Part of the American dream is that everyone can begin their journey to wealth. With enough time, hard work and smart financial steps, anyone can become a millionaire. This does not mean that everyone will reach this big milestone. The sad reality is that the average family will need to save up millions of dollars if they want to have at least some chance to keep their standard of living in retirement.
Millions of people around the world dream of financial freedom. Others hope to achieve financial independence and resign early. How many of them are making efforts to make these dreams come true? How much do they sabotage themselves?
Here we look at some of the most common reasons that will prevent you from ever acquiring significant net worth.
Are you afraid to invest
For a typical employee, it will be almost impossible to become a millionaire, at least without investing. Several movie stars and professional athletes will violate this rule.
You may feel safe without worrying about investments, but you lose money every day after inflation destroys your purchasing power. If you want to achieve and maintain financial independence, you will need help in increasing interest by investing.
Although there are risks associated with investing in any of the stocks, bonds, ETFs, mutual funds and even home buying. Risks do not invest even more. Without assuming any investment risk, you are most likely guaranteeing yourself that what you are so afraid of will happen in retirement - you will go bankrupt.
You are not saving enough
Even assuming that you have overcome your irrational fear of the stock market and created the perfect investment portfolio (or used the fiduciary financial planner to create the best investment plan for your situation), if you do not save enough finance to move along the path, you will never millionaire. In the end, you don’t need to do anything, just don’t spend it.
You live beyond your means
If you make this monetary mistake, you are not alone. There are many people who are trying to finance their cherished dreams. They push their budget to the limit. Some live from paycheck to paycheck, while others fall into the expensive trap of credit card debt. In the best case, you do not accumulate any wealth here. In the worst case, you are preparing for bankruptcy or forced to work forever.
According to the National Credit Counseling Fund, about a third of American families carry credit card debt month after month. This may mean that thousands and thousands of dollars a year go down the toilet with crazy credit card interest.
Spend money on debt payments
This mistake has led many to a state of transition from one financial crisis to another. It also goes hand in hand with life beyond your means.
While good debt, such as a mortgage or perhaps student loans, can help you build wealth over time, consumer debt (credit cards) is likely to become a major obstacle to financial freedom.
Get a credit card debt certificate today; the longer you set aside, the larger the hole from which you dig out, and the more money you will end up “flushing into the toilet”.
You do not have an expense plan
Do you cringe every time you hear the word "budget"? When people have enough money, they do not just perceive their financial choice as an accidental event. Money does not appear on its own. However, many people are surprised when this monthly bill appears (again every month) on their credit card or bank statement. Simply put, an expense plan is to manage your financial expectations to avoid unwanted surprises, and so you will still have money for the best in life. Think about vacations, clothes, massage, or even money for babysitting.
First, consider your basic expenses, which easily fit into your income. Secondly, your spending plan will open the way for big purchases, such as a vacation, a new car, and so on.
If you do not have an expense plan, you will always continue to spend everything that is in your bank account any day. This is likely to mean that you will never have the money needed to pay for a big ticket. Or, even worse, you will receive huge credit card bills that you cannot pay each month.
Without a spending plan, you are likely to just continue to pay whatever is in your bank account and you will never have money when large expenses (such as college for your children) will be on your wish list. Or even worse, the funds will be on your credit card, accumulating catastrophic amounts of interest.
You have chosen the wrong career path
Any person with any income can become a millionaire. Big salaries will increase the chances that you will achieve status with a million dollar net worth.
For those who hate their job or career, this can be difficult. This can lead to a slowdown in career growth over time. Although this may be easier said than done, choosing the right career path that will help you earn enough to maintain your desired lifestyle and that you really like is an important life task for many. It is not as difficult as it might seem at first glance. It’s actually easier to find a truly enjoyable job than, for example, love in life. You only need to decide and decide, work, and then receive from this not only joy, but also impressive amounts.
You have chosen the wrong spouse
There are many financial benefits of getting married. Choosing the wrong spouse will greatly hamper your path to potential wealth. If one of the spouses is the sponsor, and the other is the rescuer, then, most likely, both partners will crash financially. Everyone needs to work, contributing to the family budget. When considering your life partner, do not forget to consider how each of you thinks about money.
You have no purpose in life
Those who have a purpose or passion in life feel much better. They don’t need to get up every morning without the desire to start working. They love what they do, because they know what they can achieve by working on a particular project.
It may be tempting to choose a job or career based primarily on salary, and also think about the quality of life that it will ultimately provide for you and your loved ones. Follow your passions and dreams, and money will follow, as they say, after you. There is a risk in everything, and everyone can “get off the rainbow,” but it’s important to understand that the more global and serious your goal is for you, the more likely it is to win and get what is dreaming.
You do not need to do this alone. Work with a fiduciary financial planner to clean up your financial home, and maybe you will also become a millionaire. The main thing is planning and accounting for all the small details, and you can achieve what you want.