles will help keep you on track:

1. Build Wealth For A Deep Cause: Money alone is too shallow a goal to motivate you to overcome all the obstacles that stand between you and wealth. When you find a deeper goal like freedom, growth, creativity, or charity, then you’ll have the internal motivation to persist and succeed.
2. Give More Value Than You Take: When you give value then your financial success becomes a measure of how much you have given to the world. It’s a satisfying way to live.
3. Live with 100% Integrity: Integrity is non-negotiable because no amount of money can replace a good night’s sleep, a clear conscience, and a peaceful mind.
4. Be Courageous: Wealth results from doing what others won’t so you can have what others never will.
5. Be Disciplined: Life will conspire to distract you from achieving your goal. Only the disciplined will stay the course with consistent enough action to get results.
6. Avoid Conspicuous Consumption: Nobody ever spent their way to financial freedom. Every day you make a choice between consumption today or wealth for tomorrow.
7. Build Supportive Environments: The path of least resistance to wealth is paved by supportive environments that literally pull you toward the goal.
8. Apply Leverage: Leverage is what separates those who achieve wealth from those who don’t. You can’t reach the goal by trading time for money, and you can’t do it all yourself. You need leverage.
9. Treat Your Wealth Like A Business: As a wealth builder, you’re in the personal financial management business and must manage your net worth just like an executive manages a successful business.
10. Steward Your Wealth: Money is little more than a tool that comes with the responsibility to use it wisely. It’s not something you possess, but something that passes through you and must be given back.