Most people do not become rich by chance, but because of established habits and unmistakable strategies. Most likely, you will not succeed if you focus only on saving money, living beyond your means, or if you have not started investing. You can become rich by creating multiple sources of income, investing in a pension fund and setting clear financial goals. Wealth requires a solid foundation for good habits.
There are several signs that prove that you are probably not yet on the road to financial success.
You work hard, not smart
At school, we are taught that hard work will help us move forward in life. But this is only the tip of the iceberg. If you work hard, and that will be the only thing you do in your life, you will never be rich. Because it’s not enough to work hard to make money and put it aside.
Rick Edelman, a financial advisor, says you must also work smartly to secure future wealth. He suggests that you work wisely, investing your money, for example, in the stock market, that is, using the benefits of compound interest, so that your money will bring you income. You can do this without much risk, without much effort, without spending a lot of time.
You are too focused on your savings and not enough on your income
Increase your income, not just your savings. Savings are necessary for creating wealth, but do not focus on them, because this is the best way to neglect your income. It is important to cut costs, manage your cash flow and not take into account lifestyle inflation, but if you cannot increase your income, it will be difficult for you to achieve your goal.
In some cases, you need to spend less on daily expenses, but if you reach the limit and can earn more money, the benefits will be much more. There is no need to abandon practical savings strategies. But you need not be afraid that you may not have enough money, but strive to earn more.
You buy things that you can not afford
If you live beyond your means, you will never be rich. Even if you start earning more money or getting promoted, this does not justify an increase in your lifestyle - especially in the housing sector.
If you live in a house and in an expensive area, you will begin to behave and consume, like your neighbors. The more prosperous this area will be, the more its inhabitants will spend on almost every conceivable product and service. This does not mean that you cannot buy beautiful things, but it is difficult to continue to create wealth when you struggle to spend even more.
You are satisfied with a stable salary
For most people, it seems most appropriate to receive payment on time (salary or hourly rate), while the rich prefer to receive payment in accordance with their results. They are usually independent or have multiple sources of income. This does not mean that there are no successful people who calculate their salary, but in most cases this is the slowest path to prosperity, which is also considered the safest. It is best to know that freelance work is the fastest way to achieve wealth.
While the world class continues to build a business and build fates, most people guarantee themselves financial mediocrity, while maintaining work with a modest salary and its annual increase.
You have not started investing
One of the most effective ways to make good money is through investment. It’s best to start as early as possible. On average, wealthy people invest 20% of their family’s income on investment each year. Their condition is not how much they earn each year, but how they saved and invested over time.
You do not need to be a financial expert or use sophisticated economic jargon to start investing in the stock market. You do not need to be from a rich family or to earn a lot of money. Start by investing in your retirement or low-cost index fund and you will make huge profits in the long run.
You do not follow your dreams, but others
In order to succeed, you must love what you do. It means fulfilling your dreams. Too many people make the mistake of pursuing someone else's dream, like the dream of their parents. When you follow someone else's dreams or goals, you stop loving your chosen profession. Your productivity and pay will only reflect what you earn for a living, and you simply will not have a passion for success.
Once you have decided what you like to do, be sure to master this business. Acquisition of skills is our “most powerful weapon” for creating wealth and job satisfaction.
You have no financial goals
If you want to create wealth, the process will become easier and probably more enjoyable when you set clear and specific financial goals. It can be buying a house, traveling, a good pension. Write down your goals somewhere and draw up a financial plan to achieve them. Achieving wealth requires concentration, courage, knowledge and great effort.
Spend first, then save
If you want to get rich, you first need to save money for yourself. Instead of spending and then saving what’s left, save first. Set aside the equivalent of one hour per day of your income in an emergency fund or other savings account and automate the process. This will help increase your savings.
You think getting rich is unrealistic for you
Most people believe that wealth is a privilege granted only to the lucky. The truth is that you have every right to be rich if you are ready to create tremendous value for others. Start with the question: “Why not me?” Then think big. Rich people have high hopes for the future. Why, for example, not to earn 1 million euros?