5 Rules to Grow Rich

At the tender age of 11, I made a solemn vow that when I grew up I was going to be rich. My plan was simple: Marry well.

I bless the day I married my husband, a man who is rich in character and unfailing love. I assumed his money would follow. While waiting for wealth to descend upon me, I made the near-tragic error of spending as though I were already rich. That landed us in so much financial trouble that it took 13 years to repair.

The experience taught me a very important principle: How much you spend matters much more than how much you earn. It’s the money you don’t spend that gives you the freedom to build wealth and live the life you love.

I’ve asked top financial experts for their best tried-and-true rules for building wealth. No matter where you are in your financial journey, start following this advice right now so you can keep more of what you earn. That’s the way to grow rich!

Rule #1: Live Smarter

Enough is enough

"Living below your means is the secret to prosperity," says Michelle Singletary, nationally syndicated personal finance columnist for The Washington Post. "In this country we define rich as having a lot of material things. Look at what you have already and say with confidence, ‘I have enough.’ You don’t need to borrow more money to get more stuff, because all that means is you’ll have to work more to pay for it."

Stop trading up

Would you like to save hundreds of thousands of dollars? asks Jonathan Pond, author of You Can Do It! The Boomer’s Guide to a Great Retirement. "Over 40 years of car ownership, someone who trades in a car every 10 years will have almost $500,000 more in the kitty than someone who trades in their car every three years," he says. Make your goals a priority

"For example, if you want your children to go to college without a dime in debt (as I do), then make saving for college a priority," says Singletary. "Your kids get video games, trendy clothes, Xboxes or whatever only after you’re saving at a rate that ensures they won’t have to borrow to go to school."

Rule #2: Make Your Money Grow Time is money, so start saving now

Even small amounts of money invested regularly in a tax-sheltered retirement account using a diversified stock fund with dividends reinvested can create great wealth over the long run, says Terry Savage, author of The Savage Number: How Much Money Do You Need to Retire? "Just $2,000 a year invested every year in a fund that tracks the S&P 500 stock index could grow to nearly half a million in 30 years, or more than $3 million in 50 years." This assumes that the stock market performs at the same level it has for the past 50 years (about 10.4 percent annually). It’s never too late to get started. After all, women are likely to live well into their 90s! Pay yourself first Invest money automatically taken out of your paycheck or bank account on a regular basis, says Jane Bryant Quinn, Newsweek’s personal finance columnist and author of Smart and Simple Financial Strategies for Busy People.

"Twenty years from now you’ll be amazed at how rich you are," she says. Also, sign up for your employer’s retirement-savings plan or open an IRA. Increase your automatic deposit whenever you get a raise. "In your 20s, save at least 10 percent of your salary. In your 30s, save 15 percent; maintain that level
in your 40s and 50s."

Rule #3: Protect Your Main Asset

Buy a home and live in it
"You cannot get rich renting; it’s impossible," says David Bach, author of The Automatic Millionaire. Over time, despite the ups and downs of the housing market, owning your home is one of the best financial moves you can make. Homeowners in America are 34 times wealthier than renters. Also, don’t sell your first home to buy a bigger one. "Rent your first home and buy a second home of equal value. Invest as much of the rental fees as you can and you’ll eventually be able to retire off that rental income."

Leave your home equity alone
"Don’t borrow against it," says Quinn. "Let it build, so you’ll own the house free and clear by the time you retire." That equity is potentially a big pot of money you can use.

Rule #4: Avoid Toxic Debt

Pay your credit card bill(s) in full every month
No exceptions! "It’s easy to let a month slide by paying just the minimum, but get in that habit and your credit card debt can quickly bloom," says Liz Pulliam Weston, personal finance columnist for MSN and author of Easy Money: How to Simplify Your Finances and Get What You Want Out of Life. "Credit card debt is the most toxic debt there is; you’ll wind up paying a fortune in interest charges. Paying late or over-limit fees just throws more good money away.

Have the highest possible credit score
"Your FICO credit score determines who will hire you, and how much interest you’ll pay on mortgages and car loans," says Suze Orman, author of Women & Money and the Save Yourself Plan (saveyourself.com). "FICO scores range from 300 to 850 and if your score is at least 760 you’ll be able to get the best loans."

Rule #5: Be Patient!

It takes time to get rich
Despite all the infomercials that tell you the secrets of getting rich quickly with real estate, gold coins or llama farms, the truth is there’s no secret formula, says Pond. "You already know that the key is to spend less than you earn and invest those savings wisely," he says. "If you do that, it’s almost a certainty you’ll accumulate a lot of money over the years, no matter when you start. Moreover, you’ll sleep well knowing that you have the cushion to meet any financial problems that arise."

You’ll be OK
Independent university and government studies have found that among the 77 million baby boomers (those born between 1946 and 1964), 80 percent are on track to achieve a financially stable retirement, and only 2 percent of boomers will retire in poverty. If you follow the rules and make a little progress each day, you’ll be in much better financial shape than you’ve believed possible.

Read more: How to Save Money - Best Money Saving Tips - Woman's Day