Money, finance and wealth building is often overcomplicated, let’s break it down with some free financial advice to live by.

It seems as the world evolves, we (Americans at least) become greater and greater over-consumers, and the financial crisis we are experiencing is a testament to that. We buy more than we can afford, we eat more than we need to… we want bigger, larger, better. This is the reason why America is hemorrhaging with debt. Very few people have the discipline to build wealth that will one allow them to live comfortably without having to work in order to pay off debts.

That’s not to say that wealthy people can’t find happiness in their work, but they choose to work. That is a big difference than having to work in order to produce an income. It’s the difference between living stress-free and having no option but to work in order to give your money to someone else.

So, here’s my free financial advice that boils everything down…

Make More Money Than You Spend or Spend Less Than You Make

You have to start there. There are a lot of rich people who are broke because they are over-consumers and think a high income makes things different, but it does not. Debt is debt, and basic cash flow principles tell us that if more money is going out than coming in, that’s a bad thing.

This piece of free financial advice is the first step to producing wealth. It’s very simple, yet such a complex concept for most people to fully grasp and implement. Unfortunately, by ignoring this basic rule of thumb it is difficult - if not impossible - to ever get ahead.

We are programmed to believe that earning promotions and achieving a high income job is the key to becoming rich. That is a strategy, but it is not a guaranteed strategy. Remember that the goal is to have an income that exceeds your comfort of living, which will allow you to enjoy the greater things in life.

Unfortunately the majority that earn pay raises simply adjust their standard of living. Instead of keeping more money, we decide that more income means we can afford to spend that much more every week, month or year. So we adjust upwards. Nicer cars, more shoes, bigger houses.

That’s all great. I am a big fan of spending a lot of money on traveling the world, enjoying a great bottle of wine, and having nice things. But in order to allow myself to live that lifestyle, it has to be within my spending limits. The solution then is to spend less money elsewhere, make more money, or do both to further accelerate your ability to build wealth.

Take this simple, yet critical free financial advice and everything else will fall into place.