Toy train

It’s easy to lose sight of the simple things when it comes to finances. More often than not, we start to focus on complex strategies for growing wealth or try to get involved in the latest fad. The reality, though, is that the foundation for long-term wealth is built from the basics. That’s why it makes sense to remind ourselves what we usually believe to be obvious sometimes.

Before you get too advanced, have a quick read through these five basic rules for growing your wealth over time and make sure you are following all of them.

1. Earn More Than You Spend

This is the foundation of all financial advice. Let’s be honest: if more people were following this piece of advice, we wouldn’t have nearly as much debt. Everyone “knows” that you should earn more money than you spend each month. Duh! It’s one of those things that seems to be easier said than done though.
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gym membership

Your gym membership would probably never cross your mind as a bill that could negatively affect your credit report, but maybe you should add this monthly obligation to the list of things to stay on top of if you are thinking about getting a loan soon. While your monthly gym membership payments aren’t going to show up on a report with the three major credit bureaus, your failure to cancel your membership could, in fact, ruin your credit. This could go for other monthly services that you sign up for as well.
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Mortgage rates continue to be temptingly low. In fact, the topic of historic low rates is published from major publications every day these days. Now certainly seems like a good time as any to refinance your current mortgage, but before you make an appointment with your lender (that’s if you can get them to return your call these days), take the time to ask yourself the following questions. They will help you determine if refinancing is a good idea or a potential financial disaster.
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One of the things that many of us aspire to be is, surprisingly, average. We want to have the same things that those around us have. (Or at least, have the same things we think those around us have.) This is natural. We all like to feel as though we belong.

However, it’s not always best to be average — especially when it comes to money.

After all, do you really want to spend money on something just because someone else is? Do you really want to buy something just to maintain appearances?

Average = Debt

Even though the pandemic bumped up the savings rate and reduced the debt levels for many people, there’s still quite a bit of debt out there. On average, the American household has tens of thousands of dollars in credit card debt.

The average American borrows to pay for college, to buy a car, and to buy a home (not to mention borrowing for other things, like furniture, vacations, and weddings).
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Whether she intended to or not, your mother spent your entire childhood imparting crucial financial wisdom to you — if only you’d listened to her.

Yes, sometimes she wasn’t even specifically trying to teach you how to manage money. But make no mistake. Even her words of wisdom that seemed to have nothing to do with finance were laying the groundwork for you to have a good handle on your money. Moms are that smart!

Make sure you thank her if you ever heard your mother tell you one of these old sayings. Without even knowing it, these words of wisdom gave you an excellent financial education.
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Wow! Volatility is back in a big way almost as soon as I wrote this piece. I try to write a little ahead, and I thought about not publishing this because markets are no longer going straight up. But then again, what better way to drive home the point of how stocks don’t always go up than when stocks are actually down a little?

What do you think? Did you feel any different a couple of weeks ago when stock values made you feel wealthier? Here’s what I thought you should’ve been thinking about a few weeks ago when stock prices seem unstoppable.

One of Warren Buffett’s most memorable quote is “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.” But when the market keeps going higher, you could argue that there’s a more appropriate one for the masses.

You are never as rich as you think you are in a bull market.

The significant push higher lately has been nothing from breathtaking. April was a big month after recovering a bit from the March lows. Then you’d think the momentum would slow down in May but that came and went with another serious gain. June did slow a bit but the markets were still positive. Then it was July and we were off to the races again. And what happened in August? The S&P 500 notched its best return in August since 1986. In fact, the S&P added 35.4% since April, and that five month record was the best since 1938!

Volatility’s picked up a bit in September, but it’s almost difficult to not have made money with any stocks or stock funds you bought in the past five months.
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