1. Make your purse – or wallet – fatter.

That doesn’t mean filling it up with receipts for all the items you bought with your credit card. It means, fill your bag with money. And the best way to do that is to spend less than you earn. This cure stems from the first golden law we looked at last week: Aim to save 10% of your income. Minimum. Save more than that if you can. Save for the long term, for your mortgage deposit or pension, depending on where you are in life. If you need to save for things in the short or medium term, like a vacation or a car, it should be extra and separate from the 10% or more you save for your long-term needs.

Your 10% can include your pension contributions, ISAs, premium bonds, or any type of high-interest/restricted-access savings account. With compound interest, your portfolio will fill up a lot in the coming months and years, even if interest rates stay low.

2. Control your expenses.

If you are going to save at least 10% of your income in the long term, you should make sure that your current expenses do not exceed 90% of your income. This means that wherever you are on the income scale, you’ll need to apply some self-discipline when it comes to treating yourself and your loved ones.

For starters, save your credit card(s) for emergency use only, and if you use them, pay them off before they start accruing interest. Similarly, avoid borrowing unless you can justify the interest you’ll end up paying for the privilege. A car purchased on one of the popular leasing schemes can be justified if it is essential to your work or business. But a loan for a vacation? Staycation would be a better option. Learn to distinguish between wants and needs. A roof over your head and food on the table are necessities; a month in the Maldives is a wish. Enjoy that when you’ve saved 10% of your income for a year or two and can afford to fly to paradise without dipping into those savings.

The secret to controlling your spending is to create a budget and then stick to it. If you have Microsoft Excel, you can download a template to help you keep track of your spending for a week or a month. You can also find ready-made templates on the Internet or apps for your phone. Calculate how much you spend on mortgage, rent, commute, etc. and set limits on things like eating out, entertainment, travel, etc. This will help you stay below 90% of your income.

3. Make your money multiply.

You’re looking for consistent long-term returns, not a lottery win. What you need is a steady increase in your capital, your primary equity, such as compound interest from an ISA or savings account, or, riskier, dividends from stocks you own in well-run companies, including your employer. , if they have an employee stock ownership scheme. If you are not an expert in financial products and investment vehicles, find someone who is. Don’t commit until you speak with a professional financial advisor. Explain what your investment goals are and ask them to help you develop a plan to achieve them.

4. Protect yourself from loss.

The sickening nightmare of watching your dreams of wealth turn to dust when Bitcoin plummets or the guy you met in the pub the other night disappears with your life savings. One way to protect yourself against loss is to make it an unbreakable rule that you don’t touch that core wealth that you’re saving and investing for the long term. Keep a ring of steel around that! If you are tempted to try your hand at Bitcoin or forex trading, only use money that you can afford to lose. That means whatever money you have left over after you’ve saved your 10%, paid the bills, and filled your belly. Money you might otherwise spend on nights out can be given to online bookies, if you can budget for it; see the second cure above. Never use a credit card or loan to place bets, wagers, or high-risk investments. However, before engaging in any high-stakes investment or bet, make sure you have thoroughly researched the field and understand what you are getting yourself into. If online poker is your dream, practice with your friends first to get matchsticks.

5. Make your home a profitable investment.

Owning your own home (and ideally some buy-to-let properties) has become something of an obsession in the last thirty or forty years. Given the way property prices have skyrocketed during that time, it makes a lot of sense to jump on the property ladder as soon as possible, especially when home prices are rising at a much faster rate than incomes. .

However, keep in mind that at some point the bubble may burst. Yeah, people have been saying that for years and it hasn’t happened yet. But it is increasingly likely that the authorities will take steps to let some of the air out of the property market. Possible measures include revaluation of property tax bands and punitive taxes on properties that are bought to let and those that are left vacant. A big increase in home construction is unlikely to have much of an impact on house prices on its own, but when combined with potential tax changes, we could see prices plateau and stay there for some time. weather.

Given all of that, the best approach is to find an affordable home or condo in an area where you’d like to live for the foreseeable future, taking into account things like local amenities, schools, and commuting. Also think about the benefits of paying off a mortgage and gradually acquiring full ownership (leasing and freehold issues aside) of your home over 25 or 30 years, compared to being in debt to a landlord who may raise the rent or evict you with one month’s notice. and who will still own the roof over his head despite all the thousands of pounds sterling he put in his pocket.

If you can’t afford to buy directly in the area where you want to live or work, consider options such as co-ownership and self-build. See what schemes are available in the area where you want to live.

If you already own your own home, you can use it to generate additional income by receiving a tenant. If you live in a major city, a good source of guests is contractors: professional people working on a local project who need a place to stay for a few months and don’t want to use hotels. They will often go home for the weekend so you have the place to yourself. Another option is to receive exchange students. Usually they will come for a week or two. You provide them with a bed, breakfast, packed lunch, and dinner, and get paid to do so. Another option is to use your home for vacation rentals while you yourself are on vacation. This works especially well if you live in a major city or historic town.

Even if you rent, take a tenant (if your landlord allows it) or run a home business (see below). You can still make your home a source of extra income, even if you don’t own it.

Two other things to consider. First, home and contents insurance. Make sure you have adequate coverage for the worst that can happen: fire, flood, theft. Second, if you have a mortgage, consider insuring it against unemployment and sickness. Take the advice and make sure the policies you take out are fit for purpose and will pay out if the worst happens.

6. Develop a future income.

Who wouldn’t want to wake up in the morning knowing that no matter what, they are assured of a steady income for eternity? Well, you can do this through your long-term savings, those 10% or more that you deposit month after month, year after year.

When you talk to your financial advisor (as you should!) about your savings and investment goals, the first two things to focus on are a pension for you (and your partner, if you have one) and supporting your family when you are no longer here, that is, life insurance. Your financial advisor should also tell you about other investments that can generate additional income for you and your family, such as ISAs, investment trusts, and government bonds.

Its objective is to guarantee a sufficient income for a long old age. Remember, people live longer, but they are not always healthier. It’s not pretty, I know, but think of the worst that can happen to you (barring an early death). You or your partner have a chronic illness or disability and need long-term care. How are you going to finance that? If you sell your house, what are you going to leave to your children? This is the type of problem you need to discuss with a financial advisor. You need a pension, in addition to other sources of income, that will cover all your needs for perhaps thirty or forty years after you stop working. Develop a plan, implement it, and then continue enjoying life.

7. Increase your ability to earn.

There is no such thing as a job for life anymore. These days, even professional occupations like lawyer, accountant, and insurance underwriter are threatened by automation and offshoring. So it makes sense to develop additional skills that you can use if you find yourself out of a job.

If you think you are at risk of being replaced by a robot, you need to take a very careful look at “future-proofing” your career. Think about the jobs that are unlikely to be automated or offshored in the future. They tend to be the ones that involve face-to-face contact, eg, complementary therapies, nail technician, hairdresser, personal trainer, life coach, counselor. Also, jobs where local presence is essential: electrician, plumber, locksmith, bricklayer.

Of course, many of these jobs are relatively low-paying and in highly competitive industries. That means you need to find a unique selling point: something that you do that no one else does, or that no one else does as well as you do. Focus on something that really interests you, or better yet, that you are passionate about, and what you know can be brilliant. Be realistic about potential revenue, competition, and the time and energy required to make it work. Unless you already have experience in your chosen field, you will need to spend a lot of time, and perhaps money, acquiring the necessary skills and certifications. You will also need to decide how you will operate: sole trader, limited partnership, franchise. Get advice before committing to anything.

A popular option for generating additional income is selling online. Even if you have a full-time job and are happy with your income, you can try it in your spare time and get a feel for what’s involved. A regular mess will reveal all sorts of things you can sell: clothes, DVDs, cell phones, unwanted gifts. If you enjoy selling online, you could build a successful business without risking your principal.