1. Money

Eleven Solid Financial Rules to Help You Build Wealth

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Getting solid financial footing requires you to focus on the most important elements of your money -- saving and investing. But that’s easier said than done.

What are the key tasks you should you focus on? Consider these eleven rules of wealth-building:

#1: Keep At Least Three Months of Living Expenses in a Savings Account. That's just a starting point. If you’re self-employed, work on commission, or work in an unstable industry or position, double or even triple that baseline. Many financial planners believe it's a good idea to have six to nine months of your normal expenses stashed away.

#2: Multiply Your Living Costs by 25. That’s what you need to retire. To spend $40,000 a year in retirement, you need to have $1 million saved. Better start cracking!

#3: Save a Minimum of 10 Percent of Your Salary. Start as young as possible, when the power of compounding returns is the greatest. That’s how you’ll reach the $1 million mark – through compounding interest (the money that your money earns) over the span of a long time.

#4: Take Advantage of the Your 401k Company Match -- or else you’re not collecting all your hard-earned compensation.

#5: Open a College Savings Account for Your Children. It’s never too early, even if your child is still in diapers.

#6: Make the Maximum Contribution to Your Roth IRA. You will avoid future taxes on your contributions, including capital gains tax.

#7: Spend No More than 28 to 33 Percent of Your Income on Your Home. That should include all your home-related costs, like insurance, property taxes, replacing the roof, trimming trees, mowing the lawn and steam-cleaning the carpets. If you’ve never owned a home before, you’re probably vastly underestimating how much home maintenance will cost.

#8: Refinance Your Home -- but only if you can erase at least 1 percent from your mortgage rate.

#9: The Number 120 Minus Your Age Equals ... The percentage of your portfolio that you should put in stock funds, according to this popular rule of thumb. Keep the rest of your portfolio should be in bonds. (If that's too aggressive or risky for your taste, then keep your age in bonds, with the rest in stocks -- so if you're 30, keep 30 percent in bonds. This is a more conservative alternative.)

#10: Avoid Any Investment You Don’t Understand, for obvious reasons. If someone's using fancy words and making big promises, be cautious. It's better to stick to tried-and-true, get-rich-slowly methods than to gamble your future on something you're not ultra-familiar with.

#11: Avoid High-Fee Funds: The highest fee you should pay is 1 percent, but aim for the lowest-fee quality funds you can find. Vanguard, Fidelity and Schwab, among others, are known for their low-fee index funds and commission-free ETFs.

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