If you want to spend a wealthy life, There are a lot of financial mistakes to avoid and you have to manage your wealth.
In today’s world, 95% of products and services depend on money. So people only focus on how to make more money. But actually, they have to consider how to keep their money and grow it. Unfortunately, most of them avoid talking about money and keep going on the rat race.
Here is a video that explains the rat race.
If you want to know about how to grow your money and become wealthy, I’ll show you 10 financial mistakes to avoid and live a hassle-free life by managing your money.
Spend Money on Addictions and Bad Habits
If you have an addiction or habit that costs you money, you will be trap in the biggest financial mistake. A lot of people are addicted to drugs, gambling, and women/s. So they spend all of their income on those addictions.
As an example, let’s assume you are addicted to cigarettes and alcohol. You want to drink 3 cigarettes a day and 500ml alcohol. That means you have to spend dollars each and every day to consume those types of alcohol. Also, when you keep doing this bad habit, you have to increase the amount that you consume.
It doesn’t matter how much you make. You’ll never be able to keep the dollars that you earn. It will be the same with other types of addictions and bad habits.
You’ll feel happy when you do those bad habits. But one day you have to face health problems that are caused by those bad habits. After that, it’ll be too late to avoid this financial mistake and you have to spend money to treat your illness.
If you have any addictions that cost you money and affect your life, try to stop them. If it seems impossible to stop, get help from your friend or a family member and meet a certified doctor or therapist.
Spend Money More Than You Make
Let’s assume you make $2200 per month and you spend $3400 per month. And now you may think how I can spend money more than I make? The answer is, credit cards, loans, lend money, etc.
If you follow the latest trends, fashions, electronic devices, and other stuff that only cost you dollars without giving any profit. You are already on the losing side. Most of the time, you do those stuff to make other people happy. At the end of the day, you only did a financial mistake.
Also, social media and compare yourself with others is another issue that costs you money. if someone bought a new trending item and shares the best moment with that item on social media. You may want to do the same and share it on social media.
If someone bought a brand new car and share it on social media, you will compare it with your car and spend your money to buy a new car. So this is a trap that you have to avoid. If you keep compare yourself with others, you will always have to face financial issues.
If you want to avoid the financial mistake of spending more than you make, you have to live below your means. That means you have to keep discipline about your spending and focus on investing and make multiple income streams.
Save money without investing
Most people think saving money can make them rich. But that is a completely wrong idea. If you make your money and save it in the bank or any other place, you’ll never be able to get the real benefits from that money.
Let’s assume you earn $2000 per month and save $500 per month on the bank. Also, you’ll not get a high interest rate when you save money on that bank when compare to other banks. But you have to face inflation. That means, after 5 years from now, you’ll not able to do the things that you can do today for $500.
Also, if you only save money to buy stuff that does not makes you any profit. Again you are doing a huge financial mistake. But if you save money for investing, then you are on the right path.
For example, if you try to save $500 per month for one year, you’ll get $6000 at the end of the year, now you can start a business or invest that money in places that make you more money.
Do not save money without investing it.
Invest money without study
When you try to invest your money, there are a lot of options. The most popular investments are,
- index funds
- Real estate
- Unit trust
If you invest your money on any of those platforms you must study and learn about them before making any investment. If you don’t know about the investment type, you’ll only lost your money by investing.
For example, if you try to invest your money in the stock market, you have to understand how to read the financial report and get a complete idea about the company that you’re going to invest.
If you just invest money because of the popularity of the company. You’ll not able to get an idea about the market value of that company. You can’t get profit by blindly invest in anything.
Warren Buffet says,
Also, don’t try to do all of the investments at once. Try to invest in one platform first and when you have experience and make a profit. Move to other platforms or improve your knowledge on platforms that you are already familiar with.
Not start multiple streams of incomes
There are a lot of ways to start multiple income streams online, but if you’re only relying on your job or a single business, What will happen if you have to close your business or if you get fired?
You can focus on one business or your job in the daytime. But after you came home you can start to build other income streams. There are a lot of opportunities on the internet to make multiple income streams.
- Freelance Jobs
- Affiliate Marketing
- Social Media influencer
If you waste your time doing fun stuff without focus on your financial situation, try to start different income streams and achieve financial freedom.
Don’t take the risk
If you don’t take risks to achieve your financial freedom, you have to live a normal life. But when you take risks you have to take risks that can calculate.
So try to find obstacles that you have to resolve and calculate the risk by checking how much it will affect your life if you do it. If it does not badly affect your life, take the risk.
If you want to grow and succeed, you have to step out of your comfort zone. You have to take risks to achieve the targets of your life.
Those are the biggest financial mistakes to avoid. I hope you get valuable information. Feel free to check our other personal development articles. I’ll see you next time.