It is advisable to learn more from the mistakes of others than your own. It is also advisable to learn from the mistakes other successful people do not commit to get ahead in your own wealth journey. Here are the ten mistakes that rich and wealthy people do not make that you need to also stop making:
1. Not Investing in Yourself
America’s first millionaire, Benjamin Franklin, was known for saying, “An investment in yourself pays the best interest.” Often, people depend on their employers to buy them books, send them to seminars, or provide them with coaching. However, you must take your education into your own hands if you want to prosper. Invest in yourself.
2. Over-Entertainment
Yesterday, I popped into a local to see the grand opening. It was crowded with hundreds of young adults (ages 21-35) who were wasting precious time and money. Most people spend 30-50 percent of their paychecks on entertainment, while they temporarily escape the realities of life. Instead, rich people use that time and money to fund their dreams.
3. Buying on Credit
Many people purchase objects they can’t afford with money they don’t have to impress people they don’t like. This tragedy decimates many people, leaving them with a hopeless feeling when they repay their high-interest loans. If a person hopes to become rich, they will use their credit cards for growing and promoting their business, not funding personal expenditures.
4. Hiding From Your Spouse
Millions of married couples don’t talk about money. It makes them uncomfortable, which sometimes leads to arguments. However, you cannot get rich unless you disclose your financial precepts with your spouse. Money is only multiplied when love is in the mix and both members of the household have a clear understanding about their finances.
5. Mortgaging a Home
Some “rich” people mortgage their homes, but they aren’t really rich. Mortgaging your home leads to an endless battle of re-financing, bill-paying, and inflation. When you mortgage a home, you’re likely to pay twice as much as the original price! Rich people rent until they can buy their house with straight cash, like I did.
How you can survive in Nairobi with Sh. 20,000 net salary
6. Traditional Retirements
Our retirement system is a joke that must be evaded by those who want to become rich. If you’re depending on mutual funds, pension and certain life-insurance policies, you’ll do better boarding the Titanic. Plus, if you’re saving money to enjoy it for your sixties, that’s like saving up sex for retirement! Instead, build your fortune while you are young.
7. Buying Inferior Goods
Price shoppers and coupon clippers will hate this, but when you buy shoddy goods, you get shoddy results. If you live by the price, you die by the price. Instead of buying what is “cheap,” buy the best goods that are available. Rich people know that buying a 2,000 shillings shirt which will last for four years is better than buying a 100 shillings shirt that must be replaced every three months.
8. Lack of Enjoyment
Consumerism is funny. During 50 weeks at work, people think about vacations and when they finally get their two weeks, they only think about work. The truth about becoming rich is that you must enjoy the money that you already have, whether it’s 1,000 or 10,000. Your money will only expand if you appreciate it and think about how you can enjoy it more. You’ll always get more of what you enjoy.
9. Not Saving
Most people blow their money on miscellaneous goods. When they see ‘X’ amount in their bank account, they automatically think of what they “need” and purchase it immediately. However, this impulsive behavior must be eliminated.
Rich people save at least 10 percent of what they earn and rarely take out personal loans for themselves, even if they think they need it. Save.
10. Working For Money
The majority of people in this world work for money, but rich people let money work for them. They know that their money will be a byproduct of the service that they render to the marketplace. Rich people also acknowledge the fact that their material wealth is the sum total of their entire contribution to society. That’s why they never work for money.
Making these mental shifts can dramatically alter your life. When you start changing your financial habits and avoiding these mistakes, you will be on your path to be rich. Remember, it’s not what you acquire that makes you rich, but who you become in the journey. And of course, I hope to be your neighbor one day; maybe I’ll invite you to my home!