Have you every wondered why some people are rich and others are not? Have you wondered ‘will I ever be rich’? People have several definitions of being ‘rich.’ Someone may think he or she is rich because he’s or she’s healthy or that she’s living a comfortable life. For me, being rich encompasses all of these things.
But most importantly, being rich means that you have a substantial amount of money. And therefore have a lot of options in life, like retiring early. There’s nothing wrong with that. There’s, in fact, something wrong if you have poor money management or poor way of thinking about money. If so, you will never be rich.
From living beyond your means to having only one source of income, here are 9 signs that you will never be rich. If you are serious about accumulating wealth, it makes sense to work with a financial advisor to help you develop a solid investment and financial plan.
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Signs That You Will Never Be Rich:
1. You Will Never Be Rich if You’re Working for Someone Else Or Have One Source of Income
If you spend your whole life working for someone else, the odds of being rich is slim to none. Again, there are exceptions. If you are a successful attorney in a big law firm, or a successful CEO of a major corporation, etc, you can become rich. But if you are a 9 to 5, minimum-wage worker, with no other sources of income, you will never be rich
The rich people know that having their own business is the fastest road to wealth. They know that they must create multiple streams of income. They know that one source of income is not going to cut it.
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2. You Only Focus on Saving Your Money and Not on Earning
Don’t get me wrong, saving your money and not spend every piece of it is very important to building wealth. However, focusing only on savings and neglecting earning is not the way to go. Rich people focus more on earning. They too save their money, but they recognize that the key to getting rich is to focus on earning.
If you focus only on living frugally, on coupons, you might lose major opportunities like investing in the stock market or in real estate. You have to have multiple streams of income and make your money work from you. And the one way to do that is to invest it.
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3. If you Invest, You’re Only Invest in Mutual Funds
One of the best ways to earn more money over time is to invest it. Investing in mutual funds, just like saving in a high yield savings account, has some benefits. Namely, your money has very little or no risk. But it will not get you rich. You will most likely get rich in investing in the stock market or in real estate.
4. You Started Investing Too Late
As any well-qualified financial advisor would tell you, the earlier you start investing, the more likely your money can grow, thanks to ‘compounding interest.’ When it comes to growing your money, time and compound interests are your best friends. See, the more time you spend without investing, the less likely you will be rich. If you are in your early 20’s or late 30’s, you should start now, even if you only can start with a small amount of money.
5.You Think You Will Never Be Rich
Some people, because of their culture, upbringing, or religious beliefs, think that they will never be rich. They believe that being rich is a privilege awarded to a select few, or the lucky. They believe that well, no one in my family is rich, so I will never be rich. Yet one thing they fail to realize is that, most rich people were once poor and hard-working individuals.
Everyone has the same opportunity to acquire wealth. True, some might face greater roadblocks than others. But the opportunity is there for everyone to grab.
The poor also believes that being rich is evil. If you have this kind of thinking, you will never be rich. For you to be rich, you must believe that you have every right to be rich. You must set high expectations. You must think of money as a friend and not as the enemy. You must be willing to step out of your comfort zone.
6. You Live Above Your Means
If you buy things you cannot afford, you won’t get rich. Some people believe that if they start earning more, or get a big raise, they are justified to give themselves a lifestyle raise. This is a big mistake. Successful people, before they became rich, live modestly. They don’t spend their money on frivolous things.
7. You Buy Things on Impulse
If every time you are at the store (whether it is a shopping mall or a grocery store), you see something that you like and immediately buy it, you might be an impulse shopper. You will never be rich if you buy things on impulse. Wealthy people do not buy things on impulse. If they want something, they budget for it. They bring a list with them when they grocery shop. They use cash and leave their credit cards at home.
Related: How to Stop Impulsive Buying
8. You Don’t Take Advantage of Free Money, namely 401k
The question of why you will never be rich is not even that difficult to answer, because sometimes we just pass up free money, namely an employer 401k. If an employer 401k is available to you, why not take advantage of it. Many employers match your contribution to a 401k, so you get pretax investing, tax-deferred compounding, and an extra bonus from your employer.
We simply cannot beat it, because your contribution comes right off the top of your paycheck before taxes, all of your earnings compound tax-deferred, and many employers match your contribution, and your contribution is automatically deducted from your paycheck; you never see it and you never have to make the decision of not to invest.
9. You Don’t Have Any Work Ethic
The rich or the wealthy did not become wealthy or rich by accident, unless of course they won the lottery or inherited a large sum of money. The path to become rich requires hard work, persistence despite failure, discipline and courage. Successful and rich people know early on that becoming rich is not easy. If you wan to build wealth and be successful you have to have a good work ethic.
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