Ten Reasons Why You Are Not A Millionaire
There is a perception that people who are not able to achieve millionaire status because they do not work hard enough. Hard work is not the only factor that determines whether you become a millionaire. This is not to say you won’t need to work hard. You must. You don’t need a high salary to accumulate assets worth more than a million dollars, but you do have to make good financial decisions (and avoid making bad ones). You don’t need a high salary to accumulate assets worth more than a million dollars. But you must make smart financial decisions and avoid bad ones. There are exceptions, but there are also those who are lucky enough to win the lottery. Would you bet on your retirement if that was the case? Here are 10 reasons that could very well be a contributing cause of why you’re not currently a millionaire:
You Spend More Than You Make
There are no secrets, and there certainly is nothing magical, when it comes to the basics of personal finance. To keep your finances under control, you must spend less than what you earn. You will always be short of money no matter how much you earn if you fail to follow this simple rule. This goes even further. It is not enough to simply spend less than you make. It is important to actively save and invest some of the money you earn. This amount is usually recommended to be around 20% of your annual income. If you aren’t putting aside 20% of every paycheck you receive and placing it into long-term savings and investments, chances are you aren’t going to become a millionaire.
You Try To Meet Other’s Expectations
There is nothing which will keep you from reaching your financial goals faster than trying to live up to other people’s expectations instead of your own. It’s more commonly called “keeping up with the Joneses.” If you try to live like a billionaire before you can afford to be one, you will never become one. You will only end up building debt and spending money on items that are not going to impress anyone. You don’t pay yourself first
Paying yourself before paying anyone else is one of the best ways to save money. You should pay yourself 20% of your salary before paying any bills or other expenses. You will always fall short of your savings goals if you pay yourself last. You have kids.
This is probably not the most popular reason on your list for why you aren’t a millionaire. But the truth is, children are very expensive. Children are very expensive. If you’ve already built up some wealth, and planned for the costs of having kids into your budget, then the costs can be reduced to a certain extent. But this is not the case for most couples. When you have children at a young age, your ability to accumulate wealth will be greatly affected. Compound interest is so important for wealth creation and the earlier you start saving and investing the better. However, it’s almost impossible to save money when you have children. When this is the case, all the extra money you have inevitably ends up going toward the children’s care instead of being invested for wealth creation.
Your House Is Too Big
Some people assume that purchasing a big house is a good investment. It’s true that buying a bigger house than you can afford can prevent you from creating real wealth. When you buy a large house, your costs for it will also be higher. The real way to build wealth is to buy a home that fits your budget and needs. You can then use the savings you make by not buying a large house to invest in creating wealth. You replace things too soon
Just becuase there’s a newer, shinier version to the gadget you bought a year or so ago does not mean you have to buy the new gadget. You may have trouble building wealth if you are the type who replaces products with a long life span to purchase the latest gadgets. People who have built their wealth are the ones that can afford the newest and shiniest things by upgrading every year. People who are able to afford the newest and shiniest things by upgrading every year are those who have already built their wealth, not those that are currently trying to.
You Let Others Take Charge Of Your Finances
There is nothing wrong with getting the opinions of others to help you lay out a plan to build your wealth, but it’s important to be an active participant in this planning. You will not be able to achieve the wealth you want to create if you give someone else control of your finances. You must understand and regularly evaluate the financial decisions that are made to ensure that they meet the goals you set. You fail to take care of your health
Getting sick is the fastest way to drain your wealth. You may not have control over all aspects of health but you can still take steps to ensure that you are as healthy as possible. You can live a healthy life by eating right, exercising, taking preventative steps, having annual checkups, and addressing medical issues before they get serious. You Get Divorced
While getting married is a great way to build wealth, a divorce can have the opposite effect. Divorce is the fastest way to ruin the wealth you’ve built. That’s not to say that you should stay in marriage solely for financial reasons, but it’s important to know that divorce is usually a giant wealth destroyer, and getting a divorce will hamper the best-laid plans to become a millionaire.
You Have One Or More Bad Habits
A bad habit is anything that takes money away from you without giving more in return. Smoking, drinking alcohol and gambling are all bad habits. But a bad habit can also be drinking three expensive sodas or an expensive cup of tea every day. You don’t have to buy anything. It is a bad habit to sit in front of the television for five hours every day, instead of improving yourself. Depending on the number of bad habits you have, and how much they cost you on an ongoing basis, these alone could be keeping you from becoming a millionaire.
Bonus Reasons:
You Don’t Educate Yourself
Studies of the wealthy generally show that high net worth individuals spend a consistent amount of time learning job related skills. Tom Corley says that the wealthy spend at least 30 mins a day reading career-related material. They can improve their skill set, making it easier to convert time into money, increase market returns or run their business (here). You don’t exercise
The wealthy work extremely long hours. They work an average of over 50 hours per week. To maintain their pace, rich people usually work out at least 30 minutes per day. Jogging, biking, walking, or jumping rope are all examples. Exercise helps your brain produce glucose and allows neurons to grow. Harvard University says that people who exercise more tend to make more money. And, as a result when people exercise more, they tend to make more (per Harvard university).
Wrapping This Up – Even If You Aren’t Rich Now, You Can Still Do It
Getting rich is not easy – but it is doable. If you are not wealthy now, you can still become rich if your adopt good habits and save and invest regularly, live frugally, and avoid hitting financial landmines like getting divorced or buying a large house. It takes years to become wealthy, but it is possible and rewarding. .
For More Amusing Saving Advice Reads, consider these:
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(Photo courtesy of Enkhtuvshin)
