5 Reasons Why Most People Don’t Get Rich
Who doesn’t want to be rich? Being rich means different to different people.
Everyone wishes they were rich and had wealth that could last well over 3 generations. It usually takes two generations to build wealth that will make life a luxury for the coming generations. But for most people, life is merely about moving from one paycheck to the other, clearing off debts, managing expenses and saving up for retirement and children’s education. Not everyone gets a 6 or a 7-figure paycheck. But is a fat paycheck the only way that leads a person to become rich? Afraid, it’s not!
There are a lot of reasons why most people don’t get rich and here are 5 of those, which you will be able to relate to:
1. Becoming Rich is a Wish, Not a Priority
Sure, people keep talking about making it big in life and becoming rich by the time they reach a certain age. But just how many people do you know who make ‘becoming rich’ a priority? It requires you to take active steps on cutting down unwanted expenses, clearing off debts as soon as you can and looping plug holes where money is flowing out unnecessarily. Ask yourself how badly do you want to get rich? Bad enough to forgo eating out or cutting down on phone calls or not buying an expensive car and settling for an entry level car?
2. You Think It’s Too Late to Start Saving
While its true that the earlier you start saving, the more wealth you create. But that does not mean you shouldn’t start saving and think its too late to create wealth. Most people are not serious about saving money while they are in their 20s. Its only during the 30s that you take savings seriously. But its better late than never. Right ?
3. Using Credit Card is Thought to be a ‘Lifestyle’
No, spending on credit card is not a lifestyle, definitely not when you are trying to create wealth. The interest rates charged by credit card companies are exponential. Its x times more than the amount you actually spend! So, while you may have spent just $100 on credit card, if you do not have enough funds to repay the amount within a stipulated time, you will end up spending $600 while repaying it. So, refrain from spending through credit cards.
4. Passive Income – What’s That?
Living from one paycheck to the other will slow down your journey of building wealth. That is because one source of income is just not good enough to help you get rich. Find means of making income passively. Investing in shares and mutual funds could be one; if you have a property that’s lying vacant, rent it out. Taking up another source of income such as private tuitions or blogging could be another way of getting an additional income.
5. You Don’t Have a Plan
Building wealth is no child’s play. It needs time and a plan. Put together a financial plan and it will help you see things more clearly. Just how many types of portfolios do you want to invest in, which portfolio has the highest rate of interest, calculate the risk factors on the basis of the timeline you have in mind, invest accordingly.
Remember, never put all your eggs in one basket. Read up, ask people, understand the pros and cons of each type of investment and then invest.Creating wealth needs you to have a long term plan. You cannot be living just for today and let tomorrow take its own course. Keep an eye out for new trends in the investment and real estate markets, plan and move ahead.