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Adopt the Seven Practices of the Rich

about a year or two, but for the long term. This is actually much easier than it
sounds, given the performance of the S&P 500 over time. Establish an AIP
based on your level of investing expertise, but as your knowledge and experi-
ence grow, evaluate how to enhance your returns.
Also, be willing to spend some time actively managing your investment
portfolio. How much time? About four hours a month. Give your invest-
ments some attention, and you’ll be well on your way to building wealth. If
you are more advanced, continue doing what you are already doing.

Pay Attention to Your Money

Many people have very little idea where all their money goes—all they know
is that they don’t have enough. When they look at their fi nancial situation, they
realize they should have more money left at the end of the month than

they do. If you find yourself in this situation, try this experiment: For the next
30 days, write down everything you spend. I know that sounds like a lot of

work, but it really isn’t. Just jot down the figures, and add them up at the end
of the month. This will impose a certain amount of accountability on your
personal fi nancial practices.
Think about it in bigger terms. Could a public company survive if it didn’t
account for 10 percent to 50 percent of its income each month? Yet, that’s
what most families lose every month because of careless expenditures. They
just spend and spend, without knowing where their money goes. Most fami-
lies don’t follow this simple, but critical, step of tracking their money. Make
sure that doesn’t happen to you. Know exactly where your money goes.

Adopt My Automatic Money System

Following this practice is key to building wealth. I discovered that all wealthy
people have some kind of money system they use. My Automatic Money
System is a tool that helps you monitor and manage your fi nancial goals. It’s
not a magic wand, or a slave driver’s whip, and it’s simple and fl exible. With-
out one, you will have a very difficult time surviving fi nancially.

What would happen if a public company didn’t stick to any budget or
system to monitor and manage income and expenditures? They’d go out of
business, of course. Yet, that’s where many families are headed, and that is
tragic—and avoidable.

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