How to be rich

If you can keep a good habit of paying your credit cards in full every month, it's good to have at least two credit cards. Use a card that earns travel points for travel expenses and eating out (a good one is Chase Sapphire Reserve). Use a cash back card for everything else (a good one is the Alliant cash back card). If you run a business, Capital One cash back business card is a good card to have. For extra benefits, American Express Platinum card is worth looking into.

Most credit cards will extend the warranty on your purchases if you use the card to purchase them. Most credit cards also provide car rental insurance coverage (and you're probably also covered by your own auto insurance) so you never have to buy it from the rental company. Many cards also have trip-cancellation insurance that will pay rebooking fees if you get sick and can't travel.

I've always had an idea of what the average stock market return was, but this is the first time I've seen it confidently stated in writing: "Over the twentieth century, the average annual stock market return was 11 percent, minus 3 percent for inflation, giving us 8 percent."

Once you get to the point in your working career where you can start saving money for the future (which you should get to as soon as possible), here is a good order for where to put your savings (don't go past a rung until you've completed it):

Rung 1: If your employer offers a 401(k) match, contribute just enough of your paycheck to get to 100 percent of the match.

Rung 2: Pay off any credit card and other debts you have.

Rung 3: Open a Roth IRA and max out your contributions to it (don't forget to invest the money you put in, preferably in index funds).

Rung 4: Max out your 401(k) contributions.

Rung 5: Open an HSA (if you have access to one) and contribute to it.

Rung 6: Use any additional savings money to pay off mortgage, invest in yourself, or invest in taxable investment accounts.

Richard Jenkins, the former editor-in-chief of MSN Money, wrote an article called “The 60 Percent Solution,” which suggested that you split your money into simple buckets, with the largest, basic expenses (food, bills, taxes), making up 60 percent of your gross income. The remaining 40 percent would be split four ways:

1. Retirement savings (10 percent)

2. Long-term savings (10 percent)

3. Short-term savings for irregular expenses (10 percent)

4. Fun money (10 percent)

If you work for yourself, a rule of thumb is to set aside 40% of your income to pay taxes. It will be more than enough, and you put any overage into your savings after you pay your taxes.

Set up one main bank account where all your income will flow into. Set up all of your credit cards and bills to autopay from this account. Also set up your savings and investment accounts to automatically deposit savings from this account every month.

30% to US stock funds

15% to international funds from developed non-US countries (like Germany and UK)

5% to emerging-market funds of developing non-US countries (like China and India)

20% to real estate investment trusts (REITs)

15% to government bonds

15% to treasury inflation-protected securities (TIPS)

The single best time to negotiate salary for a job is when you're initially hired. Also remember to smile whenever interviewing and negotiating. It's an effective disarming technique and makes people more willing to hire you and negotiate with you.

Only consider buying a house if it costs no more than 2.5 times your annual income, you can put at least 20% down, and the total monthly payments (including mortgage, maintenance, insurance, and taxes) would be 30% or less of your gross income. Otherwise, renting is probably a better idea.