Great money rules to live by

Posted by Maneesh Sethi :: September 27, 2007 @ 10:59 am

CNNMoney recently published an excellent article on money rules to live by. The author wrote 20 tips based on the wisdom of some of the best investors, inventors and risk-takers of all time—so these are tips that have been tried and tested for hundreds of years. I've been recommending most of these rules since I began writing for the Lending Club blog.

Some of my favorite tips are:

#7 - Practice patience

#14 - Just do it

#3 - Have an emergency fund

These tips, when followed correctly, are your bet to become wealthy and grow your income.

It's always important to keep in mind that these are rules of thumb, but not requirements. If you notice, by reading these tips, there is a common theme running through them: invest your money for the long term, and try to be average--don't try to beat the market. If you try to spread your investments in multiple markets, finance your IRAs as best as you can, fund your accounts consistently, and be patient, your money will grow--almost guaranteed.

The best way to lose in the market is to believe that you are smarter than everyone else and to try to time the market. Your chance of knowing more than everyone else is almost nil---your financial future is better safe than sorry.

Of course, don’t be too safe. Don't invest only in bonds, put some of your money into stocks and index funds, and invest in some P2P loans on Lending Club. If you are willing to be risky, take some small risks. Just don't bet your entire portfolio on the stock tip you received in your email this morning.

Which tips are your favorites?