šŸ§ 18 money rules I live my life by

Save Hours Each Month & Avoid Decision Fatigue. Craft Your Own Money Rules
Dexter Zhuang
Dexter Zhuang
September 3, 2023

Money rules help simplify my day-to-day choices.

ā€Today in 10 minutes or less, youā€™ll learn:

  • šŸ¤” Why create money rules at all?
  • ā­ļø 18 money rules I use to guide my life
  • šŸ§‘ā€šŸ’» Money rules from a Harvard-trained economist
  • šŸ§  Exercise: Craft your own money rules (+ Example)

Are you the founder or owner of a remote business?

Iā€™m looking to chat with founders about their business challengesā€”hiring globally, automating operations, and managing distributed teams. Iā€™d greatly appreciate your help and would owe you lunch!

Sign up for a time slot here:

Schedule a call

FROM OUR PARTNERS

ā˜•ļø Wake up to Morning Brew: Your Daily Shot of Business News

Tired of scrolling through endless news and still feeling like you're missing out on the latest business developments? šŸ˜µĀ 

Look no further than Morning Brew!

They know your time is valuable, so they carefully curate the most relevant and important news stories from around the world, and present them in a fun, engaging, and free newsletter.

Whether you're a seasoned entrepreneur, a budding investor, or simply someone who wants to stay up-to-date on the business world, Morning Brew has something for you.

Join over 4 million people who start their day with Morning Brewā€™s newsletter and discover why theyā€™re the ultimate source of business news.

Sign up now and never miss a beat.

ā­ļøĀ 18 money rules I live my life by

I think every person should create rules of thumb on spending, saving, and investing.

Hereā€™s why:

  • Simplifies choices. In a busy modern life, this helps with guiding daily decisions.
  • Rule of thumb, not absolute. These rules are meant to be signposts, not a stern schoolteacher. Youā€™ll always encounter exceptions.
  • Unique to you. Writing your own rules helps you take responsibility for your own life. You can (and should) design these rules to reflect your personal values.

Here are my own rules:

ā€

āš–ļø 18 money rules I follow

  1. Prioritize time spent on fulfillment, instead of optimizing the numbers
  2. Start with a long-term financial goal. Then work backwards to your annual milestones
  3. Marry the right person
  4. Run a monthly money review as a couple
  5. No limit on spending for your personal growth and health
  6. Be able to pay in full for larger expenses (eg honeymoon) before spending
  7. Buy the best and keep it for as long as possible
  8. Always have a 6-month emergency fund
  9. Max out your tax-advantaged account contributions
  10. Take advantage of employer matching (free money)
  11. Save/invest 30%+ of your gross annual income
  12. Don't try to time the market or pick the right stock
  13. Pay careful attention to high fees
  14. Wait 48 hours before making a big investment decision
  15. Focus on long-term investment periods (in years)
  16. Pay your credit card in full each month
  17. Avoid taking on high-interest debt or leverage
  18. Earn enough to work with only people I respect and like

ā€

šŸ§‘ā€šŸ’» Money rules from top personal finance writers

Hereā€™s a few money rules I curated from other writers and enjoyed.

Harvard-trained economist Laurence Kotlikoff wrote unconventional rules for education:

ā€Donā€™t borrow for college. Itā€™s far too risky and expensive. I donā€™t say this lightly. Iā€™m a college professor. But you can get a fine education without mortgaging your future and potentially dashing your career plans.

It simply involves pursuing scholarships and applying to less expensive, if generally less prestigious, institutions.

If your parents are borrowing for your tuition, discuss who will repay.
And consider whether theyā€™re blowing your inheritance or sacrificing their welfare by ā€œhelpingā€ you attend an unaffordable college.

Morgan Housel, author of bestseller Psychology of Money, shared a few thought-provoking rules on mindset:

Money makes it easy to mistake optimism (good) with gullibility (dangerous) and overconfidence (disastrous).

The formula for how to do well with money is simple
. The behaviors you battle while implementing that formula are hard.

ā€œSave more money and be more patientā€ is too simple for most people to take seriously
, but itā€™s the best solution to most financial problems.

Steve Cronin, founder of DeadSimpleSaving.com, a personal finance community for expats, suggests keeping your time spent managing finances to a minimum:

Once you put all your finances into a spreadsheet, it should only take four hours a year to manage it all and to invest monthly or quarterly.

Ramit Sethi, author of New York Times bestseller I Will Teach You to Be Rich, says:

ā€˜Unlimited spendingā€™ in one category.

ā€œOne of my personal money rules is unlimited spending on health, on books and on friendsā€™ fundraisers,ā€ Sethi says. ā€œThose are important to me.ā€ [ā€¦]

Sethi says he always books business class for flights longer than four hours,
as another example.

ā€

šŸ§  Exercise: Craft your money rules (10 minutes)

Now itā€™s your turn. Time to pull out your Money Rules Canvas (see below), Notion doc, or journal.

You can use these guiding questions for reflection, then design your money rules accordingly:

  1. What are your core values? Life goals? (if you donā€™t know your values, here is the exercise I used to do with clients)
  2. How does money help you express these values? Move faster towards your goals?
  3. What rule of thumb would help you ensure you are planning, spending, saving, and investing money in accordance with your values and goals?

Hereā€™s a few guidelines:

  1. Keep it simple. The true test is if you can recall how to apply the money rule in a few minutes on a random Sunday.
  2. Test against reality. Imagine real financial decisions you had to make in the past month. Would your rule have helped you make the decision faster? Or make a better decision?
  3. Donā€™t be too rigid. Your rules are guiding principles, not a damn dictatorship. Itā€™s OK to have exceptions. For example, my #5. I love credit cards with airport lounge access, but I donā€™t care as much driving the fanciest car.

ā€

šŸ‘‰ļøĀ Get the Money Rules Canvas Template. If youā€™d like to use this brainstorming whiteboard, then click here to copy the Canva Template.

šŸ’ā€ā™‚ļø Example response

Hereā€™s how I would response to these questions:

  1. What are your core values? Life goals? (if you donā€™t know your values, here is the exercise Iā€™ve done with coaching clients)
  2. Core values = relationships, adventure, curiosity, freedom, courage
  3. Life goals = financial independence, creating life-long memories with loved ones,
  4. How does money help you express these values? Move faster towards your goals?
  5. Money helps me express my value of ā€œrelationshipsā€ and goal of creating life-long memories with loved ones ā€” through funding trips to novel destinations with close friends. Even 10 years after a trip, my friends and I still fondly reminisce about the experiences and stories we shared.
  6. What rule of thumb would help you ensure you are planning, spending, saving, and investing money in accordance with your values and goals?
  7. ā€œPrioritize time spent on fulfillment, instead of optimizing the numbers.ā€ Even though Iā€™m spending instead of saving money to fund these trips, Iā€™d rather not stress about optimizing for the dollars I can save with each flight and accommodation. Instead, Iā€™m focusing on ways I can create an even more memorable experience (sometimes through spending).

Now itā€™s your turn.

ā€

šŸ—£ļøShow and tell us your money rules

It feels good to see these rules written down on paper, doesnā€™t it?

Iā€™d love to hear your favorite money rules.

šŸ‘‰ļø Reply to this email and Iā€™ll feature three of your responses in the next newsletter!

šŸŒĀ Beyond your borders

Linkedin Economists report the pace of hiring decline across markets slows down in July (link)

20 most profitable old freehold SG condos in the last 10 yearsā€”average of $500k profits (link)

UAE announces: More than 80 nationalities can enter UAE without prior visa (link)

HBR reports that remote work isnā€™t going away ā€” and US executives know it (link)

Chinese investors are investing more in offshore fundsā€”not only HK, but also US, Japan, and emerging markets like Vietnam and India (link)

Czech Republic launches a Digital Nomad Visa (link)

Find out why entrepreneurs read Get Ramen to get their next business idea and stay up-to-date on business, marketing, and more šŸœ Join Free ā†’ (link)*

*this is a sponsored link

šŸ“†Ā How I can help

Thatā€™s all for today!

Whenever youā€™re ready, hereā€™s how I can help you:

1. Monetize Your Expertise (free) - Click here to receive my free, 5-day course teaching you the foundations of monetizing your expertise outside of your day job.

2. Part-Time Consulting Launchpad - Click to join the waitlist for my January 2025 cohort. This teaches the system I used to earn 6-figures from my consulting side hustles taking 10 hours/week.

3. Tools I use and recommend - Discover my favorite tools for my personal finances and remote business.
ā€
4. Promote yourself to 6,000+ high-performers by sponsoring my newsletter.

If you liked thisĀ post, you'll LOVE my newsletter

Every week, get a free 5-minute deep dive on money, portfolio careers, or life design in your inbox:

Dexter Zhuang

Dexter is the founder of Money Abroad, an online education platform that helps people shift from "live to work" to "work to live." He writes about money, portfolio careers, and life design. Starting his career in San Francisco, he has lived and worked across Southeast Asia and Latin America for the past 6 years. He has 10+ years of experience building products and teams at public companies (Dropbox) and scaling startups (Xendit). His work has been featured in global outlets like Business Insider, CBS, US News & World Report, and Tech in Asia. He graduated from Dartmouth College.

Continue reading

šŸ§ How to Write a 2024 Annual Review
Personal Growth & Reflections

šŸ§ How to Write a 2024 Annual Review

INSIDE: Free Notion Template, 6 Essential Questions for Personal Growth, Actionable Insights for 2025
šŸ§ 5 Ways to Automate Your Finances
Manage Finances

šŸ§ 5 Ways to Automate Your Finances

INSIDE: 5-Part Money System, 3 Automation Tools, International Transfers, Investing, Bill Payment, Family Accounts, Business Finance
šŸ§ 4 Portfolio Career Paths (+14 Real-World Examples)
Start a Business

šŸ§ 4 Portfolio Career Paths (+14 Real-World Examples)

INSIDE: 14 Real-World Case Studies, Why Portfolio Careers, Benefits & Trade-offs, Which Path is Right For You

Want to live and work on your own terms?

Join over 6,000 people getting my best insights on money and portfolio careers every Sunday.

I'll send you my Top 10 All-Time Newsletters as a thank you:

Search

Enter keywords and click search.