Money Mastery's 10 principles
http://www.moneymastery.com/AboutUs/10principles.aspxPrinciple 1: Spending is Emotional. This means that money is more about emotions than it is about math. If spending were simply a mathematical problem more individuals and families would not be consuming more than they make and would be far wealthier than they are. If you do not decide to systematically control your money, you will emotionally consume your future and the opportunities it can offer. Spending money almost always has a powerful emotional impact on your life, whether you realize it or not.
Principle 2: When You Track Your Money, You Control It. Corporations are required to track spending and assets, yet individuals are reluctant to take the time to track and control their personal spending. People who do track find they are wasting, on average, at least $312 every month that they could be applying to savings or using to pay down debt. Planning how to spend, and spending according to a plan is the key to becoming wealthy. To any responsible person, this should be the only option.
Principle 3: Savings Is Actually Delayed Spending. Wealth and security depend on how you spend, not on how you save or on how much money you make. There is actually no such thing as "savings" because every dollar is to be spent — what matters most is how you spend it. This principle points out that you have to "spend" money each month for your future by paying yourself first. People who pay themselves first add at least an additional $302,000 to their retirement savings, while many find much, much more.
Principle 4: Power Down Your Debt and Power Up Your Fortune. Most people don’t know the difference between “good” and “bad” debt. This principle, which is powerful and dramatic, teaches the difference between good and bad debt and how to get out of bad debt as quickly as possible. By applying this principle, it is mathematically feasible for anyone, no matter how bad their debt-load is, to get completely out of debt in nine years or less, including a 30-year mortgage. Why not become debt-free and pay yourself compound interest instead of giving it to creditors? Then without taking on any additional risk or needing any more money you can not only be out of debt in 30 years, but out of debt with a million dollars in your pocket!
Principle 5: Know the Rules. This principle teaches that you do not need to know everything financial but you do need to know where to go for information that is important for you — that means reading and understanding all contracts you enter into and relying on financial mentors and professionals as needed. In today’s world of easy credit many people feel they are entitled to play very complex financial games, like owning a credit card, without paying the price to learn the rules of that game. Ask questions! The answers could be worth thousands of dollars to you.
Principle 6: The Rules Are Always Changing. Recently the IRS implemented 1,200 changes in one year to the U.S. tax law. This illustrates that things are always changing financially and that you must be able to cope with those changes. You must be capable of moving with change, always open to learning new information that can be vital to your future success. Otherwise, you will face consequences that could force you to work many years beyond the point that you want to. If you understand (and respect) this principle and use it to adjust to changes in your own financial situation, it can help you shave years from your working life!
Principle 7: Always Look at the Big Picture. In the absence of long-term goals you will make financial decisions you cannot afford. With specific goals clearly in mind, you will make spending decisions today that will not only bring happiness to you now, but that will build a happy life for the future. You cannot become wealthy without first “Master Planning” you life by looking at where you are now, where you want to go in the future, and figuring out a plan to get there.
Principle 8: Organizing Your Finances Enables the Creation of Additional Wealth. Disorganization breeds procrastination which leads to lost opportunities. Organizing your finances means knowing where important documents are, having an estate plan for your loved ones, and knowing how to protect your assets from over-taxation, litigation, and theft.
Principle 9: Understanding Taxation Enables You to Retain More Money. The easiest way to earn more money is to keep more of the money you already make! That means giving the IRS what it expects only when it is due and no more. Tax refunds are mythical benefits that come at a great cost to American families. Don’t be fooled by this myth and countless others. Knowing the real rules about taxation will free and empower you.
Principle 10: Money in Motion Creates More Money. This principle is a combination of applying each of the other nine. This principle is where wealth is truly built and accelerated (but only when the other nine principles are clearly understood and applied). If there is one single strategy that builds wealth and financial security the fastest, it is understanding the “leverage” factor of Principle 10 and how to get your money to do more than one thing at a time. The banks do it and so can you!
