Becoming wealthy, achieving financial success, living life on your own terms - these are all things people want for themselves when they think about their finances and their future. Unfortunately, many people never actually realize their dreams of becoming financially successful not because they can't, but because perhaps:
- They don't prioritize their financial well being (e.g. They focus on everyone else before themselves)
- They simply lack the knowledge to be successful with money
- They don't think they can
...and these are just a few reasons.
It's important to understand that building wealth isn't about luck. It doesn't just happen to some people and not to others. Building wealth is about putting in the hard work, planning, consistency, discipline, and accountability and very importantly maintaining good money management skills.
"Building wealth is not about luck. It's about planning, hard work, discipline, and consistency."
It is also very possible to build wealth regardless of your current financial situation or how much you currently earn. There are thousands of success stories of people who came from nothing that managed to achieve incredible financial success and this means anyone can be financially successful if some serious effort is put into the process.
In this blog post I'm talking about 7 things people do that prevent them from ever becoming wealthy - avoid these things and you'll be well on your way to financial success.
1. Not having the right mindset
You might have heard this before but having the right mindset when it comes to your life and finances is essential for success. The way you think about things translates into how you act. In addition, you have to first decide in your mind that you want to achieve financial success because when you are mentally prepared, you will do what it takes to achieve your success regardless of how bumpy the road might be.
Having the right mindset includes believing that you can be successful, making up your mind to put in the work and learning how to self-motivate and self-inspire.
2. A lack of self-discipline
Self-discipline is one of the biggest areas people struggle with when it comes to financial success and even I struggle with it at times. People set up their goals with good intentions but as time progresses they don't always stay the course. There's the battle of wants vs. needs, wanting instant gratification and of course the emotions that come with it.
Having a bad day and feeling down or having a great day and feeling excessively happy and deserving, are notorious for many failures and goals falling off track so how do you combat this?
In my experience, I find that having a strong desire to succeed is the first step - you have to want it bad enough and you have to be clear on your WHY. Self-discipline takes practice and this means you need to make a conscious effort to improve your self-discipline every single day. You also want to be sure you keep your goals visible so you can see them every day and stay motivated.
In addition, accountability is key, and if you struggle with self-discipline then consider finding someone to keep you accountable for the actions you take and around the financial goals you have set.
3. Not making debt payoff a priority
Debt sucks and if you have it, you don't need me to tell you that. The problem with having debt is that most people don't prioritize paying it off. They are comfortable with making minimum payments or paying a little extra but don't go as far as figuring out how long it will take them to pay it off and haven't created a plan to aggressively do it.
Aggressively attacking your debt means reducing your expenses and/or increasing your income AND putting the extra funds you come up with against your debt. It means selecting a debt pay off method, following through and understanding that the aggressive stance is only temporary. Once you are done knocking out your debt, you'll have more money at your disposal which you can put towards the things that truly matter to you including your long-term savings.
4. Not saving enough
If you want to build wealth, you have to save. The biggest mistake anyone can make is assuming that because they have a great job or income they have time to save and can always do it later. The truth is job securit, for the most part,t is not guaranteed and your business might go through a rough patch, plus life happens.
A good idea is to set up an emergency fund if you haven't already with a goal to have 3 to 6 months of your basic living expenses to cover any unplanned life circumstances. Next, determine how much your short term, mid term and long terms goals will cost you and make a plan to begin saving for them.
5. Not planning ahead
Specifically for retirement. Again this is an area that many fall short in simply because they think they have time or they feel retirement is so far away. Well if you are dreaming of living life fabulously come retirement, it's going to cost you a lot of money and the type of money that you'll need to sustain you over several years takes time to save and grow, so the earlier you start the better.
Start by contributing to your employer sponsored retirement plans and take advantage of any match they offer. Also, consider opening up an IRA to increase the amount of money you can save towards retirements while taking advantage of the tax benefits. Keep in mind that you can save for retirement outside of your retirement accounts with post tax money. The overall goal is to save as much as you can towards the life you plan on enjoying in the future.
6. Not investing in yourself
This applies to investing in your personal growth and development. Reading books, taking courses, educating yourself, improving your skill set and so much more. When you invest in your self development and follow through with it, you stay in the frame of mind to succeed and do well.
The fear of failure, ah! This is a big one. Too many people stay stuck in sucky financial situation s because they are afraid to fail. They are afraid of the effort, the sacrifice, the commitment and that they will make mistakes or lose their money. They are afraid that good money management is too time consuming or too difficult to learn.
Well, if fear is holding you back, it's time to understand you cannot succeed unless you try and that means taking things one step at a time. If you finances seem overwhelming at the money, that's ok. Take things one step at a time. Start by taking an assessment of where your finances currently stand and then create a budget and a long term plan. Struggling to do it on your own? There's no shame in seeking help. Don't let the fear of failure keep you stuck.