5 Ultimate Money Rules for Wealth Building, According to Financial YouTuber Tae Kim
Written by
Joel Lim
Edited by
Ashley Barnett
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Tae Kim, founder of the website and YouTube channel Financial Tortoise, has released a YouTube video offering his 10 Ultimate Money Rules. Here are the top five pieces of advice.
This breakdown allows those just starting to improve their financial health to get started. It won’t overwhelm you; you can follow up with his video to hear the full 10.
1. Hold 6-Months of Cash
In this first tip, Tae discusses the inevitability of emergencies. You may be a great driver, but accidents happen. Your kid may be great at sports, but they busted their knee in soccer.
Things happen, and the last thing you want is to invite financial ruin by not being prepared. If you’re just starting out, you can build up to 3-months of your expenses in savings. Then, work your way up to 6 months.
2. Build Competitive Career Capital
One of the most important steps toward wealth is getting really good at your job. Whether you build houses, teach high school English, or sweep floors in a restaurant. Always work on improving your skills and leveling up.
This approach to your profession goes a long way toward making you more marketable and more hireable. You’ll be more likely to continue to make more money and work toward real wealth.
3. Reinvest in Yourself
This leads us to the next tip — reinvest your money in your skills, education, health, and family time. Money spent on these parts of life is never wasted and is always an investment. You might be paying for books to read on your profession or health. Maybe you’re paying for a gym membership.
Or, you could be spending money on a road trip with your family. These expenses make you wealthier, healthier, wiser, and happier, which is what life’s really all about.
4. Avoid Debt
Tae is one of the few financial experts who will tell you to avoid debt at almost all costs. Taking on credit card debt, car loans, and other kinds of debt may seem like smart tools.
In reality, those debts often allow us to justify spending more money than we should, getting us deep into debt. From there, as Tae says, we’re only “one paycheck away from financial ruin.” Of course, there are exceptions to this, but when it comes to most debts, including an expensive mortgage, they are best avoided.
5. Be Frugal
Finally, become known as a frugal person. According to Tae and many other financial experts, frugality is the true key to wealth.
The wealthiest people spend their money sparingly and only on quality items. You won’t see Amazon and Temu boxes arriving at their front doors every day. They spend money well under their means, invest it, and grow it. This, as the experts say, is the true, simple pathway to wealth.
Of course, there are many other tips for wealth-building and financial success, but these five are an entry point. Begin by saving for emergencies, investing in yourself, staying out of debt, and being frugal, and you’re already more than halfway there.
More From GOBankingRates
