My Two Rules for Getting Rich

Carter’s Simple Rules

1. Spend Less Than You Make

2. Invest In a Total Stock Market Index Fund

… and that’s it! It doesn’t need to be any more complicated than that and it really is that easy.  

You can stop reading and go on with your life after this major wisdom drop. Think on it for a while. If you have time, I broke it down much deeper so keep reading or come back and read later.  


People become confused because there is an endless supply of investment choices, because we all want a short cut; We all believe we can do it faster and better, that you’re going to be the person to beat the average, the next Warren Buffet who can pick the stocks.

I was just talking to someone last night who purchased a stock on a huge dip. I asked why. He told me that company X was sure to go back up.  

It hasn’t yet. It might, but that’s gambling, not investing.

Which Funds should I choose?

Pick Fidelity’s: FZROX or Vanguard’s: VTSMX or Schwab’s: SWTSX

Those are the three most common, low fee, total market funds that you’re not going to go wrong with. Now if you have a 401k and these are not available (and most likely) pick a fund that follows the total market, or S&P 500 or something on those lines.  


You will always be invested in the top companies (even if it’s a total market, they weight the top companies heavier), so when you hear about company X going up – they’re making you money. Jeff Bezos is now technically working for you! How cool is that?

Why not International? Bonds? Annuities?

You don’t need to do anything else. The total market fund will have you invested in companies that are international: Coke, Pepsi, Google, Amazon, Phillip Morris, the list goes on and on. These ARE international companies.

Bonds? We’re not in a good market right now for bonds. Unless you’re retired and no longer making money, they’re not a great investment for accumulating wealth. As interest rates go up, your bond value will go down.  

Individual Stocks?

Don’t even think about it. Not until you’re on the right path and have some extra money above and beyond you path you’re on. If you must and you want to dabble don’t do it with retirement money, use an app such as Robinhood to purchase individual stocks for free. But we need to crawl before we walk, and walk before we run.  

If you’re credit cards are all paid off and you’re retirement accounts are all maxed out, then you may dabble. Until then, you’re still crawling.

Spend Less Than You Make

Saving for your future is also a two step process. The easiest way to achieve this is to pay yourself first. What I mean is, make sure you save money first and then learn to live off the rest that’s left over.

If you have a 401k, you need be in it and be at least putting in enough to get your companies match. That’s a corporate benefit you should be using and getting if it is available to you. Ideally you should be putting in 10 to 15%. If the investment choices are poor (as some are sadly set up that way), at least get the match, and open up a RothIRA and put in money there.  

You must invest in yourself first.  

Credit Cards

We’ve all been there, including your’s truly. The issue is that these cards allow us to purchase ahead of our means and allow us to make those impulse, must-have purchases now instead of saving for it. I mean, it’s huge sale and I’ll save $20 if I buy it today. I don’t really need it now, but I’m going to save $20!

Unless you’re paying them off every month, any “benefits” like cash back from the card isn’t being used correctly and you’re most likely losing out to either the interest on the card or the fact you don’t have money in your wallet you might actually need.  

So if you’re in debt and not able to get out, put every penny (You should still put in the minimum to your 401k to at least get the match) you have into paying down that debt. There is no point trying to invest while in consumer debt.  

Unless the money is in your account, do not use the cards. You must resist the temptation. It may also be a deal at the store, but wait a week. If you still must have it, use cash, but many find that if you wait a week, your impulse to purchase goes away.

Sadly credit cards are an easy way for us to spend more than we make.  

Have an emergency fund?

The lack of an emergency fund is another way that we end up spending more than we make. Many of us tend to count our chickens before they hatch. In other words, even if we save first, we will have every dollar of the paycheck spent. Side effects of credit card usage, life, and making needed or even un-needed purchases.

But what happens when something unexpected happens? A flat tire? An engine light? Kid needs to go to the doctor? 

The paycheck money has already been spent and now you’re asked to come up with more. Back to the credit card! Back in the hole.

This is why everyone should have an emergency fund. You’ll hear $1000 tossed around as an immediate number and easy round number, and while I agree with it, having as little as $500 cash will get you out of most small issues that come up.

Do you really need to own it?

Learn to stop consuming just because you can. Most of us have TV’s we own, but never turn on, put in a room that “had to have one in it”. More shoes than we can wear, more coats hanging up than I’ve worn in many years. I don’t care that it was on sale, or was a deal you just couldn’t pass up. It was money that didn’t need to be spent.  

Look around your house at all the clutter and items purchased. I look at my kitchen gadgets, realized I used them once, they were a pain to clean and frankly a simple frying pan would have worked for what I needed anyhow.

This goes back to the earlier sentiment on not using the credit card, wait to purchase the item and really think about it and if you truly need it.

We are bombarded by advertisements and even I have succumbed to the web or instagram ad where I saw a product that I then purchased… And then never used. Money wasted.

Don’t just save more, Make More!

There will always be a place to cut and save money. Cut the cable to go to Directvnow. Change your wireless plan to one that costs you very little. Call up and downgrade your internet, most of us are using high speeds we don’t really need. Stop eating out, etc, etc.

All those pale in comparison to you going out and making more money. Jobs are abundant right now and labor scarce. You’re worth more whether you know it or not. Ask for a raise, but go in showing them why you’re worth the raise, don’t just ask for one. Are you doing more than your job title is asking you to do? Working at next level work? Time for a raise or promotion!

If not there are many companies willing to pay you more for your hard work and there has been no better time than now to look. Sure, it’s nerve wracking to think about leaving your comfort zone… but now think about making $20K or more just by doing the same job at another company! So get out there and look!

So that’s it for Carter’s Simple Rules for Getting Rich. The rules are simple, but the roadmap is complex. We are all different, different places in our lives, different ages, different situations.

1 Comment

  1. Two things:

    1) If your company doesn’t match your 401k, what percentage would you put in there?
    2) CryptoCurrency: Investment, gambling, too soon to tell?

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