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I got the inspiration to write this post after watching a Youtube video last night; one of those top 10 videos about famous celebrities that are broke.

(Don’t ask me why I watched it, the internet is a mysterious thing sometimes)

I was actually entertained and surprised by some of the names that were on the list. But being a person raised in the era of fake news, I did a bit of googling to verify if the video was a load of bull or spoke the truth.  

It spoke the truth.

Before I forget…save this post on Pinterest so other people can learn these fundamental money lessons as well.

rules for wealth creation
For someone who’s pretty much on Tim Burton’s payroll. I was pretty shocked.

And then it got me thinking about the countless individuals I know personally that are financially struggling. People who, on the surface shouldn’t be. Or at the very least I didn’t think they had any reason to be, but then it occurred to me that a lot of people simply don’t know how to manage their money.

They’ve never been taught and they’ve never thought to educate themselves either.

It’s like giving someone who doesn’t know how to drive a car. You can give them a garage full of cars and they’ll never get any better at driving. Same thing with money. 

No job promotion or salary rise is going to suddenly answer your money problems. What you find is, most people just end up spending more as they earn more. Every money problem you had when you were making less is still a problem when you make more. The numbers are just bigger…

So, here are 3 rules to money that will help you on the right direction towards storing your wealth, creating more wealth and accumulating wealth.

The 3 Rules to Wealth Creation

  1. Spend within your means.
  2. Have multiple streams of income
  3. Use your money to make more money

Let’s go over each one in more detail so hopefully I can convince you to follow these 3 money rules too.

Click to read

Spend within your means

This is the first rule for wealth creation. The art of saving money isn’t complicated or full of secrets only known to a select few. If you know how to do grade 6 mathematics you can easily save money by counting what’s coming in and what’s going out of your pocket.

I personally use a free app on my Android phone called AndroMoney to track my financial activities. I also use Freshbooks to do my overall bookkeeping. 

The key takeaway from this rule is you don’t want to be living paycheck to paycheck.

You have to put away something each month to start your journey of creating wealth. It doesn’t matter how little you think it is. Something is better than nothing.

However, a lot of people say something along the lines of “I don’t have anything left at the end of the month to put away”, and to those individuals I would advise to either:

  1. Spend the next month to track everything you do financially. Record everything you buy and every dollar that’s coming in. Use a notebook or an app, it doesn’t matter as long as you have a record. Then evaluate if you’re able to cut anything out or find cheaper alternatives instead. You’ll be surprised how much we spend on things we don’t take note of. I use to spend a ridiculous amount on mango smoothies before I began tracking my spending.
  2. If you already have a sizable amount of debt, then go to your bank manager and talk to them about refinancing your debt. Or work out a repayment program with them that will work for both you and your bank. Focus on repaying your debt off before putting your efforts in saving money, but even then you’ll want to give yourself some flexibility for unexpected expenses each month.
  3. Read my post on how to create a personal budget that you can actually follow and keep.
frugal spending habits
Click to read

Have multiple streams of income

After learning how to spend your money and save your money, it’s time to think about where it’s coming from. For the majority of you reading this, your main income source is probably from a full-time job. Which worked just fine in the post war era all the way up to the 90’s.

But now?

Not so much.

Job security is at an all time low and it’s predicted to only get lower as younger millennials are actively opting to job hop themselves. Employer and employees alike are no longer looking for life-time partnerships, but short contextual ones.

It would be wise for anyone to diversify their streams of income on this one point alone, but let me put it in another way for you. If you want to retire earlier than the national average age and retire without downsizing. You don’t rely on your salary alone.

Don’t believe me?

Ask the countless studies conducted in recent years on retirement and wealth creation.

rules for wealth creation
credit to ABC news

The ones with the largest net worth saw their salary accounting for only 20%! So what’s the other 80%?

From other income sources, be it dividends or interest or capital gains on real estate. The rule for wealth creation and ultimately retiring young is to not rely on just your salary alone.

Which leads me to the third money rule.

Use your money to make more money

How do you increase your sources of income? For the most part it takes money, and in some incidents, time. Now a lot of people won’t have a lot of time due to their full-time jobs, so the common ways of gaining other forms of income would be:

  • Investing in stocks for dividends and interests
  • Buying other financial products or assets for capital gains and or interest
  • Real estate for rental income or capital gains

All of which don’t require a large amount of time commitment to manage.

All of which, are different types of passive income.

rules for wealth creation
Credit to

Who doesn’t like the idea of making money without trading in your time for it. The unfortunate reality about passive income it that you can only build passive income by two ways.

  1. Upfront capital – such as buying assets
  2. Sweat capital – where you create the asset from scratch (ie. time and effort)

It use to be good sense to use an active income source (your day job) to fund the acquisition of assets that’ll generate a passive income stream for you. But that was before the internet was what it is today.

With the internet as it is, you don’t have to have large sums of money sitting in the bank before you can build an investment portfolio, or real estate portfolio OR even buy a license of a successful franchise. All you need is time.

Ok ok, I know. I said most of you reading this don’t have a lot of time, because most of you probably have a full time day job.

I get it.

BUT, let’s say you DO have time. What kind of passive income streams would you be able to create with it?

I personally have enjoyed the following types of passive income:

  • Royalties from publishing
  • Sales from digital products
  • Affiliate marketing commissions
  • Adsense 

But there’s a TON more than just the ones I’ve dabbled my hands in. The possibilities are truly endless when it comes to making money online. From buying partial ownership on property, to P2P lending. 

Click the above image, if you want a full list of possible passive income streams you can start.

And these are the 3 money rules I follow in life. I intend to follow them for as long as I’m alive, but never say never! (Maybe I learn something new that makes more sense) 

Did you enjoy this post? If you did, please take a moment to use the social media buttons at the bottom to share this with friends, family, colleagues, your neighbour’s cat, anyone with access to the internet 🙂 Thanks! 

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This Post Has 4 Comments

  1. Kate

    I want to know more about the Kindle ebook course

    1. Winnie MD

      Hey Kate,

      What do you want to know about the course? It’s completely free so you just need to read it.

  2. Jess

    I have something to add under the list of tips for people who have nothing to save at the end of the month. Pay yourself first!! After assessing your monthly spend to see where your money goes and then making some easy (or tough) cuts, one of the best things to do is set up an auto deposit to a separate saving account. I used to “save” what was left over but if it wasn’t used within the month it sat in an account with all of my other bill paying dollars and would probably be spent in the next few months without me noticing because there was no differentiation. To combat this I set up an auto deposit for $300 per paycheck to go into a separate high interest (1.15%!) savings account. Now that potential house downpayment money is growing by $600 dollars + a little interest each month without me even thinking about it OR having easy access to it. If $600 is a lot, start with $50 per paycheck and sock it away automatically.

    1. Winnie MD

      That’s great advice Jess. I don’t know where you live, but in Hong Kong we have automatic security deposits so instead of just putting it in the bank for interest you can put the extra money into stocks. You should look into it with high yield stocks.

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