Too busy to read?

credit is one of the most vital factors in getting rich, but because it's hard to wrap our minds around it, we often overlook it entirely. It's time to wake up and pay attention to it (and not just because of the credit crisis), because establishing good credit is the first step in building an infrastructure for getting rich. Think about it: Our largest purchases are almost always made on credit, and people with good credit save tens of thousands of pounds on these purchases. Credit has a far greater impact on your finances than saving a few pounds a day on a cup of coffee.

I love to laugh at people when they talk about investing. People think that investing means "buying stocks," so they throw around fancy terms like hedge funds, derivatives, and call options. Sadly, they actually think you need this level of complexity to get rich because they see people talking about this stuff on TV each day. Guess what? For individual investors like you and me, these options are completely irrelevant. It sounds sexy, but when individual investors talk about complicated concepts like this, it's like two elementary school tennis players arguing about the string tension of their racquets. Sure, it might matter a little, but they'd be much better tennis players if they just went outside and hit some balls for a few hours each day.

The single most important thing you can do to be rich is to start early.

Some wealth planners say that you should aim to have at least the equivalent of your annual salary saved for retirement by the time you are thirty, three times that sum by the time you are forty, eight times by the time you are sixty, ten times by retirement, in order to maintain your standard of living. Someone used to all the perks of a PS100,000 salary would need to have at least PS1 million saved to not feel poorer in retirement.

Should you save in the Lifetime ISA instead? An alternative to a pension is the Lifetime ISA. This is a savings account to save for a first home and/or retirement, open to anyone under the age of forty. As with other ISAs, you don't pay tax on the returns on your savings. You can put in up to PS4,000 a year and will receive a bonus of 25 per cent - that is up to PS1,000 - from the government until you are fifty, or until you have used the LISA to buy your first home, whichever is sooner. You can use the money to buy a home worth a maximum of PS450,000, otherwise you cannot take it out before you hit sixty without losing your bonus and some, the equivalent of about 6 per cent of your total pot. This is more flexible than a pension, though, where you cannot take the money out at all before fifty-five. Savers have the potential to earn a total of PS33,000 in bonuses if they pay in the maximum PS128,000 from age eighteen until they turn fifty. Accounts can be held in cash, or stocks and shares. If you are a higher-rate taxpayer the LISA is not as generous as the tax relief you get on a pension, however.

SAVINGS ACCOUNTS I would not encourage anyone to use a standard branch-based savings account. Online savings accounts let you earn dramatically more interest with lower hassle. And because you'll primarily be sending money there, not withdrawing it, what does it matter if it takes a few days to get your money?

AVOIDING MONTHLY FEES Maybe I'm too demanding, but if I'm lending a bank my money to re-lend out, I don't believe I should have to pay them additional fees. Think about it: If your Big Bank charges you a PS5 monthly fee, that basically wipes out any interest you earn. This is why I'm fanatical about my savings and checking accounts having no fees of any kind, including monthly fees, overdraft fees, or setup fees. If you already have an account at a bank you like, but they're charging a monthly fee, try to get them to waive it. They will often do this if you set up direct deposit, which lets your employer deposit your paycheck directly into your account every month.

the vast majority of young people don't need a financial adviser to help them get rich. We need to set up accounts at a reliable no-fee bank and then automate savings and bill payment. We need to know about a few things to invest in, and then we need to let our money grow for thirty years.