Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 51

My 8 rules for both wealth and health

This morning I was doing a workout at the gym, something I have been doing for more than 20 years. Keeping your body in good shape and building your finances requires similar strategies, as exactly the same principles apply to each.

Today, in the interests of good health and wealth for us all, I’ll share the principles with you.

Rule 1. You must have a concrete goal.

It is as pointless to say “I want to lose a few kilos” as it is to say “I want to have more money in the bank”. It is essential to have a specific goal and a timeframe.

Rule 2. Focus on the benefits.

This is what will help you stay on track when the inevitable temptations arise. Shedding a few kilos will certainly improve your health and make you feel better; retiring with a substantial superannuation balance will open up a whole new world of freedom and choice.

Rule 3. It must be a permanent lifestyle change.

Dr Gary Egger of Gutbusters said the word DIET was short for Diabolical Ineffective Expensive Timewaster. Most people who go on a crash diet put all the lost weight back on when the diet inevitably becomes too hard. It’s exactly the same with money. Scrimping and saving for a month is pointless. Becoming wealthy is usually the result of a process of managing your money well over the long haul and letting compound interest work its magic.

Rule 4. Understand the 70/30 rule.

Seventy per cent of a successful weight loss program will be attributable to your eating habits, and thirty per cent to exercise. Seventy per cent of building wealth consists of managing your money to spend less than you earn, while the rest of it consists of good asset selection and tax effective strategies.

Rule 5. Don’t try to do too much too soon.

The reason most New Year’s resolutions fail is that they are normally made in a moment of alcohol-induced euphoria and are not carried through in the harsh light of day. The trick is to start small and build on it. To lose weight you might decide to have two healthy-eating days a week. To get your finances in order you could start with a simple budget coupled with moving your home repayments from monthly to fortnightly.

Rule 6. Expect roadblocks.

There will be times, especially around Christmas, when your budget and your belly will take a battering. By all means, prepare for these occasions to the best of your ability but don’t give up if you have a setback. Just treat it as a period of consolidation while you prepare to start moving forward again.

Rule 7. Keep track of your progress but don’t do it too often.

Both your weight and your portfolio are going to be bouncing around for the rest of your life, and getting excited or depressed because of a good or bad day can put you on an emotional roller coaster which could lead to impulsive and flawed decisions. As long as you are making steady progress towards your goal you are on the right track.

Rule 8. Mix with people who share your goals.

It’s much easier to refuse dessert when nobody else at the table wants it than it is to watch everybody else eating it. It’s easier to live within your income if your circle of friends shares your financial aspirations.

The great thing about having a variety of goals is the way you can make them work together.  Much of our discretionary spending these days is on food and alcohol, and cutting back on these will save you dollars as well as kilos. It may be difficult at first while you are slowly changing lifelong habits but eventually new habits will form. Then you can enjoy the results.

 

Noel Whittaker is Australia’s foremost financial adviser, a well-known media commentator and international best-selling author, including ‘Making Money Made Simple’. He is Adjunct Professor with the Faculty of Business at the Queensland University of Technology. His advice is general in nature and readers should seek their own professional advice before making any financial decisions.

 

  •   28 February 2014
  • 1
  •      
  •   
1 Comments
Alex
February 27, 2014

Great article, couldn't agree more!

 

Leave a Comment:

banner

Most viewed in recent weeks

The growing debt burden of retiring Australians

More Australians are retiring with larger mortgages and less super. This paper explores how unlocking housing wealth can help ease the nation’s growing retirement cashflow crunch.

Four best-ever charts for every adviser and investor

In any year since 1875, if you'd invested in the ASX, turned away and come back eight years later, your average return would be 120% with no negative periods. It's just one of the must-have stats that all investors should know.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

Preparing for aged care

Whether for yourself or a family member, it’s never too early to start thinking about aged care. This looks at the best ways to plan ahead, as well as the changes coming to aged care from November 1 this year.

Our experts on Jim Chalmers' super tax backdown

Labor has caved to pressure on key parts of the Division 296 tax, though also added some important nuances. Here are six experts’ views on the changes and what they mean for you.        

Latest Updates

Investment strategies

LICs vs ETFs – which perform best?

With investor sentiment shifting and ETFs surging ahead, we pit Australia’s biggest LICs against their ETF rivals to see which delivers better returns over the short and long term. The results are revealing.

Retirement

The growing debt burden of retiring Australians

More Australians are retiring with larger mortgages and less super. This paper explores how unlocking housing wealth can help ease the nation’s growing retirement cashflow crunch.

The ASX is full of broken blue chips

Investing in the ASX 20 or 200 requires vigilance. Blue chips aren’t immune to failure, and the old belief that you can simply hold them forever is outdated. 

Shares

Buying Guzman y Gomez, and not just for the burritos

Adding high-quality compounders at attractive valuations is difficult in an efficient market. However, during the volatile FY25 reporting season, an opportunity arose to increase a position in Mexican fast-food chain GYG.

Investment strategies

Factor investing and how to use ETFs to your advantage

Factor-based ETFs are bridging the gap between active and passive investing, giving investors low-cost access to proven drivers of long-term returns such as quality, value, momentum and dividend yield. 

Strategy

Engineers vs lawyers: the US-China divide that will shape this century

In Breakneck, Dan Wang contrasts China’s “engineering state” with America’s “lawyerly society,” showing how these mindsets drive innovation, dysfunction, and reshape global power amid rising rivalry. 

Retirement

18 rules for ageing well

The rules to age successfully include, 'the unexamined life lasts longer', 'change no more than one-eighth of your life at a time', 'nobody is thinking about you', and 'pursue virtue but don’t sweat it'.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.