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

Will you run out of money in retirement?

Fear of running out has become a defining retirement anxiety. Why do some retirees die with substantial wealth while others deplete their nest egg? Evidence suggests the answer is more complicated than we think. 

Why spending more in early retirement can improve lifetime income

Conventional wisdom encourages retirees to preserve superannuation. But if those likely to qualify for the Age Pension later in life spend a little more today, it may deliver higher lifetime income and a more stable retirement.

The investment that sidesteps the new tax traps

Tax rules have changed, but many investors are still using yesterday’s strategies. Insurance bonds may offer advantages for those seeking greater control, tax efficiency and certainty about their wealth.

Testamentary trusts have secured the CGT exemption

Treasury’s latest CGT reform draft delivers a win for testamentary trusts and deceased estates, exempting estate-derived gains from the 30% floor. However, questions on death and divorce rollovers remain unresolved.

Meg on SMSFs: What do we think about reversionary pensions these days?

Reversionary pensions have long been a staple of SMSF estate planning, but are they still the best option? Meg Heffron revisits a once-clear favourite and asks whether changing super rules have shifted the balance.

How does the 4% rule stack up?

The 4% rule has long been retirement's gold standard. But after a difficult period for investors, fresh analysis suggests a more conservative approach may significantly improve the chances of making savings last.

Latest Updates

Planning

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

Investment strategies

The new capital gains tax trap for your portfolio

Investors have long accepted one portfolio rule without much question. A major tax shift could change that calculation entirely, forcing difficult trade-offs between risk, discipline and an overlooked cost lurking beneath.

Economy

Population growth masks Australia’s productivity problem

For years, investors have benefited from a seemingly reliable growth story. But recent national accounts raise uncomfortable questions about what has really been driving Australia’s economy and whether that can continue unchecked.

Investment strategies

Why tomorrow’s winners may not be today’s index leaders

The stocks that built retirement balances over the past decade now dominate many portfolios. The new challenge is whether these companies can continue meeting the increasingly high expectations embedded in today's share prices.

Investing

What earnings surprises reveal about future returns

Sometimes the most important information in an earnings result isn't the number itself. It's the possibility that the market's assumptions have been fundamentally wrong and future earnings may look very different.

SMSF strategies

Individual SMSF Trusteeship directly liable for ATO fines

A rarely discussed detail buried in SMSF structures could dramatically change who wears the cost when something goes wrong. With penalties rising, a decision many dismissed as administrative may deserve a second look.

Investment strategies

The currency bet you didn’t know you made

Buying global shares means making two bets: on the companies and on the Australian dollar. Most investors consciously choose only the first. Last financial year, the second bet cost 8.5% in returns for many investors.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 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.