we all wanted to “How to get Rich Quick” .Money is a very delicate issue for many people. This issue can be so contentious that instead of managing their money. People will avoid the topic altogether and solely focus on earning and spending it. In short, there are two types of people who increase their wealth and those who lose it. A good example of someone who earns a ridiculous amount of money. But lost it all is the famous boxer, Mike Tyson. Despite earning over 300 million dollars in his career. In 2003 he declared bankrupt and was reported to be in more than twenty million dollars worth of debt. Needless to say, money mistakes happen and these mistakes can cripple your finances. No matter how much money you make so let’s get into the 10 mistakes that you must avoid.
Number 1: Spending on drugs or cigarettes.
Doing a drug or two in college may have been fun and seemed harmless at the moment. But the truth is that constant use can have negative effects on both your health and your wallet. If you calculate how much drug and cigarette users spend Money in a week. For example, a pack of cigarettes costs nine dollars and eight cents. And many cigarette smokers smoke a pack a day. This amounts to 63 56 a week or three thousand three hundred. And five dollars and twelve cents a year. The same amount of money could cover the property taxes on your home or a two-week vacation. But sadly many drug and cigarette users fall into this habit through curiosity and peer pressure. The end result of this habit is a hefty toll on both your health and your wealth.
Number 2: Spending more than you make.
This can be tempting to do especially as a young adult. It can be tempting to blow your money right out of college. When you are making a consistent income for the first time in your life. Buying that new car moving into a new house and flying first class they’re all appealing things to do. But the problem with them is that you tend to end up living paycheck-to-paycheck. If your income can’t cover these costs. This issue can be like into lifestyle inflation whereby an increase in earning. Will cause you to increase your living expenses. And an increase in paycheck shouldn’t warn you to increase your cost of living. However, the majority of people feel that they should reward themselves once they get paid instead this cash inflow should be directed into prolonging your wealth through investments and the acquiring of assets.
The biggest reason that people spend beyond their means is to impress others. they spend because their self-esteem is low but this is flawed thinking, many of us are guilty of this once you learn to delay gratification and forget about impressing people. you will then be able to grow financially. Social media is another cause of overspending. people try to spend huge sums of money trying to look rich without actually being rich. An internet entrepreneur for example who after being told he would never make a big business might buy an expensive car when he makes his first big sale in order to prove his critics wrong again falling into the trap of trying to impress others. this means of impressing others is a never-ending staircase. Be smart, create a budget and track your spending to ensure you avoid spending more than you make.
Number 3: Not investing wisely.
Hence, Investments can be really tricky and many people put their money into things based on tips from friends or a strong conviction that the prices of popular stocks will keep going up. Many people think that once they own an investment property that they’ll be financially set. Unfortunately, this is not the case sometimes tenants missed payments appliances, break, or the value of your property declines. So then For the wise investor, the key to making their assets produce is a liable stream of income is to obtain the proper knowledge about a particular market or product before putting their hard-earned money into this adventure. In-short makes sure to do proper background work on whatever it is you want to get into and not just because your friends are making money from it or a sales agent told you about the great benefits it has to offer.
Number 4: Following get-rich-quick schemes.
Get rich quick schemes are one of the surest ways of losing your money as the saying goes quick money brings quick problems and following a money scheme is bound to get you in trouble. get rich quick schemes include things like Ponzi schemes, pyramid schemes and make money overnight offers and are all set up to make the scheme originator rich by taking your hard-earned money. if you are looking into new business ventures and see opportunities that promise high returns with small risk then tread with caution, think of it like this if it takes 20 years in a career to make $200,000 and a new venture is saying that you can make that amount of money in a year, benefit was legitimate wouldn’t everyone be doing it in short when it comes to making money fast always employ your best judgment before signing on the dotted line.
Number 5: Not having an Emergency fund : let’s face it.
Generally, life doesn’t always go your way and sometimes you need cash. Everything in life costs money which is why not having an emergency fund set aside is a critical money mistake. However, almost 40% of American adults wouldn’t be able to cover a $400 emergency with cash savings or a credit card charge that they could pay off quickly. about 27 percent of those surveyed would need to borrow the money or sell something to come up with the $400 and an additional 12% wouldn’t be able to cover it at all. luckily you don’t have to be one of these people. saving these funds can be easy, all you have to do is set up a 10 percent automatic deduction from your pay with your employer that will send a portion of your paycheck into an emergency savings account.
Number 6: Having just one source of income
For most people having a sole source of income as a way of life and this income usually comes in the form of a salary. When it comes to income sources you need to think of yourself as a tree do trees grow fruit only from one branch the simple answer is no they have different branches producing flowers and fruits and so should you. you should keep developing and learning new ways to let your income work for you. this is not only wise but a safe way to help you sleep at night.
Number 7: Relying heavily on credit cards.
For many people credit cards can be a convenient tool for making purchases but for others they can be a one-way ticket to dead although you need credit cards for some business applications relying on them heavily can ruin you financially the use of credit cards promotes impulse buying it gives you the mentality that you can afford anything and everything all with an easy swipe in fact a 2001 MIT study found that sharper spent up to a hundred percent more when using their credit card to pay instead of cash so if you find yourself uncontrollably spending on credit. form the habit of paying with cash instead when you pay by cash you are physically handing over money and seeing the depletion in your wallet will make you feel the financial impact of the purchase much more than when you pay on credit.
Number 8: Being scared to take financial risks
As the saying goes no risk no reward and in order to make money you need to take risks. however the risks you take need to be calculated for instance putting your money in an index fund is higher risk than
leaving your money in a savings account but your money will never grow making the typical point zero nine percent interest at a savings account yields instead investing in an index fund. for example which mirrors the movements of the whole stock market has historically provided returns of 7% annually which is a calculated risk that in my opinion is worth taking number nine saving rather than investing, when you keep money in the bank it loses value over time due to inflation. However when money is invested wise it grows it’s that simple in mistake.
Number 9: Being scared to take financial risks is a mistake.
The only money you should be leaving in a savings account is money for your living expenses and your cash emergency fund. You have to save to invest and not save for the sake of saving money saved without any actual plan. Instance when you will become tempted to spend it on material goods like a new car, clothes or entertainment instead you should be getting that money to work for you by investing it whether that’s in the form of stocks real estate or startups. All these avenues offer a way to make new streams of income which is much more financially lucrative than bank.
Number 10: Having only one bank account
Having only one bank account is risky for a few reasons; first having one bank account will make the management of your money really difficult, by working with just one bank account you have to keep all of your emergency bill and college savings in one spot then if you splurge in Spanish cash you may risk not having emergency cash or tuition money readily available when you need it. This is why you should have at least three bank accounts one should be used for emergency funds. in case anything goes wrong another account can be for your day-to-day bills and a final account which I call a play account. your play account is what money you allocate for entertainment or vacation
These Tips will surely help help you in How to get Rich Quick.
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