The 3 Fundamental Money Rules All Financially-Successful People Follow

Money is a curious thing. When you go after money like a goal, it punishes you. Piles of crap later, you inevitably feel like you’ll never have enough. Like you’ll never be enough.

Then some time passes, and the fear starts to change the contours of your face and your relationships. You become a hollow container of energy walking around, generally leading a spiritually unsatisfying life, attracting relationships that reflect your inner confusion.

Sound awful? It is. If you’re looking for a fulfilling financial life long-term, here are some simple but effective rules to live by.

1. Building Wealth Is About Less, Not More

The Pareto Principle, or what we often refer to as the 80/20 Rule, applies to building wealth as much as it does to anything else.

20% of your investments will drive 80% of your wealth, e.g. your house, a few winner stock picks like Amazon or Chipotle.

20% of your unnecessary purchases will represent 80% of your budget shortfall every month, e.g. eating out every night, a fancy gym membership, or clothes you don’t need.

There is an unequal relationship between input and output. 80% of your rewards are determined by 20% of your energy, time, and money. It is the law of the vital few.

When I was introduced to Greg McKeown’s work on Essentialism, I thought it was very apropos. Through his research, McKeown basically found that the disciplined pursuit of less led to success. More often than not, we’re required to let go of the idea that we can have it all before a long-lasting foundation of success can be built.

So your #1 job as your own financial steward is to focus, and weed out the unessential spending and investments. You need to hone in on your deepest desires, and align your financial choices with what you truly love and believe in most. And cut out the rest of the crap. All of it.

When you’ve stopped buying 30 brands of the same shade of lipstick or spending $40 a day on juice, your financial willpower begins to awaken and wield itself in powerfully effective ways. You can afford to invest. You can buy a house. You can take real vacations.

But first, you need to be okay with less. That’s the deal.

2. There Are No Perfect Money Decisions

The whole idea of financial perfection is perilous territory.

Perfection tends to be an outward-facing concept, driven by our need to please others. We want to seem a certain way, thus we buy certain things to symbolize the accomplishment we don’t feel enough of in our own soul. When you’re a perfectionist, you can’t let go of the past, and it ends up dictating your future.

When you’re a perfectionist, you can’t let go of the past, and it ends up dictating your future. When you’re a financial perfectionist, you do things like taking two hours out of your day to work out your budget down to the penny and miss a meeting that could change your career.

You agonize over your investment portfolio’s every move, worrying that it’s just not right, and make constant adjustments that end up changing the entire direction to something that satisfies you less than when you started.

Don’t be obsessive. Or you’ll self-sabotage.

3. How You Make Your Wealth Grow *Matters*

Your wealth is more than just about the money. True wealth-building opens doors for you.

If you’re a landlord and you’re cutting corners in keeping your property maintained because your money is more important than providing a decent place to live for your tenants, you’re valuing money before people. You are violating a fundamental law of nature.

After a period of time, you’ll eventually have a pool of tenants who treat your property with disrespect. They’ll need to be chased to pay rent on time. You’ll have higher litigation costs. Because like attracts like.

What if you were to maintain your property in a beautiful way, and treat your tenants the way you would want to be treated? Good people would want to live there. You’ll have created a certain kind of demand. Demand from people who tend to pay their rent on time and are honest caretakers of your asset, and people who never want to leave. There will be enough demand that you’ll be able to pick and choose your tenants as you wish.

Your cash flow would be steady, your maintenance costs would go down over time, and you would have very low vacancies that would translate to a high occupancy rate, a pillar for great quality income properties. You would reduce your financial risk of making new tenant agreements with people you don’t know all the time. Your stress would go down. You would be making money by putting people and their needs first.

If you grow your wealth by hoarding (e.g. refusing to tip people who have served you well), you make money in the short term, and everyone else loses. Eventually, you lose too.

If you build your wealth in ways that bring value to others’ lives, you are aligning your financial actions with purpose.

Financial wealth-building aligned with purpose brings the kind of wealth you can’t even imagine — and lasts a lifetime.

Jane Hwangbo is a former investment analyst and portfolio manager who founded Mission Over Money, a personal coaching program designed to change the way individuals see and interact with money. Visit her website or find her on Twitter.

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