3 Common Mistakes That Destroy Wealth
Personal finance is 90% psychological. Most of you are getting in your own way when it comes to becoming rich. There are hundreds of reasons why this may be the case, but I chose to narrow it down to these three common mistakes:
1. You aren’t taking advantage of the job you do have.
In 2010, a study was done to measure the level of satisfaction people had in their careers and the numbers spoke for themselves. Only 30% of people are engaged in their work. The other 70% are either disengaged or, even worse, actively disengaged. You can read more about that study here.
I’m not here to tell you that you should love your job. There are few things I love in life and it takes a lot of me to classify something that way. Instead, you should respect your work. No matter how grueling, mundane, easy, or hard, that job affords you the opportunity to live and play. Why would you spend time not doing the best you can?
While you have that job, work as hard as you can. You may get a promotion. Even if you don’t get one for working hard, slacking off is a for sure way to guarantee that a raise will never come.
Hating your job is okay. That will give you the fire to educate yourself and become qualified for a career. Until that day comes, grind and squeeze every penny out of that gig.
2. You are addicted to car payments.
Yes, addicted. The definition of addicted is that you are physically or mentally dependent on a substance.
The car payment is not the substance, but the chemical release that happens when you drive your new car, is. It makes you think that paying $400 a month is the right thing.
Car companies do an outstanding job of paying for ads that make you feel like you achieved something by buying a new car. It is a lie. What they did is unload a depreciating hunk of metal off their lot and into your mental psyche.
One reason why I do not own a single car manufacturer stock is because of the large overhead costs they incur. It takes a lot of money to build new cars and ship them to you. It sucks up all the free cash flow from them. When people buy them, it sucks up all their free cash flow as well.
You want to be rich one day? Sell your car. Buy an older, reliable car and save on your monthly payments. Get off that narcotic.
3. You think stocks are for Wall Street geniuses.
News flash! That is what they want you to think. Why? Because they can use that state of mind to their advantage.
Let me explain. They know you are terrified of the stock market, but they know you want to make more money and retire safely. So, they sell you on the idea that they will invest your money for you for a “small” fee.
Just like that you just got duped into paying someone money for doing something that 16 year old can do.
That changes today. Read my posts or just ask me a question in the comments. I hope to inspire you to start building your own stock portfolio without paying a hefty dollar to an investment banker.
The other 10% to personal finance comes from education. When you get over the psychological hurdle that is yourself, learning about money becomes an easy task. You can read two or three highly-recommended books on personal finance and investing and come up with a strategy for your money.
I hope you enjoyed this post. Leave a comment below.