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When J.D. Rockefeller was a small boy, he was determined to become one of the richest men in America. He succeeded. I don't know if someone taught him the "secret," or if he instinctively came up with the idea without anyone's help, but at the young age of seven he was already teaching himself the basics of money management and the accumulation of wealth.

Not everyone has the drive and determination (some would say greed) to succeed at the level of a Rockefeller, but most people are quite capable of grasping some of the basic principles, the "secrets," the knowledge of which are essential to monetary success.

Young Rockefeller bought himself a note book and every day he wrote down how much money he had, every penny that he acquired and where it came from, and every cent that he spent accompanied by a detailed description of every purchase. He did this habitually, every day, well into his teens.

The process demonstrates the basic principle of accounting: "A penny in, a penny out." Anyone who takes the time to do the math and seriously consider where his money went, will, after a while begin to see his particular spending patterns. And if he has been honest and diligent in recording what he has been spending his money on, he will be either shocked by his frivolous, impulse purchases, or proud of his restraint and good judgement. Eventually (again, if the individual has been honestly analyzing his spending habits), the need for careful budgeting will become obvious. Priorities will be established. If the electric bill went unpaid because a pair of shoes were purchased for $100.00, a few days of darkness and cold showers could be a valuable economic lesson

If one budgets wisely and adjusts his life style to fit his income, instead of the other way around where one is constantly playing catch-up, slipping deep into debt trying to live beyond one's means, he will eventually discover a surplus of cash. If he spends less than he earns, this is inevitable. And if this surplus is handled wisely, for instance putting these funds into untouchable certificates of deposit (which pay a higher rate of interest than a regular savings account) or carefully researching and choosing a mutual fund to invest in, the money will grow.

There are a few cliches about money that have behind their simplicity sound economic principles. "A fool and his money are soon parted." "A penny saved is a penny earned." "Always save your pennies and always count your rocks, and you'll always have tobacco in your old tobacco box."

The basics are simple: simple and honest accounting; thrift (savings); sound investment; and wise discretionary spending of money from the surplus. Learning them on one's own is a bit more difficult and putting them into practice requires sacrifice and self-discipline.

But it can be done.

Learn more about this author, Arthur Daniels.
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