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Why don't most people follow the first rule of wealth? Spend less than your receive

Most companies try their best to make sure we don't follow the first of the 3 Rules of Wealth, "Spend less than you receive", as they want our money.

Here's a story I told my kids to help them understand why most people don't follow this simple rule and what they can do make sure they do. This is one of stories from my book, Grandpa's Fortune Fables.

Richie Raccoon's Trip to the Village Story

On the Island of Pucha-Pucha, lived a man named Richie Raccoon. He was once the richest man on the Island as he was so good at finding gold. He would spend all his gold on nice clothes and nice meals.

After a while he wasn’t able to find any more gold on the Island. He was devastated as he had given away all the gold he had found before to pay for his fancy clothes and nice meals. Now he had nothing. Then one day, he came across a man named Wealthy Wallaby. Wealthy Wallaby had started planting a few seeds many years ago, he continued to plant seeds every day and now had his own forest. He would sell some of this fruit from the forest at the market to earn money. He also kept planting seeds so his forest would get even bigger and have more fruits to sell at the market. Wealthy Wallaby walked past Richie Raccoon and noticed he looked hungry. He took him to his house in his forest and gave him some food. Richie Raccoon was so grateful. Wealthy Wallaby told Richie all about how he started with very little but gradually grew his forest and now had everything he ever needed and the best thing was that the forest kept growing and producing fruit to sell even when he was asleep.

Richie Raccoon decided he was going to start planting his own forest. He offered to help Wealthy Wallaby build a new log cabin in exchange for a few seeds to allow him to grow his very own forest. Wealthy Wallaby agreed and even told Richie Raccoon of the best place on the Island of Pucha-Pcuha to plant the seeds to grow the biggest trees. After a hard morning of work, Richie Raccoon was excited to receive his seeds and start planting his forest. He started to go to the place Wealthy Wallaby told him about. As he was walking there, he went through the village that he used to go to every time he found gold, when there was still gold to be found. It had been many months since he had last been to the village. As he walked through the village, he saw his old friends. They assumed he was back as he had been lucky enough to find more gold. He told them that he hadn’t found gold for a long time but now had some seeds and was on his way to grow his own forest.

The Cake at the Bakery

He continued walking and was stopped by his friend Baker Bill. Baker Bill was the local baker. In the past, Richie would always go to Bill’s bakery to get one of his amazing Pucha-Pucha cakes. Richie stopped to talk to Bill. They went inside the bakery and Bill asked Richie if he’d like a cake. Richie told Bill he didn’t have any gold to pay and only had 10 seeds which he was going to plant. Bill said, “I know how much you must miss having one of these cakes. How about you give me 3 seeds for one piece of cake? You’ll still have plenty of seeds left”. Richie looked at the cake and couldn’t resist. As Bill said, he’d still have plenty of seeds left. He enjoyed his cake and said goodbye to Baker Bill.

The New Clothes

At the end of the village was the clothes shop which was run by Tailor Tina, one of Richie’s closest friends. Again, when Richie used to find gold, he’d always go to Tailor Tina’s shop to buy new clothes. As he didn’t desire fancy clothes anymore, he thought there was no harm in popping in and saying hello to Tina. He told Tina all about not finding more gold, meeting Wealthy Wallaby and how he was going to plant his very own forest. Tailor Tina was so happy for him. Then she said, “You’re not going to go planting in 'THOSE' clothes, are you? They’ll get ruined and the dirt will be so hard to get out. Do you have any proper clothes for planting your forest?” “These are the only clothes I have left!” replied Richie

“How about I make you some nice new clothes just for planting your forest? You can give me whatever seeds you have. Then when you next get some seeds, you’ll be ready to start planting in your new planting clothes and won’t have to worry about ruining the nice clothes you are wearing now”. Richie thought about it. He liked the sound of having some new clothes for planting as he pictured himself planting a lot in the future. He thought he could do some more work for Wealthy Wallaby to get some more seeds so it wouldn’t be much of a delay before he started planting his forest. He decided to get his new planting clothes and gave Tailor Tina his remaining 7 seeds. The next day, Richie went back to see Wealthy Wallaby to see if he could help with some more jobs to earn a few new seeds to start his forest. Wealthy Wallaby was shocked to see Richie in his new clothes. “I thought you were going to plant your seeds. Where did you get the new clothes from?” Richie explained his story. Wealthy Wallaby said he needed to be careful as he may never start growing his forest if he kept giving his seeds away. Just like he used to give his gold away. Richie assured Wealth Wallaby that he’d definitely plant his seeds this time. After a long day of work, Richie collected his seeds from Wealthy Wallaby and headed to the place he was told to plant them. As he walked into the village, he said hello to Baker Bill and Tailor Tina but told himself he couldn’t go into the bakery or clothes shop as he’d just end up giving away his seeds again.

The Deal of the Day

As he was about to leave the village, he bumped into Salesman Sam. Salesman Sam was holding two beautiful statues. “Wow - those statues look great!” said Richie. “Thanks – they are on sale. It’s ‘buy one and get one free’ at the Statue Store. The sale is only on for today! You should get your own”. “I don’t need any statues at the moment” said Richie as he explained his story about planting the seeds to grow a forest. “If you are going to grow a forest, you’ll have loads of seeds in the future. This sale is only on for today. By buying two statues today, you’ll be saving yourself from spending more seeds in the future as you’ll only need to pay for one statue rather than two!” Richie thought Salesman Sam made a good point. If he did buy two statues now, he’d actually be saving himself money. Like before, he thought he could always earn more seeds from Wealthy Wallaby later. Happy with his new statues, Richie went skipping home. The next day he went back to Wealthy Wallaby knowing that Wealthy Wallaby was going to ask about his forest and he’d have to reply that he’d still not planted any seeds yet. As soon as he arrived, he told Wealthy Wallaby about how he’d actually saved from using seeds he’d grow in the future by buy the statues on sale. Wealthy Wallaby asked him “Before you went to the village, did you think of buying any statues in the future? Or did it come to your mind when you heard it was on sale?”. Richie admitted it was only when he heard about the deal that it came to mind.

Find a new way to the village

Wealthy Wallaby explained to Richie that there will always be people offering you deals to make you give away your seeds. It can be really hard to avoid these. “Here’s what I recommend you do” Wealthy Wallaby started. “Instead of going through the village before planting your seeds, take a different route around the side of the village. Then once you have planted some of your seeds, you can walk back through the village. You can then use whatever seeds you didn’t plant to get the things you want from the village. This way you’ll always be planting some of your seeds. Just remember to plant at least 1 out of every 10 seeds before you go to the village!”. This is exactly what Richie did but it wasn’t easy. As he went to plant his seeds, he kept walking towards the village as he had always gone that way. He sometimes started walking into the village and then had to stop and turn around to make sure to go back and find another way. After a while he got used to going different ways and therefore didn’t have to think about going into the village until after he had planted his seeds. Soon enough, his seeds started to grow into trees. The trees started producing more seeds. He kept those seeds in his forest and continued to plant at least 1 out of every 10 seeds he was earning from helping Wealthy Wallaby. The End!


The 1st Rule of Wealth = Spend less than you receive!

Companies want our money. They are very clever with their marketing in order to convince us to spend our money. These deals can be very hard to resist and therefore we can end up spending all the money we have and not saving anything. This is why it is so important to get kids into the habit of saving a little bit of all the money they receive (even if it is just a small amount) before they start spending.

Those that save before they spend are the ones that are able to build their wealth.

Once your kids start following the first rule of wealth ('Spend less than you receive'), they can then start following the second of the 3 Rules of Wealth ('Invest what you save'). To learn more about how to invest for your kids, you should read our simple investing FAQ.

Thanks for reading!


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The above story has been modified and included in my book, Grandpa's Fortune Fables. Your kids will get to read more about Richie Raccoon as he tries to grow his own forest.

Learn more about the book here.


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