Live below your means

When I was in my twenties in New York City I knew a guy who worked very hard. Every Friday when he cashed his paycheck he would take his friends out for drinks, then dinner, then whatever club stayed open until daylight. He would awaken sometime on Saturday or occasionally on Sunday. And he would be broke. This is a true story.

I've known a lot of people who have very little money and others who have a lot. But those who have been happy -- and I mean happy for the long haul, not just an evening -- have happily lived below their means. They earn their money, they pay their bills and then they pay themselves. What I mean by this is that every paycheck had a component that had to be saved and invested for the person they were going to be in the future.

I know that it's hard at a time when one has so little resources. But getting in the habit of putting money away for the future doesn't have to be onerous. Make your own coffee, walk instead of drive, think whether you really need that new gadget.

You don't have to be cheap. But be thoughtful. Even those with extraordinary resources understand this principle: Cheap?