10 (More) Reasons You're Not Rich by Jeffrey Strain
Wednesday, October 1, 2008provided by
Many
people assume they aren't rich because they don't earn enough money. If
I only earned a little more, I could save and invest better, they say.
The
problem with that theory is they were probably making exactly the same
argument before their last several raises. Becoming a millionaire has
less to do with how much you make, it's how you treat money in your
daily life.
The
list of reasons you may not be rich doesn't end at 10. Caring what your
neighbors think, not being patient, having bad habits, not having
goals, not being prepared, trying to make a quick buck, relying on
others to handle your money, investing in things you don't understand,
being financially afraid and ignoring your finances.
Here are 10 more possible reasons you aren't rich:
You
care what your car looks like: A car is a means of transportation to
get from one place to another, but many people don't view it that way.
Instead, they consider it a reflection of themselves and spend money
every two years or so to impress others instead of driving the car for
its entire useful life and investing the money saved.
You
feel entitlement: If you believe you deserve to live a certain
lifestyle, have certain things and spend a certain amount before you
have earned to live that way, you will have to borrow money. That large
chunk of debt will keep you from building wealth.
You
lack diversification: There is a reason one of the oldest pieces of
financial advice is to not keep all your eggs in a single basket.
Having a diversified investment portfolio makes it much less likely
that wealth will suddenly disappear.
You
started too late: The magic of compound interest works best over long
periods of time. If you find you're always saying there will be time to
save and invest in a couple more years, you'll wake up one day to find
retirement is just around the corner and there is still nothing in your
retirement account.
You don't do what you
enjoy: While your job doesn't necessarily need to be your dream job,
you need to enjoy it. If you choose a job you don't like just for the
money, you'll likely spend all that extra cash trying to relieve the
stress of doing work you hate.
You don't
like to learn: You may have assumed that once you graduated from
college, there was no need to study or learn. That attitude might be
enough to get you your first job or keep you employed, but it will
never make you rich. A willingness to learn to improve your career and
finances are essential if you want to eventually become wealthy.
You
buy things you don't use: Take a look around your house, in the
closets, basement, attic and garage and see if there are a lot of
things you haven't used in the past year. If there are, chances are
that all those things you purchased were wasted money that could have
been used to increase your net worth.
You don't
understand value: You buy things for any number of reasons besides the
value that the purchase brings to you. This is not limited to those who
feel the need to buy the most expensive items, but can also apply to
those who always purchase the cheapest goods. Rarely are either the
best value, and it's only when you learn to purchase good value that
you have money left over to invest for your future.
Your
house is too big: When you buy a house that is bigger than you can
afford or need, you end up spending extra money on longer debt
payments, increased taxes, higher upkeep and more things to fill it.
Some people will try to argue that the increased value of the house
makes it a good investment, but the truth is that unless you are
willing to downgrade your living standards, which most people are not,
it will never be a liquid asset or money that you can ever use and
enjoy.
You fail to take advantage of
opportunities: There has probably been more than one occasion where you
heard about someone who has made it big and thought to yourself, "I
could have thought of that." There are plenty of opportunities if you
have the will and determination to keep your eyes open.
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