The Rules of Wealth

“Do as I do, not as I say” is a useful maxim in life. It’s one instinctively understood by children (“But daddy, you ate three packets of crisps and YOU never clean YOUR room – it’s unfair!”) and politicians (“But you, Snouty and Fatcat already have knighthoods – it’s unfair!”).

But can mimicking the wealthy really make you rich?

Richard Templar thinks so. In his The Rules of Wealth: A Personal Code for Prosperity, a neatly packaged book that will doubtless make him millions, the best-selling author says:

“The simple truth is that wealthy people tend to understand and do things the rest of us don’t. From mindsets to actual actions, they follow behavioural rules when it comes to their wealth and these rules are what separate them from everybody else.”

Everybody else except, potentially, purchasers of The Rules of Wealth, because within its pages Templar sets out what he claims are 100 behaviours you can copy to make yourself wealthy, too.

It’s seductive: steal from the rich and you’ll become rich yourself. And it’s laudable in that Templar’s 100 Rules are often so common sensical and all-encompassing that it’s hard to argue with them. Work hard, save your money, shun debt – hear, hear, we say.

The only tricky bit is working out what’s an enriching action, and what’s a byproduct of previous money-making behaviour.

Consider an Olympic athlete. If you simply copied his six hours a day training regime without realising he’d built up his stamina to such punishing levels over a lifetime, or that he ate like a horse (or maybe ate a horse) for breakfast, you’d find yourself flat on your back, calling for emergency cream cakes and an ambulance.

Similarly, choose only the obvious but unhelpful parts of the being rich equation – say the shopping on Bond Street, investing in hedge funds, and recycling-your-wife elements – and you’ll soon be back to Amazon investigating an entirely different range of rather less ambitious self-help books.

Templar realises this, and so he allocates the first 18 of his Rules to covering concepts about money. You have to think rich before you get rich.

Here’s a few of my favourites from this section:

Rule 2: Decide on your definition of wealth
Rule 6: Understand your money beliefs and where they come from
Rule 10: Understand that wealth is a consequence, not a reward
Rule 17: Don’t envy what others have

If you don’t believe you have a right to money or were brought up thinking it is inherently corrupting, you’ll struggle to get rich except by luck. And even if you are incredibly lucky with gambling or marriage, say, you’ll likely drink/drive/drown it all away.

Consider the Lottery millionaires who end up back where they started after an expensive ride behaving as they wrongly presume the loaded gentry do. If on the first day of their newly wealthy lives they actually thought like self-made millionaires, they’d realise that £1million won’t buy you much more than a £35,000 to £40,000 inflation proof income for life. A life-changing sum for most of us, sure, but not one that can fund yachts and champagne forever.

Perhaps these overnight winners believe the mundane business of budgeting is something best left to the poor. Whereas in reality, many of the self-made rich watch every penny until they’re truly wealthy, and after that round up to the nearest pound.

That’s a generalisation, of course – we’ve all met wealthy spendthrifts (or their spouses…). But just as when reading Stanley and Danko’s intriguing yet logically flawed The Millionaire Next Door, Templar’s book inevitably outlines a one size fits all approach. Real-life is more complicated.

For instance, most of us have friends who already follow the rather dubious Rule 22 (‘Only by looking wealthy can you become wealthy’) but who remain up to their eyeballs in store card debt. Equally, plenty of the rich ignore Rule 50 (‘Only buy shares (or anything) you can understand’), as evidenced by the ostrich farms, offshore scams and pyramid schemes some regularly lose money to.

Even Rule 43 (“Don’t rent, buy”), which has made older generations rich and is certainly a good general rule for funding your home, isn’t quite straightforward to follow at the time of writing – after years of rampant house price inflation, buying instead of renting currently makes no financial sense.

What’s more, to anyone with an ongoing interest in investment, many of the later rules will seem too obvious. For instance, Rule 45 says ‘Build a lot of capital, then invest it wisely’. True, but equally, ‘Duh!’. The nods towards entrepreneurship are even less satisfying; two pages of rather large print on why should should probably set up your own business (Rule 33) hardly gives you a glimpse inside the mind of a Richard Branson.

As such, I can’t really recommend the book to experienced Monevator readers, even though I agree with nearly all its Rules. (One I’d contest is Rule 32, which argues against forsaking your daily triple cappuccino. Most people have no business spending the £500-a-year in Starbucks the habit costs, and I say that as a fan of occasional caramel macchiatos. The key word is ‘occasional’!)

The Rules of Wealth is just too lightweight for anyone with a few good books on money already, although it makes a handy crib sheet. I probably wouldn’t buy it, but I won’t throw it away now I own it.

If you’re new to money writing though, or are still at a stage where you need to be told being in debt is bad, savings are good, and multiple income streams are best of all – and we all have to start somewhere, so there’s no shame in it – then The Rules of Wealth could be a perfect initial investment.

It’d also make a decent Christmas present for a relative or close friend who’s strayed from the path to prosperity. But don’t preach too much about money if you want to stay close to them. Rule 4, ‘Keep it under your hat’, is perhaps the most subtle one of all.