Most wealth creation principles are easy to understand, but difficult to implement. Nelson Nash, in his book Becoming Your Own Banker, discusses three distinct rules that can “make or break” your pathway to wealth and prosperity: the Golden Rule, Parkinson’s Law, and Sutton’s Law.
The Golden Rule:
(Those who have the gold, make the rules)
This law rings true for our central banking system – otherwise known as The Federal Reserve. Some might argue that powerhouse players, like pharmaceuticals, Hollywood or even politicians hold the power. In reality we are controlled by the Federal Reserve because they control the valuation of the dollar.
Because we rely on the Federal Reserve, they get to call the shots. However, when we are disciplined enough to save our own capital into a banking policy (Whole Life Insurance), you get to call the shots – now you’re in the driver’s seat!
Start acquiring your gold so you can make the rules!
(When income increases, so do expenses)
In finance, Parkinson’s Law states that when a person has a rise in income, their expenses will rise as well.
This economic law supports why so many people never have enough money to save and invest – regardless of how much more money they make.
To avoid becoming a victim of Parkinson’s Law:
- One, take 10-15% off the top of your income with every pay raise
- Two, be sure to pay yourself first
Then make a conscience effort to keep your standard of living consistently affordable regardless of how much your income increases. It’s a fact, being wealthy requires discipline.
(Wherever wealth is accumulated someone will try to steal it)
Sutton’s Law was derived from the notorious bank robber of the early 1900s, Willie Sutton. He was once asked in an interview why he robbed banks, and he famously replied, “Because that’s where they keep the money!”
This rule states that wherever wealth is accumulated, someone will try and steal it. Nowhere is this law more apparent than in our nation’s current tax system.
Taxes erode wealth, and just like Sutton’s Law points out, if the American public is holding the money, then someone (like the IRS) will “steal” it. And as the saying goes, “the more you make the more they take.”
Though we all get taxed, one way to hold onto your wealth is through a Whole Life Insurance Policy, as it allows your money to grow tax-free.
Overall Wealth Creation with Whole Life
When adhered to, these three principles can bring power into your financial life, yet Whole Life Insurance can be the “holding place” that protects your money. Whole Life Insurance provides ample tax-benefits, is free from government regulation, and captures the opportunity cost of your dollars that would have otherwise been lost if deposited into a bank.
As we were told as kids, money doesn’t grow on trees; and wealth rarely just “appears” in a person’s life.
Being wealthy takes knowledge, proper decision making, and an understanding of how to protect your hard-earned income from the greatest wealth corroders of all – inflation and taxes.
For more information on how Whole Life Insurance can assist with wealth creation principles,
Read: Discover how Life Insurance is a Cash Flow Resource
Watch: Life Insurance: The “And” Asset
Listen: Inflation 101