The 3 Rules of Wealth

For our kids to grow up financially healthy and wealthy, we need them to follow the ‘3 Rules of Wealth’.

What are the 3 Rules of Wealth?

  1. Spend less than you earn

  2. Invest what you save

  3. Be patient

Simple, right?!

These rules are simple, however, 95% of people don’t follow them!!

In this blog, I’m going to explain why most people don’t follow these rules and what you can do to make sure your kids do. Remember, if your kids grow up following these rules, they will be financially healthy and wealthy.

Before you go on, do you know the difference between being wealthy and being rich? If not, you might want to check out this blog first.

Why don’t people follow these simple rules?

Let’s first look at Rule 1 (‘Spend less than you earn’) and Rule 3 (‘Be patient’).

Essentially, companies are spending millions to get you to spend your money and break these rules. They don’t want you to save; they want your money now.

Companies know all the tricks in the book to prey on our weaknesses and insecurities so that we think that spending is a good thing.

They are so good that 52% of adults in the UK are in debt (excluding mortgages). This means that 52% of people are not following the first rule of wealth. By training your kids to follow the first rule of wealth alone, it will mean they’ll be wealthier than most people.

Without practice in the art of saving, we are in a losing fight when it comes to keeping our money. To help your kids appreciate how hard it is to avoid spending, I strongly recommend that you read them the story ‘The Trip to the village’ (link at the end of this blog).

Now, rule 2 (‘Invest what you save’). Most people don’t follow this rule as they’ve never been taught how to invest or have heard scary stories so haven’t spent the time trying to learn how to invest. The truth is that investing doesn’t have to be scary. It can be very simple. The key is to think long-term. In my view, investing is a ‘Sheep in Wolf's’ clothing’.

I believe that if we can help our kids invest from an early age, they will have such an advantage in life.

I’m going to talk more about this later.

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How to train your kids to follow ‘The 3 Rules of Wealth’?

Thinking of money like seeds

The first thing is to get your kids to see that money is like seeds. Their job is to grow a forest (become wealthy). To grow a forest, they need to follow three simple rules:

1 - Keep at least 1 out of every 10 seeds you receive (i.e. Spend less than you earn)

2 - Plant the seeds you keep (i.e. Invest what you save)

3 - Let your trees grow (i.e. Be patient)

This simple visualization will help them learn that money can be saved and grow over time. This is already giving them an advantage over most kids who only see money for spending.

Now we need to train them to follow these rules.

Rule 1 - Spend less than you earn (keep at least 1 out of every 10 seeds you receive)

In order to make sure your kids achieve this, they need to be forming a savings habit. We can’t rely on them thinking about whether to save or not, as the marketing companies will win them over. They need to be saving before the marketing companies can get to them. This means they need to have the habit of putting some money away before they start spending.

Again, please read your kids the story ‘The trip to the village’ to help them appreciate why this is so important (link at the end of this blog).

Remember, our kids form many of their adult money habits by the age of 7. It’s really hard to change habits so best to get them forming good habits from the start, especially if they have already started to form a spending habit, e.g. spend all the money they receive straight away.

To help them practice, I’d strongly recommend that you give them weekly pocket money. This allows them to practice saving a little bit of money (with your encouragement) before they go to the shops to start spending. This money is to be saved for the long-term.

They only have to save a little bit, say 10% of what they receive. It doesn’t matter about the amount they save. The key point is that they save something every time.

When they get older, saving a bit of money each time they receive some should just be something that they do automatically. This means that a bit of money is out of reach from the marketing companies.

TRAINING ACTION: Train your kids to save a little bit of money each time they receive some

Rule 2 - Invest what you save (Plant the seeds you keep)

Training our kids to make sure some of their money grows can be life-changing. When they are adults they won’t just be relying solely on their jobs to generate an income. The money they have saved can grow whilst they sleep.

This is an area that a lot of parents struggle with as they were never taught about investing themselves. As mentioned earlier, investing in the stock market is actually a ‘Sheep in Wolf's clothing’.

To give you a very quick overview of what investing is, see the diagram below:

I’ve put together an investing FAQ - a link at the end of this blog. This FAQ addresses the key questions that parents have about investing and the simple actions needed to make sure you can invest simply.

I strongly recommend that you consider investing for your kids. Once you start helping them to invest their money, you can train them to invest the money they keep for the long-term. The younger they start investing (with your help), the more time there is for that money to grow.

(assuming a 7% pa investment return based on very long-term historical average)

TRAINING ACTION: Set up a simple investment account (either in their name or share an account in your name), and help them invest their savings and talk to them about their investments over time.

Rule 3 - Be Patient (Let your trees grow)

You’ve made it this far in the blog so I have high hopes for your kids! :-)

Essentially, without patience your kids are going to struggle to be financially healthy. A lack of patience leads to a higher chance of using debt, being scammed, gambling and ad-targeting. All of which will make them poorer, not wealthier.

As the famous Stanford Marshmallow Experiment showed, those children that are patient (i.e. can delay gratification) grow up to be more successful in terms of relationships, work and, financially.

Tips to train your kids to be patient:

  • Keep it small - For example, encourage them to save some chocolate for tomorrow. Don’t get them to save the whole bar, just a square or two. The same with money. Allow them to spend most of their money but encourage them to save just a little bit. This makes the process much easier.

  • Reward their patience - If they are saving up for something, say you’ll contribute to it if they get close to their target. If they have money in a piggy bank, add a few extra coins as a reward. Life will reward them for patience, and help them see the rewards early.

TRAINING ACTION: Use pocket money to help your kids learn to be patient with their money.


The 3 Rules of Wealth are simple but not easy to follow.

If you spend time training your kids to follow these rules from an early age, they will grow up to be financially healthy and wealthy.

Don’t underestimate how hard these are to follow. Your kids need to be well trained. If you aren’t already, consider giving them pocket money so they can start their training.

Look to start investing. You can do this in your name and share it with your kids or put it in their name. Whilst it takes a bit of admin to setup (like setting up a bank account), it can really make a big difference. Feel free to email ( if you need any guidance.

Both you and your kids need to be patient when it comes to money and their money training. If they are patient, then the world will reward them over time.

Please share this blog with other parents. We need to make sure that as many kids as possible follow the 3 Rules of Wealth.

Don't forget to leave a comment and share this blog with other parents.

Thanks for reading!


Three important links:

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