Personal Finance

Ten rules of wealth

“You have to learn the rules of the game and then you have to play it better than anyone else.” – Albert Einstein

When I travel by plane, there are a few treats that Ilike toindulge in at the airport. In the past, when plane travel was a rare event for me, part of my process for getting in the vacation spirit was to treat myself to a new book at the airport and enjoy it along with a fancy coffee while I waited for the plane. Nowadays, because I travel by plane several times a month,I usually save the treats for vacation travel. (If I didn’t it would cost me a small fortune!) Last week though, I made an exception because a small, gold covered book caught my eye as I wandered through the airport concession stand.

Richard Templar’s “The Rules of Wealth” is a book with short, bite-sized chapters.This made it perfect for the plane because it was easy to pick up and put down between naps and snack breaks. The book is divided into five sections: Thinking Wealthy; Getting Wealthy; Getting Even Wealthier; Staying Wealthy and Sharing Your Wealth and each section containsseveral “rules” that are intended to help you improve your ability to earn, hold and grow your money. Many of them are straightforward and seemingly simple but, as anyone who has stumbled along the financial management path will tell you, simple definitely doesn’t mean easy.

There are 107 rules in total and I chose ten to share with you:

Rule #8: Wealth is a consequence not a reward

Every action has a consequence. If you’re wealthy, chances are, it’s as a result of your actions. As Templar points out, “if you work hard at making money, you stand a better chance of being rich.” He suggests that money is a payment for clever thinking and hard work,rather thana reward for good behaviour. Often we make money a moral issue; evaluating the wealthy in terms of whether or not they deserve to be rich but the reality is that the vast majority of wealthy people have money because they worked to accumulate it. If we want to grow our money, we need to work at it, it won’t happen by accident.

Related article: The key to implementing your financial goals

Rule #16: Know the difference between price and value

What something costs and what its value is perceived to be can be dramatically different. When I lived in Ontario, I drove a 1998 BMW. It looked pretty and drove really nicely but only cost me about $2500 when I bought it in 2012. Based on its price, the 14 year old car was a beater but to the people who saw the BMW decal on the hood and all the little luxuries inside like heated, leather seats and automatic everything, the value of the car was far above its $2500 price tag. Similarly, there are items which cost a lot but, if someone isn’t willing to pay more for them, they can’t be sold for a profit (antique diamond engagement rings for example!). The price of something can be far less than it’s actual value to you or someone else, or far more. It’s important to be aware of that.

Rule #62: Have a set time of day to work on your wealth strategy

This rule intrigued me. It builds on the idea that wealth is a consequence and is based on Templar’s observation that many of the wealthy people he has encountered and interviewed tend to work on their financial planning at the same time each day. Having a routine gives them time to enjoy life and also helps them keep their plans on track. It helps them break down their plan into manageable chunks and work on them a piece at a time, which makes the big goals less overwhelming.

Rule #68: There are no secrets

I love this rule! There are so many ads online at the moment promising ultra fast solutions to deep rooted problems and the only people profiting from them are the people offering the impossible. As Templar points out, “no one but you is going to make you wealthy”. Wealth is a consequence of action and good choices. Trying to take shortcuts tends to backfire and often leaves us worse off than we started. Far better to adopt the basic principles of money management and wealth building and then apply them consistently until you hit your goal.

Related article: Building wealth is simple, not easy

Rule #75: Know yourself: Solo, duo or team player

Part of successful goal setting is anticipating the potential obstacles that lie between you and your goal. Some of these obstacles are external but many of them are internal. Knowing yourself, your strengths and your weaknesses is important when it comes to planning for success. If you know that you thrive as part of a team then it’s only logical that achieving success as a lone entrepreneur is going to be challenging. Conversely, if you worked well alone or with just one other person, any venture that involves a team is not going to bring out the best in you. Taking the time to figure this out early can save you time, money and stress.

Related article: Who is your money mentor?

Rule #86: Don’t follow the same route as everyone else

I believe very strongly that each one of us has our own path to follow through life and that just because our goals or dreams don’t match with everyone else’s doesn’t mean they’re wrong, misguided or foolish. Many wealthy people became wealthy because they thought differently from others and weren’t afraid to stand out from the crowd. Each of us has to make our own decisions, weigh up our own strengths and challenges and trust our own instincts. Sometimes it makes sense to run with the herd and sometimes it doesn’t. However, if you choose to walk a different path from those around you, be prepared for the fact that you’ll inevitably encounter a lot of criticism, resistance and even ridicule before you find success. Don’t let that stop you!

Rule #95: Know when to stop

Wealth builders tend to be focused and driven and, by necessity, they have to stay that way over a long period of time in order to achieve success. Whenever you’ve worked at something for a long period of time, it tends to become a habit and habits can be hard to break. However at some point in your wealth building journey, Templar reminds his readers, there will come a time to stop building and just enjoy the fruits of your labours. It’s just as important to plan the “end game” after the goal as it is to plan the route to the goal itself. For many people, philanthropy and charity play an increasing role as wealth grows, for others it’s about experiences and family. Whatever your end game will be, make sure you plan for it and that you embrace it once you reach it.

Rule #102: Don’t overprotect your children from the valuable experience of poverty

I’m not a parent so passing out parenting advice isn’t anything I’m remotely qualified for. However, as a teacher, tutor and doting aunt it’s pretty apparent to me that most parents want to protect their children from all the nastiness of the world and this includes going without. Unfortunately, we can’t learn to be grateful without some awareness of what not having things feels like and we can’t learn to stand alone without being left without support. Many teens learn their money skills when they go to university and have to manage alone for the first time. Some thrive, others fall. For me, I know my hardest and most valuable lessons came when my parents said “no” to bailing me out of a tight spot and I had to figure it out on my own. I didn’t like it at the time, but looking back on it now, I know I’m much better off now as a result.

Related article: Teaching financial responsibility to kids

Rule #105: Take responsibility before you take advice

No one should care more about your money than you do and no one should have more control over it than you do. Many people lose their wealth because they place their trust in the wrong people or because they let others control their spending because they’re not paying attention. As your wealth grows so does your responsibility to manage it wisely. This means paying attention to it and being very careful about whose advice you ask for and whose advice you take. Templar’s observation is that shrewd wealthy people “don’t hand over anything unless they are really, really sure of their advisors” and that seems to me like really good advice!

Related article: Take Control of your money

All in all, I enjoyed this book. It reminded me of some things I knew but had forgotten, some things I know but don’t do and introduced me to a whole pile of different ways of approaching the wealth game. Templar is British and this book was originally published in the UK so there are references to pounds rather than dollars and a few words that might get lost in translation but neither of these detracts from the value of the overall message. Some of the rules I didn’t agree with and there’s a direct (some might saypatronizing)”tone” to some of his comments that may rub some people the wrong way but I chose to find them amusing rather than annoying which helped!

What do you think of the ten rules I shared this week? Do you have wealth rules that have worked for you or others? As always, I’d love to hear your comments!


  1. Claude Mayrand

    Rule #8: Wealth is a Consequence not a Reward

    I think this highlights how many people view their retirement income. Something they’re entitled to as an entitlement at age 65, something automatic that they’ve been promised.

    I am one of the 60% of Canadians who never had a company or taxpayer funded pension. When I was starting out, I learned of someone who lost their company pension because the company went bankrupt – I don’t remember any other details.

    So building retirement capital was always a part of my budget (I use the term loosely as I’m not very disciplined), and therefore has never been a reward per se, but a conscious effort.

    I’m looking forward to your next installment; I like the point of view of this author.

  2. Dezinerdug

    Same BMW strategy worked for me. Built our own homes slowly as the cash allowed. Saved 100% of the wife’s salary when first married. No mortgage. Used cars for 30 years. Always bought bonds no stocks. No pensions but retired at 56. Now 71. The tax rules are cruel for no pension people.Stopped smoking 45 years ago and still make our own wine. 4 kids and 7 grandkids.
    No one understands the beauty of frugal today.Too bad for them

    • Claude Mayrand

      You’re so right about frugal attitudes. I decided to stop working at 56, the pay was so bad. Eventually learned about Dividends and now am quite well off and paid 2.34% in 2014 (T1 line 435/260).

      As to the tax rules, look into Closed End Funds. Some pay monthly tax-advantaged cash. Bonds used to be a good idea but the tax treatment is sinful and the actual quarterly returns are miserable – many don’t even keep up with the real inflation rate which is way higher than what CPP & OAS use.

      Look at (free), hover on RESEARCH, under Summaries click on Closed-End Funds

      You’ll find there are 213 listed on the TSX.

      Search also possible in the Stock Screener; you’ll need to Add New Criteria for Dividends.

  3. Patricia Gass

    Well written and excellent choice of rules!
    Very much focused on behaviour and critical thinking skills rather than math and numbers- couldn’t agree more!
    Developing smart money habits are critical for wealth building; often more so than earning a larger salary. My own favourite strategies are really paying attention to where/what I spend money on, aligning my spending with my goals and following a well thought out savings/investment plan. And, of course, doing it all in a tax smart way.

    • Claude Mayrand

      Patricia, I use the word allocate rather than savings for the reasons you mentioned. Words help focus “behaviour and critical thinking skills”; saving seems misleading to me, too general, as we’re not getting a discount on a grocery item but taking part of our after-tax income and willfully re-directing it to our investments and retirement capital.

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