Everybody in this space has “rules,” and guidelines, and principles.

Me, too.

What I'm about to share with you is solid wisdom gleaned over 50 years, lots of sweat and cursing, and many MANY mistakes.

Learn from my mistakes.

Dumb people hear others make stupid decisions and ignore them at their peril.

Don't be that guy.

Without further ado, let's start.

#1 – Spend Less than You Earn

Spend less than you earn. If you don't have a job, you know what to do (go get one).

Otherwise, it doesn't really matter how much money you make. Just spend less of it than you earn.

#2 – Invest now

You know all that money you made in #1? You need to spend less than that, and then some. Know why?

The gubmint takes some of it.

And, you need to invest some of it, at least 10 percent. Ideally, 25-50 percent. I'm not kidding.

Here's what I suggest: Start with 10 percent. As your income grows (and it will), take the increase and invest it.

Some will tell you to “pay yourself first.” This is wise advice.

I use and highly recommend Monarch Money for your budgeting needs. You can read a review about it here.

#3 – Diversify!

Diversify! Mark Twain is famous for saying “Don't put all your eggs in one basket.”

That fraud was right! I joke. But Twain was his pen name. His real name was Smart Guy.

What does it mean to diversify? Generically, it means “spread your risk.”

Don't just invest in one company. Many folks invest their earnings in their employer's stock.

This is the worst idea ever.

Think about it: Your company hits the skids. They lay people off. You're a people. Because business sucks, their stock decreases in price.

Now you get to lose twice.

Don't do that.

If you want to invest in the “stock market” (and you should), spread your risk over a variety of companies, industries, and countries where possible.

The whole idea is that it's less likely that all your stocks take a dump all at once.

I mean, it could (and does) happen. But bad news at IBM shouldn't kill your stock in that little widget company in Hong Kong.

Unless the whole global economy tanks. Then you're out of a job, there's riots in the street, and even ramen is too expensive.

Sometimes, you're just fucked.

But most times, diversifying is good.

#4 – Don't Be Greedy

Gordon Gecko said “Greed is good,” in Wall Street. He's a dick. Greed is for suckers.

Because, at the end of the day (as those types like to say), greed will kill you.

Instead, if you've made a killing on your Microsoft stock (who am I kidding?), take some money out (sell some) and play with the house's money.

That's the smart thing to do. Plus, rebalancing your portfolio helps with #3.

#5 – Rewards are free!

I feel like I should stop at 4. Those are the biggies.

But I can't feel good about this free advice without telling you this:

Spending less than you earn kinda sucks. I mean, instant gratification is what we humans LURVE, right?

So, do this, but only for brief periods of time:

• Get yourself a “rewards” credit card. Amazon and Costco come immediately to mind.

Here's what you do with them: Pay for EVERYTHING need for a month. Groceries, gas, eating out.

Pay it all off at the end of the month (when the bill is due).

Two things:

• Never pay interest you don't have to pay
• Take a little chunk out of the credit card companies' massive profit vault

With a family of 4, I can amass nearly $2,000 in “cash back” at Costco in a year.

Makes for a nice little windfall in February.

Oh, what to do with it? Refer to #2. That's what you do with the money.

Bottom line: They're paying you to borrow money from them. But only if you pay the balance before the payment due date.

#6 – Wise Credit

Be careful with credit. See #5.

Always pay off your balance before the payment due date. That way, you don't owe the credit card company any interest.

You also keep a relatively low “credit balance utilization.” This is a credit scoring factor that contributes heavily to your FICO score.

IF you do need to borrow money you don't have for a big purchase (like a house), shop for the best terms. Lowest interest rates is NOT always the best indicator of the best loan to get.

With mortgages, lenders muddy the waters a lot with hidden and not-so-hidden fees and “points.”

Look at the overall cost of the loan, both in terms of “life of loan” and on a monthly basis.

And don't EVER get in over your head with short-term unsecured credit. It will destroy you for years.

In most cases, if the shit hits the fan, you can sell your house for a closer percentage of its worth than you can sell your Beanie Baby collection you bought on credit.

Don't laugh. Actual breathing humans have done this.

#7 – Life Insurance

If you are financially responsible for others, get life insurance.

Buy term. It's cheaper and does exactly what you need it to do: Replace your income if you die.

If you aren't responsible for others, pass. It's that simple.

#8 – Stay Healthy

Get and stay healthy. I know, this doesn't sound like personal finance at all…

Until you look at the cost of so-called “health insurance.”

Sure, if you work for a largish corporation, they likely provide a portion of your health insurance premium. Plus, at group rates.

Rates you will NEVER see in the individual insurance market.

However, I fear that someday, that gravy train will be over and we'll all have to fend for ourselves.

And if you're obese, diabetic, and crippled, good luck on getting any insurance.

Best bet? Move to Canada.

(Except they won't take you unless you have a big bank account and can prove you won't be a drain on their system.)

It's a sad but real state of affairs. I don't know what to say here except:

• Let's aim for a single payer Medicare-like health plan
  
• I hope you get and stay as healthy as possible

After all, personal finance health is a distant second or tenth place compared to physical and mental health.

#9 – SHOP Wisely

Shop around for everything.

Damn near EVERYTHING can be negotiated. Don't be shy. Ask for discounts. What's the worst that can happen? They say no?

So?

#10 – Start a Side Hustle

Ah, the obligatory “Tenth Commandment.” You knew it was coming.

Here's the bombshell: You can cut your expenses only so much (near zero, obviously).

But your income is nearly unlimited.

How's that? “My damned boss hasn't given me a raise in six years. My income seems very limited, Bill.”

Start a side hustle.

You're smart. Resourceful. You've read the above. You do them. You've saved money. Invested some. You're building a nice portfolio.

Now, it's time to “kick it up a notch.”

How?

Start a side job.

In a future post, I'll share some ideas. Just give this some thought, okay?

There is something outside your job that you're good at. Better than most. And maybe it really turns you on.

Maybe you like photography. You've won a ribbon at the county fair. Think of the ways you can monetize that skill and passion.

How would you go about that? THINK.

And let's regroup. See you soon.

#11 – Emergency Fund

Hah! You thought I'd stop at ten. That's so 2000 years ago.

Before you do #2 (oh, man!), you have to build up your emergency fund.

Back when I was a youngin' (about 100 years ago), the sage advice was to build up a liquid fund (i.e., bank savings account or money market fund) of 3-6 months worth of job income.

No more. The last depression we had (I know, nobody will call it that) showed us we were way too risky with our EF.

Save at least six months worth of salary. A year is better.

It will be difficult. But you have to do it. The job market favors employees right now, but we all know this can turn on a dime.

And you don't want to be left hanging looking for a job that isn't there for a few months.

Hell, if I could, I'd save 2 years into an emergency fund.

Okay, that's really it. See you soon.

Addendum: Here's another good article that contains 15 Personal Finance Rules You Should Know by Heart.