The Weekend Edition is pulled from the daily Stansberry Digest.

Many Americans – average folks working to build a comfortable life – assume the "rich" have a secret...

It seems they know something about "how the world works" that the rest of us don't.

If regular folks could just figure it out, they'd be wealthy, too. They'd live with less stress, more time, and more money. And money, after all, gives you the freedom to do what you want.

As it turns out, the wealthy do harbor a secret – three of them, in fact. And today, I'm going to share them with you...

These secrets (or "tenets") are a great starting point, not just to build wealth... but to use it to live the life that you want to live.

So if you'd like to understand how to truly build wealth – and how to use it to live freely – here's how you need to think...

The first tenet is to curb your spending and save religiously...

Many people do the exact opposite of saving. They don't just spend money they have. They spend money they don't have.

Folks in America like to "keep up with the Joneses"...

The problem is, the Joneses are financially irresponsible. They've got too much house, they've leased luxury cars, and they have credit-card debt. If you try to keep up, you'll get dragged down as well. According to the Federal Reserve, almost four in 10 Americans would struggle to come up with $400 in cash to fund an emergency.

When you see someone who seems to live too well for the job he has, he doesn't have a secret skill. He often has a secret pile of debt.

But you don't have to become a monk. One benefit of wealth is having money to spend on a few things that bring you joy. For me, I don't hold back when spending on books or travel. It's different for each person.

A good rule of thumb is to choose one or two things you truly enjoy spending money on. Then cut back to just the basics on everything else.

For example, I still drive the same 15-year-old Hyundai. It serves me well, and I don't have to make payments on it. Instead of laying out money for a new BMW that won't make me happier, I can spend the money that would have gone to a car payment to treat myself to a couple of really nice dinners each month.

I think everyone should start by socking away at least 10% of their annual income. Try to bump that up to 15% as you get comfortable with your new spending habits.

The key to saving successfully isn't about raising your income. It's not about saving a penny here and a penny there. It's about understanding yourself better and shaking all the frivolous desires from your mind.

The thrill of spending wears off quickly. By contrast, saving money and using it to increase your personal financial freedom does make lasting improvements to your well-being and quality of life. Money saved generates future income. Income is what sets you free. And freedom is what truly makes us happy.

Being a diligent and disciplined saver is a critical first step... But that alone isn't enough to put you on the path to wealth.

You must also follow the second tenet – learn to be an investor for the long term...

Think about this...

Imagine you work hard and aggressively set aside 20% of your earnings in cash for 30 years. After that Herculean effort, you've saved up... six years of income.

Not too impressive. Twenty percent is a high savings rate. But it won't do squat to set you up for retirement if it sits in cash.

If you don't invest the money, it's barely worth saving at all...

Why do you need to invest?

Because real freedom comes from income. And income comes from invested savings.

"Investing" applies to any activity that uses capital to create more capital...

If you own a small business, you can invest in advertising. Investing in education can build your skills and boost your income. Even investing time in learning on your own can help you get ahead.

But for many folks, the primary means of investment is through public markets – stocks and stock funds.

It's easy to put off getting your finances in order until next year...

The good news is, the simplest and most straightforward investing plans are ideal for beginners – especially when adjusted for fees and risk. Even if you lack a passion for investing, you can still devise a simple starting plan out of three principles...

Invest in index funds: There are two types of funds. Actively managed funds have a portfolio manager who tries to find the best investments and beat the market. Index funds simply track the market.

Hiring high-priced experts may sound like a good idea. But it turns out, active managers are terrible. A recent study by Morningstar found that only one in four large-cap funds beat the market over the previous 10 years.

You don't need funds with active – and expensive – management. Index funds perform better and cost less.

Avoid fees and taxes: One of the reasons why index funds work better for individual investors is that actively managed funds involve fees... And fees and taxes will add up to tens or hundreds of thousands of dollars over the years.

Investment funds charge annual management fees. For expensive funds, this can be around 2% of the account value. But index funds can charge as little as 0.16%. Use cheap index funds and tax-advantaged accounts like 401(k)s and individual retirement accounts ("IRAs") when you can.

Make consistent investments at regular intervals: We've all heard that we should "buy low, sell high." But how do you know what's low or high? Investors have a million ways of trying to answer that question.

One simple way is to invest a consistent amount of money at regular intervals, like once a month or quarter. As a result, you'll necessarily buy more shares of a stock when markets are cheaper and fewer shares when markets are more expensive.

The entire concept of building wealth and freedom requires that you earn a return on your savings. Outside of a lottery prize or other financial windfall, a working individual can't merely save enough to become free.

And if your spending comes out of your savings, you'll never enjoy it. It's only when you hit the crossover point when the income you generate can cover your spending that you can truly enjoy the freedom that wealth can bring.

But folks who invest too aggressively run the risk of undoing all their good work.

That's why you must follow the third tenet – obsess about risk...

When they first start investing, many people focus only on the possibility of big returns. They're drawn to the chance (however remote) of doubling or tripling their money in a short amount of time. I could rattle off dozens of investments with the potential for a high return right now. Some readers would gobble them up.

But most successful investors pay far more attention to the other half of the risk-reward ratio... Return means nothing without considering risk.

It can take a lot of effort to save up $2,000 or $5,000. When you take big risks, you can wipe it all out in a flash.

Risks lead to losses. Losses lead you to question the wisdom of saving and investing. You need to avoid risk by investing in high-quality stocks.

But more important are the concepts of diversification and asset allocation...

Here's why...

You should never put more than 4% to 5% of your portfolio into a single stock. When you invest in a basket of stocks with big upside, only a few need to go right to boost your returns. Likewise, if one stock falls quickly, your losses will be smaller. (Positions in funds can be larger because each share represents partial ownership of multiple stocks. It's another good reason to own index funds. They provide automatic diversification.)

As the stocks you invest in get riskier and more expensive, you should put a smaller percentage of your capital into them.

Having a diversified portfolio means you're not going to double it in one year – but it means it likely won't get cut in half, either.

You also need to diversify across asset classes. Stocks, bonds, real estate, gold, and other investments move in different directions and are influenced by different economic factors.

By holding multiple asset classes, you reduce your risk and increase the return you get per "unit" of risk you take on.

When you obsess about your risk and not your return, you end up with a strategy that works over the long haul.

Now, it's important to find the perfect harmony here...

Why don't most folks get rich? Because they don't follow all three of these tenets at once.

As we pointed out, savings without investment don't grow – and worse, they'll get eaten away by inflation.

However, if you try to invest but save only a little, your balance will look too puny to keep you excited about it. And if you still love to spend, you'll soon find yourself tapping into your brokerage account.

Finally, losing money will obviously wipe out your savings. But it may also discourage you from investing.

Only by following all three of these tenets can you successfully set yourself free from living paycheck to paycheck.

Here's to our health, wealth, and a great retirement,

Dr. David Eifrig

Editor's note: On Thursday, Doc released an urgent update on what might be the No. 1 investing secret of all time. In short, he believes we've stepped into a brief window of opportunity... when the confusing (and destructive) forces in the markets – like high interest rates – can actually work for you. It comes down to the strategy that Doc uses with the majority of his own money...

Doc showed viewers why this situation is an incredible setup for earning outsized, low-risk income. And to help folks get started, he even shared an actionable stock recommendation that's yielding nearly 8%. If you missed his video, make sure you watch the replay here.