Do you wonder why?
We have collected 3 reasons you are still broke and the answers are so simple, that you cannot avoid being broke in the future.
Reason 1: You keep taking on debt.
Your economy is like a sinking boat – it keeps taking on water faster than you can shovel it out.
Most likely you are dealing with Credit Card debt, Car loan payments, mortgages and unforeseen bills appearing each month… this is due to a phenomenon called hyper consumption, which is induced by two things;
- Keeping up with the Joneses. Bascially you are striving for the correct image in terms of items showing off you wealth.
- You have been influenced by your parents and believe that age 25-30 you should have the same material items it took them years to accumulate.
The worst part is that it is not getting better any time soon!
The Good part is, you have all opportunities to change your financial behavior. It is time to set your sails vastly different from what you are doing now.
Fact Box – Typical expenses driving too high consumption
- You keep buying stuff you don’t need nor can afford.
- You spend too much money on eating out, rather than cooking at home
- Being late with credit card payments resulting in extra costs
Reason 2: You have no financial goals
While stopping over consumption is key, then setting clear goals for your economy is going to make a huge difference in stopping you from being broke.
Some examples would be
- Repay all debt within a certain period
- Create an “emergency” fund, which will help offset the unforeseen bills from time to time
- Establish a secondary and perhaps tertiary income, which can increase you ability to save continuously. Keep in mind that increasing consumption with an incrased income will keep you in the same place.
you want that income to snowball instead and start creating more and more wealth.
Reason 3: Stop caring what others think
The final pieces of the puzzle – and perhaps the hardest – is to stop caring what others think.
The reason is that we often try to imitate what others around us do, putting us in jeopardy of keeping up with them. However studies have shown that many millionaires wear simple clothes, drive old beaters and live in middle class housing together with people who are not affluent.
This is because they realise that a nice car, a boat, fancy clothes or dom perignon will not make them one slightest inch happier. Instead they get fulfilment from doing what they are good at while continuously extend their wealth.
In the book The Millionaire Next door this concept is fully described and I strongly recommend you read or listen to this book. You can find it here in the Bookshelf (Amazon Affiliate Link).
I have personally listened to it multiple times and still enjoy the stories of affluent people who are so grounded they do not care. Or as they say in the book Big Hat no Cattle, don’t wanna be in that category!
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