People often believe that working hard is the only way to become a millionaire, but the reality is that there are many obstacles and poor financial decisions that prevent you from generating wealth, although not necessarily a high salary. Exceptions exist, just like winning the lottery, but there are many reasons why someone is not a millionaire, such as bad financial decisions, failed investments, unnecessary expenses, lack of motivation, neglecting savings, not taking risks, little financial education , lack of initiative and not taking advantage of opportunities.
Here are 10 reasons that could very well be a contributing cause as to why you are not a millionaire today:
1. You spend more than you earn
There are no secrets, and there is certainly nothing magical, when it comes to the basics of personal finance. To keep your finances in order, you need to spend less than you earn. If you fail to do this simple thing, no matter how much money you make, you will always find that you don’t have enough money to make ends meet. It also goes one step further. Spending less than you earn is not enough on its own to generate wealth. You should also actively save and invest a portion of all the money you earn. Most people recommend this amount be 20% of your income. If you don’t set aside 20% of every paycheck you receive and put it into long-term savings and investments, you probably won’t become a millionaire.
2. You try to meet the expectations of others
There’s nothing that will stop you from achieving your financial goals faster than trying to live up to other people’s expectations instead of your own. This is more commonly known as trying to “keep up with the neighbors.” The simple fact is that if you try to live like a millionaire before you have the resources of a real millionaire, it is unlikely that you will ever become a millionaire. Instead, you’ll just rack up a lot of debt and spend money on things to impress people who probably won’t be impressed anyway. Trying to keep up with the Joneses when your salary can’t compete with the Joneses is a sure way to sabotage your chances of building wealth.
“Keeping up with the Joneses” is an English idiom that means comparing yourself to others and trying to keep up with them in terms of wealth, lifestyle, or social status. The term originated in a 1913 George McManus comic strip called “Bringing Up Father,” which featured a character named J. Wellington Jones, who lived a luxurious, consumerist life. The phrase became popular in the United States in the 1920s and has been used ever since to describe the social pressure of having to maintain a certain standard of living.
3. You don’t pay yourself first
One of the most fundamental steps you can take to ensure you save money for yourself is to pay yourself before you pay others. If your goal is to save 20% of your income, you should pay that 20% of your paycheck before paying any other bills or expenses you may have. If you try to pay yourself after paying all your other expenses, you will inevitably come up short at the end of the month from time to time (if not always) and won’t be able to save as much as you hoped. By paying yourself first, you commit that wealth creation is an important part of your overall plan and not something that will hopefully be accomplished after everything else.
4. You have children
This probably isn’t the most popular item on the list of why you’re not a millionaire, but the cold, hard truth is that children are expensive. Very expensive. The costs associated with children can be mitigated to some extent if you have already accumulated some wealth and have planned for the cost of having children in your budget, but that is not typically the case for many couples. Having children when you are young and on a limited income will greatly impact your ability to build wealth. Since compound interest is so important to wealth creation, and its cornerstone is that the sooner you start saving and investing the better, the fact is that it is almost impossible to save money when you are young and have children. When this is the case, all the extra money one has inevitably ends up going towards childcare instead of being invested in wealth creation.
5. Your house is too big
Some people assume that buying a big house is a good investment. While this may be the case, buying more house than you can afford is a good way to ensure that you won’t be able to build real wealth. The problem is that when you buy big, your household expenses are also higher. A larger home will mean higher tax payments, more expensive maintenance, more things purchased to fill the house, higher insurance payments, and generally more expenses than if you bought a home that actually fits your needs. The real way to build wealth is to buy a home that fits your needs and budget, and take advantage of all the savings you get by not buying the big house to invest in and build wealth.
6. You replace things too soon
Just because there is a newer, shinier version of the device you bought a year or two ago doesn’t mean you should buy that new device. If you’re the type of person who constantly replaces products that still have a shelf life in order to buy the supposedly latest and greatest gadgets, you’re probably going to have a hard time building the kind of wealth you want. Those who create savings to invest do so by getting great value from what they buy by using their purchases over the entire life of the items. The people who can afford the newest and shiniest things by upgrading them every year are those who have already accumulated their wealth, not those who are currently trying.
7. You let others take care of your finances
There is nothing wrong with getting the opinions of others to help you design a plan to build your wealth, but it is important to be an active participant in this planning. Giving complete control to someone else to manage her money is a sure way to ensure that she will not be able to generate the wealth she hopes to create. Creating wealth and maintaining it means you need to understand the financial decisions you are making and periodically re-evaluate them to ensure they meet the goals you have set. Giving complete control of your finances to someone else creates a situation where you are no longer in control of your financial future and the only one you can truly trust to look out for your best financial interests is yourself.
8. You don’t take care of your health
There is nothing that depletes your wealth faster than getting sick. While you may not be able to control every aspect of your health, there are certain steps you can take to ensure you are as healthy as possible. Eating well, exercising, taking preventative measures, getting annual checkups, and addressing medical problems before they become serious will allow you to live a healthier life. The better you take care of your health, the better your chances of creating wealth and maintaining it as you age.
9. You get divorced
Just as getting married can be a wonderful way to help build wealth, getting divorced usually has the exact opposite effect. In fact, getting divorced is one of the best ways to destroy the wealth you have accumulated up to that point. That’s not to say you should stay married solely for financial reasons, but it’s important to know that divorce is often a huge wealth destroyer, and getting divorced will hinder your best-laid plans to become a millionaire.
10. You have one or more bad habits
A bad habit is anything that takes money from you without giving more in return. The classics are smoking, gambling and drinking alcohol, but a bad habit could also be that expensive daily cup of coffee or the three sodas you drink every day. It doesn’t even have to be buying things. Being lazy and sitting in front of the TV for five hours a day instead of working to improve yourself is also a bad habit that hurts wealth creation. Depending on how many bad habits you have and how much they cost you on an ongoing basis, these alone could prevent you from becoming a millionaire.
11. You don’t educate yourself
Studies of the wealthy generally show that high-net-worth people spend a consistent amount of time learning work-related skills. According to author Tom Corley, the rich spend at least 30 minutes a day on career-related reading. This allows them to improve their skills, making them more effective at converting time into money, improving market returns or managing their businesses.
12. You don’t exercise
The rich work tremendously long hours. On average they work more than 50 hours a week. To maintain this rhythm, the rich usually do aerobic exercise for at least 30 minutes a day. This could include jogging, jumping rope, walking, or cycling. Exercise allows neurons in the brain to grow and produce glucose. Glucose is fuel for the brain; The more it grows, the smarter you become. And, as a result, when people exercise more, they tend to gain more.
In conclusion, getting rich is not easy, but it is doable. Even if you’re not rich now, if you adopt good habits, save and invest consistently, live frugally, and avoid encountering financial landmines (like getting divorced or buying too big a house), you should be able to become rich. rich. Keep in mind that getting rich takes years of work, but it is doable and very rewarding. .
