NEWSLETTER
Xerxes Nabong, CFP®, CDFA®
Philip M. Maliniak, CRPC®
Nicole Brown-Griffin, CFP®, CDFA®, EA
Aaron Petty, Client Associate
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Wealth Avenue June 2026 Newsletter: 10 Timeless Money Rules for Building Lasting Wealth
In today’s world, it’s easy to get distracted by market headlines, economic forecasts, and the latest investment trends. Yet many of the most successful investors and retirees didn’t achieve financial independence by chasing the next big thing. They followed a handful of proven principles consistently over time.
While no financial rule applies perfectly to every situation, these guidelines can help provide a strong foundation for making smart financial decisions.
1. The Rule of 72
The Rule of 72 estimates how long it takes for your money to double at a given rate of return. Simply divide 72 by your annual rate of return.
At an 8% return, your money doubles approximately every 9 years.
For example:
- $250,000 becomes $500,000 in about 9 years
- $500,000 becomes $1,000,000 in about 18 years
- $1,000,000 becomes $2,000,000 in about 27 years
- $2,000,000 becomes $4,000,000 in about 36 years
This simple concept demonstrates the incredible power of compounding over time.
Takeaway: Time is often more powerful than return. The earlier you start investing, the less you need to save to reach your goals.
2. The 50/30/20 Rule
A simple budgeting framework divides your income into three categories:
- 50% Needs
- 30% Wants
- 20% Savings
Needs include housing, utilities, groceries, transportation, healthcare, and insurance. Wants include vacations, dining out, entertainment, hobbies, and other lifestyle spending. Savings includes retirement contributions, investment accounts, emergency reserves, and paying down debt beyond minimum payments. While everyone’s circumstances differ, this framework creates a healthy balance between enjoying life today and preparing for tomorrow.
Takeaway: Give every dollar a purpose so your spending reflects your priorities.
3. The Retirement Withdrawal Rule
Many investors are familiar with the traditional 4% Rule, which suggests withdrawing approximately 4% of a portfolio annually during retirement.
While this may work well for some retirees, age and retirement horizon matter.
- For retirees in their 50s and 60s, a more conservative withdrawal rate closer to 3% may provide greater flexibility and increase the probability that assets last throughout retirement.
- For retirees over age 70, a 4% withdrawal rate is often more reasonable depending on spending needs, health, and other income sources.
- Every retirement plan should consider factors such as Social Security, pensions, taxes, market conditions, and longevity.
Takeaway: The longer your retirement horizon, the more conservative your withdrawal rate should be.
4. The Rule of 25
A common retirement planning guideline is to accumulate assets equal to approximately 25 times your annual spending needs.
For example:
- Annual spending goal: $100,000
- Retirement portfolio target: $2.5 million
Importantly, this calculation assumes your portfolio is responsible for funding all of your spending. It does not account for Social Security benefits, pension income, rental income, part-time work, or other income sources that can significantly reduce the amount of investment assets needed.
Takeaway: Build your retirement target around spending needs, not income, and factor in other sources of retirement income.
5. The Consumer Debt Rule
Not all debt is bad. A mortgage can help you build home equity, student loans may increase earning potential, and business loans can help grow a company.
The debt that typically creates financial stress is consumer debt such as credit cards, personal loans, vehicle loans, and other obligations tied to depreciating assets or lifestyle spending.
As a general guideline, try to keep non-mortgage debt payments below 10% of your gross income. When debt payments consume too much of your paycheck, it becomes harder to save, invest, and pursue long-term goals.
The objective isn’t necessarily to eliminate all debt. Rather, it’s to ensure debt remains manageable and supports your overall financial plan.
For example, a family earning $150,000 per year may reasonably carry a mortgage while limiting vehicle loans, credit cards, and other consumer debt payments to approximately $1,250 per month or less.
Takeaway: Debt should be a tool that helps you build wealth, not a burden that prevents it.
6. Maintain an Emergency Fund
Unexpected events happen to everyone. Job loss, medical expenses, home repairs, vehicle repairs, and family emergencies can occur when least expected. A healthy emergency fund can help navigate these challenges without disrupting long-term investments or retirement savings.
- At a minimum, we generally recommend maintaining three months of essential living expenses in cash reserves.
- Six months is often ideal for most households.
- For business owners, commissioned sales professionals, real estate agents, and others with variable income, maintaining closer to twelve months of expenses may be appropriate.
Takeaway: The less predictable your income, the larger your cash reserve should be.
Drive a vehicle that supports your lifestyle, not one that compromises your financial future.
7. The 1% Rental Property Rule
For real estate investors, monthly rental income should generally equal or exceed 1% of the property’s purchase price.
For example:
- Purchase price: $300,000
- Target monthly rent: $3,000 or more
While this rule doesn’t replace a full investment analysis, it can provide a quick way to screen potential opportunities.
Taxes, insurance, maintenance costs, vacancies, and financing all matter, but a property that struggles to meet the 1% Rule may deserve additional scrutiny.
Takeaway: Cash flow pays the bills. Appreciation is simply a bonus.
8. The Waiting Period Rule
Before making a significant purchase, give yourself time to think
For many purchases, waiting three days can help separate wants from needs and prevent emotional decision-making. For larger luxury purchases, consider extending that waiting period to 30 days.
Many items that feel urgent today lose their appeal after a brief cooling-off period. On the other hand, if you still want the purchase after several days or even a month, chances are it aligns with your priorities and will provide lasting value.
This simple habit can help reduce impulse spending and encourage more intentional financial decisions.
Takeaway: Most financial mistakes happen in moments of emotion, not logic. If you still want it after the waiting period, it’s probably a priority rather than an impulse.
9. The 15% Savings Rule
A common benchmark is to save at least 15% of your income toward retirement throughout your working years. For those who begin saving early, this can create substantial wealth through compounding.
For those starting later, a higher savings rate may be necessary to achieve similar retirement goals.
Takeaway: The amount you save often matters more than the investment you choose.
10: Spend Less Than You Earn
Perhaps the most important rule of all: Spend less than you earn.
Every financial plan ultimately succeeds or fails based on this principle. Regardless of income level, individuals who consistently spend less than they earn and invest the difference generally build wealth over time. Conversely, even high-income earners can experience financial stress if spending consistently exceeds income.
Takeaway: Financial freedom begins when you consistently spend less than you earn and invest the difference.
Final Thoughts
Financial success rarely comes from finding the perfect investment, timing the market, or predicting economic events. More often, it comes from consistently applying sound financial principles over decades. At Wealth Avenue, our role is to help clients transform these principles into a personalized strategy that aligns their resources with the life they want to live.
Your Team at Wealth Avenue,
P.S. Our greatest compliment is an introduction. If you know a family member, friend, or colleague who could benefit from thoughtful financial guidance, we’d be honored if you shared this newsletter with them. We serve clients from our offices in Virginia Beach, Scottsdale, and Newport Beach, and work with families and business owners across the country through virtual planning and investment management.
In addition to personal financial planning and investment management, we also work with business owners on the design, implementation, and ongoing management of retirement plans, including 401(k), SIMPLE IRA, SEP IRA, and Cash Balance plans. Whether you’re evaluating an existing plan or exploring options for your business, we’re happy to be a resource.
One final read: As a bonus to this month’s newsletter, the attached Forbes article highlights a little-known tax strategy called Net Unrealized Appreciation (NUA) for individuals who own company stock inside their 401(k). In certain situations, NUA may allow the appreciation in employer stock to be taxed at potentially lower longterm capital gains rates rather than ordinary income rates, resulting in meaningful tax savings. While the strategy is not appropriate for everyone and comes with specific IRS requirements, it serves as an important reminder that not all 401(k) assets should be treated the same. Before rolling a 401(k) into an IRA, especially one containing company stock, it’s important to understand all available options, as certain tax benefits may be lost once the rollover is completed.
