If you did not already know, America has an astonishing amount of wealthy people. If your not one of them it could be because your not living like they are and making choices they made to become wealthy. You would be surprised to know that most wealthy people live just like you do in a modest house and watch what they spend. So what is their secret? Here are 5 mistakes you make that keeps you from becoming wealthy.
Slaves to the credit card
Wealthy people have credit cards but only use them on occasion. They pay off all balances within the 25 day grace period so they don’t waste money on interest payments. If your buying things you really don’t need and can’t really afford on a credit card and making the minimum payments your most likely never going to become wealthy. If you rely on your credit card to get by from one month to the other then your going to find yourself in a hole that will be hard to get out of and your going to throw away thousands of dollars in the process. You don’t become wealthy by throwing your money away. Get out of credit card dept by taking the lowest card balance and paying it off first. While your paying off the lowest card balance make the minimum payment on the other cards and take every extra dollar you have to pay off the low balance card. Then move to the next lowest card and repeat the process until all cards are paid off. This will free up hundreds of dollars a month to use towards building your wealth by investing it into mutual funds or 401 k retirement plans.
Borrowing other peoples money
There is a myth that poor people can’t have anything without having good credit and borrowing money. It is only true to a certain point. Most people need a loan to buy a house when starting out. This is usually a good investment in the long term so its not considered to be a harmful action in building wealth. This can actually help you. The big problem is most people use other peoples money to get that big screen television or that brand new car they think they just have to have in order to keep up with the Jones. These are luxury items that poor people can’t really afford and don’t really need.
New cars are horrible investments as they depreciate in value 50% or more in just 2 years. There are many options in getting a good dependable car. Start with a good used car. Let someone else pay the big new price and take on the big loss. Rich people have them but they can actually afford them and you can too once your wealthy. Bringing on more and more dept adds considerable risk and is not used by rich people as much as most people lead you to believe.
Playing the Lotto
Gambling of any kind is not a good plan to become wealthy. Gambling is a get rich scheme sold to poor people by the rich gambling industry. They are the ones who are getting rich. Lotto and power ball games are actually just taxes on the poor people. If you blow 30 dollars a month on any form of gambling then your loosing a lot of money. Take that 30 dollars and invest it into a money market fund for 20 years and you could retire very wealthy. That amounts to 360 dollars a year you give to some rich gambling company with nothing in return. Take that 360 dollars a year and invest it for 20 years and you could retire with an extra 30,000 dollars! Do the math, zero or 30,000 dollars.
These are just a few simple things we commonly do to keep from becoming wealthy. The greatest tool you have to being rich is your income. How you spend, save and waste your income will determine your end result at retirement. If you waste all your extra cash instead of using it and investing it wisely, then chances are your going to retire broke.
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