5 Habits That Keep Us Poor: The Path to Wealth
We all can achieve wealth and financial security which is within our reach all we have to do is just make the necessary changes.
While everyone aspires to build wealth, only a select few manage to achieve it. What sets these individuals apart from the rest of us? The answer lies in our habits and mindset. In this article, we will explore a few key habits that keeps us poor.
- Paying yourself last: I first heard of this in the book, Rich Dad Poor Dad by Robert Kiyosaki and it’s one of the blueprints in achieving financial freedom. The poor people’s habit and that is paying yourself at last. So as soon as your paycheck comes in, you then pay your rent, your subscriptions and then you’ll save whatever’s left over if there is even any money left to save but the second method he talks about is the rich people’s habit and they do the complete opposite. They pay themselves first and that is what you want to do. Take 10% minimum and put that into your savings account the minute you get paid. Treat it like paying a bill. This is so important and by doing this, you’re guaranteeing that money will be saved.
- Paying too much in taxes: Taxes are going to be the single biggest expense in your life but you can legally reduce your bill legally is the key word here. They’re who are wealthy, they have knowledge of illegal corporate structures that come with tax advantages. They hire tax advisors that help them minimize their tax bill. So if you want to get one step ahead, one of the best ways to increase your wealth is through understanding tax rules in a way that stack up in your favor.
- Having expensive hobbies: A lot of people like to shop and I guess, yeah, part of this is retail therapy. But again, marketing, social media and these multi-billion pound organisations love to tell us how much we need to spend our money and spend our cash instead of keeping and investing it.
- Focusing purely on saving: If you want to improve your financial position, you can firstly save more of your existing income or you can make more money and create more income streams and the ideal combination is a mixture of both. You can’t build wealth if you’re making more money and spending it all but you also can’t if you’re just focusing on the saving side because there is a cap to how much you can save but making money side does not, it’s infinite.So to truly build wealth, you have to think of both sides of the equation, both how you will save a larger percentage of your income but also how you will make more money.
- Waiting too long to invest: When you start having savings, you have that stockpile, that buffer that we spoke about, then you want to start looking at investing that money so that your money starts working for you and you want to diversify those investments so you can weather different situations that come around in life, but you want to avoid leaving that money in a bank account because inflation is a thing and it means that you’re essentially losing money every year.
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