1. Weigh every purchase based on a cost/benefit analysis. As fanatic savers, the affluent constantly look for ways to reduce expenses and avoid spending money on high-ticket items that have little value or are merely status symbols. For the rich, few items, are purchased without a great deal of thought. While they have no problem spending big on homes, vacations and their childrens educations, they are tightfisted about almost everything else. They always think in terms of alternatives. When shopping for cars, for example, the affluent look at models that cost $60,000 and those that cost $10,000. Then, they may decide they can get most desired features for just $25,000.

2. Put discretionary money to work. Theres one thing that those who never have any money have in common-when they have discretionary money, they treat it as if it were a blessing. They usually spend it on merchandise that brings only temporary satisfaction. When the rich come into money, they save it. They understand the importance of allowing money to grow in order to keep pace with inflation. They also understand how easy it is to lose money, and they dread tha possibility.

3. Prefund lifes big expenses, such as a college education.

4. Pay down your mortgage.

5. Participate in your companys 401k program if it has one.

6. Sign up for a monthly automatic transfer from your bank account to a mutual fund.

7. Buy a cash-value life insurance policy to force yourself to build up some assets.

8. Take out a bank loan to make an investment.

9. Dont borrow money to pay for assets that have little or no value.

10. Figure out how much money you need to get from here to there.

Strategy:
* Determine how much money you spend each year.
* Calculate how much income youll need each year-before taxes-to equal this sum. Subtract from the total the amount youll receive each year from social security and retirement funds, since they are virtually guaranteed.
* the result will be the amount youll have to make up in investment income.
* compute how much capital invested at 7% is necessary to produce the required taxable income.