In sum, the word principle is always a noun. Essentially it means “rule.” It will never appear as an adjective. Its only possible adjectival form is principled.
The word principal is an adjective or a noun. As an adjective, it essentially means just one thing: “main.” As a noun, it refers either to people or money (or a rafter).
With these ideas now firmly in mind, you can see how your main high-school principal, who knows about finances, might refer to his primary money rule like this:
the principal principal’s principal principal principle
It is, after all:
the main principal’s primary money rule
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