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Financial Literacy - March 24, 2022

Habits That Will Keep You From Getting Rich

There is no single formula for success. But there are a few habits to avoid that could keep you from getting rich. 

Not everyone deliberately aspires to be rich. But nearly everyone wishes it. However, if you do the former, you must understand the habits preventing you from getting rich.

Author and speaker John C. Maxwell put it rather succinctly: “If your habits don’t line up with your dream, then you need to either change your habits or change your dream.”

Most individuals dream of becoming wealthy, but you may make that goal a reality with proper planning and determination. 

There is no single formula for success. But there are a few habits to avoid that could keep you from getting rich. 

You need to know these limiting habits if you want to reach a net worth of six, seven, or eight-figures.

Self-made people start from the ground up and grow their wealth over time, starting with basic money skills like budgeting and then moving on to saving and investing.

The money habits of the newly rich are behaviours that just about anyone can learn from, no matter your financial circumstances when you first start.

Here are 5 habits that will keep you from getting rich.

1. Failure to adhere to a budget

Even millionaires and billionaires require budgets; otherwise, they would not be able to stay wealthy for long.

Budgets are often thought of as restrictive, yet the clever among us see them as tools that can help us attain our financial goals faster. 

It’s fine to set aside some money for short-term desires, but after taking care of your fundamental needs, you should prioritise saving for your long-term ambitions.

While saving for retirement should be a top priority, you may also have other goals in mind, such as purchasing a new car or a home. 

Decide how much money you want to devote to each goal every month, but keep in mind that the more goals you have, the longer it will take you to achieve them all.

2. You listen to poor people’s financial advice

You were told as a child that the only way to get a good-paying career was to go to school. The truth is that working for someone else will not make you wealthy.

It would be best if you stopped taking advice from unsuccessful people. Talk to people that are where you wish to go.

You are surrounded by people without your consent, and some of them become your friends. 

You are the average of the five persons you spend the most time with. Guess who will be the sixth if you hang out with broke people?

3. Taking up too much debt

Debt with a high-interest rate costs you a lot of money, gives you worry, and puts your financial stability in jeopardy.

Please make an effort to pay off any high-interest debt you may have immediately so you can begin saving that money instead of handing it to someone else each month.

And, once you’ve paid off your debt, don’t take on any more, or you’ll find yourself in the same situation as before.

4. Only having one source of income

Poor individuals believe that working is the only way to make money. The number of jobs one can do, and thus the amount of money one can make from working, will always be limited.

If you cannot work for the next four months due to an emergency. What sources of income will you have?

The math is straightforward, the more income sources you have, the less likely you will become bankrupt.

According to research into the distribution of wealth among the wealthy, 65 per cent of self-made millionaires had three streams of income, 45 per cent had four streams of income, and 29 per cent had five or more streams of income.

Poor people can only make money if they work. It shouldn’t matter how much money the side hustle makes as long as it pays the bills while you’re away.

5. Not making an investment

Investing is one of the most effective ways to build wealth and one of the only ways to ensure that your money grows faster than inflation. 

Investing is not the ideal option for your emergency fund or short-term funds that you plan to need in the next five years, but if you want to become wealthy, you should surely invest your long-term savings.

READ MORE: 7 Signs that You are Smart with Money

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