7 Signs You Will Never Be Rich
vemuda.com - What if I told you that there were 7 telltale signs that you will never be rich would you want to know them?
In this post, I will share with you 7 signs you will never be rich so that you can avoid these mistakes and realize financial success in your own life!
Sign #1: You focus too much on saving
Now, don’t get me wrong, saving money is super important because if you never save money then you will never amass significant wealth but where poor people go wrong is that they focus too much of their attention on being frugal.
You see, most people don’t know how to increase their income meaning that if they want to save money their only option is to cut costs. However, the rich know that this strategy is not optimal.
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This is because even if you cut your expenses down to the bare minimum, if you aren’t making a large enough income to begin with then you will never amass significant wealth. It’s for this reason that wealthy people split their focus between both saving and earning.
Believe it or not, the average millionaire has 7 different streams of income meaning that they are just as, if not more focused on making cash than saving it.
Often these income streams include rental properties, dividend payments, business income and interest payments accruing on their investments meaning that these wealthy individuals are making money in almost every way possible.
So if you want to build real wealth, you should be putting just as much time into making money as you do saving it.
Sign #2: You overspend
As we just mentioned in sign #1, saving money is a key component in becoming rich but if you spend more than you make, you will never be rich!
Unfortunately, most people think that making more money will solve their savings problem but what’s most often seen is that as income rises, so does spending.
For instance, your standard sedan may suffice when you’re earning $50,000 a year but when you suddenly find yourself earning double, you may gravitate towards getting a luxury vehicle instead ultimately hindering your ability to save. The reason this phenomenon takes place is due to a lack of financial control.
You see, while school teaches you things like basic math and how to read, it never teaches you pertinent financial management skills that can help you build a solid understanding of the benefits of savings and investing which is why unless taught by their parents, many people have a hard time controlling their spending.
On the flipside, having this knowledge can make even those who earn low income rather wealthy overtime when proper spending and investing is done therefore if you want to be rich you absolutely must avoid overspending at all costs.
Sign #3: You’ve accepted the paycheck lifestyle
In life, you can either make money by running a business or collecting a paycheck and for most people, they choose the latter. Trading time for money at a 9-5 job is popular for many reasons.
Firstly, it is much easier to get a job than to start a business. Second, working a job offers things like benefits, a pension and a steady paycheck every two weeks whereas being a business owner doesn’t.
Finally, getting a job is really all we’ve been trained to do. As you grow up, you go to school, pick a college major and then hope and pray you will get a job in your field, working 40 or more years until to retire.
Unfortunately, school never shows you option B which is to start your own business and work towards amassing wealth beyond your wildest dreams.
This is why millions of people clock in and out of their 9-5 jobs each and every day while very few start their own business and let the market dictate their worth. But rich people understand that you will never become rich working for a paycheck.
This is because if your employer pays you more than that means less profits for the owners and given that humans are wired to be self-interested, your employers will always want to pay you as little as they can. Therefore, if you want to become rich you must ditch the traditional paycheck lifestyle.
Sign #4: You don’t invest your money
Chances are, if you don’t invest your money, then you will never be rich. One of the most effective ways to earn more money over time is investing it, and the earlier you start, the better.
Just take Warren Buffet as an example. Buffett bought his first stock at age 11 and by strategically investing over the course of many decades, has become one of the wealthiest people on the planet.
But it’s not just billionaires who practice ongoing investing. On average, millionaires invest 20% of their household income each year making investing a significant part of their wealth accumulation strategy.
Now, I personally didn’t start investing at a young age because I thought investing was complicated but over time I’ve come to realize that it’s easier than you might expect.
Simply setting up an investing account and making monthly contributions to an index fund or your retirement account is a great start to becoming richer than you ever thought possible.
Sign #5: You don’t challenge yourself
If you never step outside your comfort zone then you will never become rich. Unfortunately, most people settle into their paycheck lifestyle, going to their mundane job each and every day and then waste away their nights watching Netflix.
They strive to make every aspect of their life comfortable but the rich seek the opposite. What the rich know is that wealth creation starts where your comfort zone ends.
This is why entrepreneurs, especially the ones who succeed, thrive in uncertainty with many of them not knowing where their next paycheck will come from.
Take Jeff Bezos for example. Today’s world’s richest man held many high-profile positions in major tech and investment companies in his 20s but always felt like he was meant for something more.
While holding a senior vice-president role and making hundreds of thousands of dollars, Jeff decided to challenge himself and started a new book selling business which we all know today as Amazon.
So take a look at your life and if it seems like you are optimizing your life for comfort then you can kiss becoming rich goodbye!
Sign #6: You don’t have financial goals
In the same way that you can’t hit a target if it doesn’t exist, not having financial goals mean that you will likely never become rich.
When trying to build real wealth, the process will be easier if you have a clear, specific goal in place before forming a financial plan.
For instance, if you want to amass a million dollars, your first step would be to write this goal down and then detail the steps you need to take in order to get there.
Unfortunately for poor people, this first step can’t even be done because when it comes to wealth they don’t even know what they want.
Sure, they will tell you that they want more money or to be wealthy but they don’t even know what that truly means.
But if you ask a rich person this same question, they will tell you exactly what their goals are, how long it will take to achieve them and the precise steps they will take to do so.
Sign #7: You don’t pay yourself first
We’ve already established that saving money is one half of the equation to becoming rich but unfortunately most people hinder their ability to save by failing to pay themselves first.
You see, when they get paid, they dish out money to their landlord, credit card company, the government and many others which often results in them having little to nothing left for themselves at months end.
But as popularized by the book “The Richest Man in Babylon”, paying yourself first is one of the keys to becoming wealthy.
The book actually recommends paying yourself 10% of your income every month, ensuring that your savings will grow over time.
One way to ensure you save this 10% every month is to set up automated deductions from your pay.
Most employers will allow you to automatically deduct a portion of your paycheck which can be re-routed into a separate savings account.
This means that you never see the money you are saving making it much less tempting to spend it. And if you feel like you can save more than 10%, then go right ahead. The more you are able to deduct and ultimately save, the faster you will reach your financial goals.
As you probably guessed, the rich practice this habit religiously because if you aren’t paying yourself first then you are putting the financial goals of others before your own!
And there you have it, 7 signs you will never be rich and the changes you need to make to ensure that you reach all of your financial goals!
In summary: you will never be rich if;
1. You focus too much on saving
2. You over spend
3. You’ve accepted the pay-check lifestyle
4. You don’t invest your money
5. You don’t challenge yourself
6. You don’t have financial goals
7. You don’t pay yourself first
Thank you guys so much for reading! Please share this post and I will see you all in the next one.
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