I am old enough to have learned many lessons the hard way. It’s been 40 years since I graduated college and started my career. Over that span, I have come to realize that some of the most important lessons I have learned did not come out of a book.

Consider my lifelong friend Bill, who passed away last week at the age of 62. In many respects, we were quite similar but when it came to investing we were as different as night and day.

First, a little bit of background on Bill so you understand his reasoning. His parents moved to Washington, DC to escape the coal mines of West Virginia. They opened a diner in 1952 and ran it for the next forty years until retiring.

Since Bill did not get an allowance from his parents, he started delivering newspapers at the age of 12. Every day (including weekends), Bill woke up at 5:30 a.m. to work his paper route and was finished by the time most of his friends (including me) were just waking up.

Bill never went to college. His parents didn’t have the money and he didn’t have the inclination. As far as Bill was concerned, he could learn a lot more in the “real world” than he would in a classroom.

I think you get the picture. Bill was someone who worked for everything he got. By the time he passed away, Bill had amassed a sizable portfolio of real estate and gold following his three rules for investing.

“If I can’t touch it then I don’t want to own it”

Needless to say, I do not agree with Bill’s aversion to intangible assets. I have spent nearly all of my adult life analyzing the stock market and believe it is the most accessible way for most folks to increase their wealth. You need a lot of money to buy real estate or gold, but you can invest in a real estate investment trust or an exchange-traded fund that owns gold with very little money.

However, I understand Bill’s distaste for putting his money in the stock market. His parents, like mine, were depression-era children. They witnessed the worst stock market crash of all time.

Try as I might, I could never convince Bill that tangible assets posed the same level of risk as intangible assets. During the depression, a lot of farms and homes were repossessed by banks foreclosing on mortgage defaults. That is a total loss, no different than watching a penny stock go down the tubes.

“Pay as you go”

Given his aversion to financial assets, it should come as no surprise that Bill did not care for financial liabilities, either. He claimed that he never took out a loan in his life for anything other than buying his first house. But after that, he only bought something if he could pay for it in full.

I disagree with Bill on this score, too. Debt, when used responsibly, can be a powerful tool for building wealth. Especially when it is used to buy an appreciating asset, whether it be real estate or shares of stock.

However, when debt is used to buy a depreciating asset such as an automobile, that is when strict limits should be set. But if the income is there to support debt used to build wealth, not doing so might actually be an impediment to optimizing the return on your financial assets.

“Never accept an offer”

Bill fancied himself an expert negotiator so he never accepted an offer to sell something he owned. Instead, he believed he could extract more favorable terms by explaining to someone else why they should want to buy what he had.

Again, I can think of cases where this approach to managing a financial portfolio could be counterproductive. When someone comes to you with an offer, that usually means they genuinely want what you have. For that reason, they are also more open to negotiation.

Lately, we have seen many companies accept offers to sell businesses that were no longer part of their long-term growth strategy. They may have gotten a better price for it later (or not), but by selling it now they have that capital to invest in more productive assets.

Looking back on it, I am amazed that Bill and I were such good friends despite our very different approaches to thinking about money and many other things. He had his opinions and I had mine. But we never argued, we only disagreed.

Perhaps the key takeaway here is that there is no one best way to achieve your financial goals. Bill and I managed to arrive at the about same place in life by following our respective, but very different, sets of rules.

If you aren’t managing your investment portfolio with a firm set of rules, perhaps you should consider the ones that I’ve developed over many years of painstaking research. I currently deploy these sophisticated methodologies in my new publication, Personal Finance Pro. Want to learn more about my next profitable trades? Click here for details.