Money Mistakes That Keep You Poor
In this post I explain the glaring 8 money mistakes that keep you poor and never get you rich.
Money is something what we all must have a good healthy relationship with.
And that is such an important thing to realize, you have a relationship with money.
Now I am not saying you will go on a date with your money, but you need to see your money or money in general as your best friend.
Let me give you a personal example.
One of my mentors is a frugal and phenomenally successful investor, who is very wealthy.
He screams abundance and lives an incredibly happy and stress-free life as his money works primarily for him.
So, when I asked him what his relationship was like with money he replied with the following:
“My best friend is my wallet, aka my money!”
I was a bit confused I never heard that statement before, and I was desperate to ask him in a little more detail of what that meant.
Basically, by “money being his best friend,” it means he can pretty much do whatever ever he wants, and it is always there for him.
“People come and go,” he continued, “but I made sure I got into a position that money was always there for me.”
I found this philosophy fascinating and seeing him as one of my most important financial mentors, I was really impressed with how he viewed money in general.
Which begged the question, “what are money mistakes to avoid making money aka my wallet my best friend?”
And full disclosure I am not saying do not have any friends, but make sure your money works for you, not you work for money.
That is another problem most people have as well.
At the point of writing this, I did not realize that I was receiving money coming in from two of my several income sources.
And without realizing just like that “money is working for me.”
But what you do not realize is the years of hard work, and hours of blood, sweat and tears to get to the stage where money comes to me without really doing anything.
It is important to understand how big a factor your mind plays in this, and I have many videos on this channel discussing exactly how you can adjust your mentality so that you can attract money into your life effortlessly.
However, there are 8 mistakes you must avoid in the meantime when it comes to money.
If you eliminate these mistakes, I assure you, your life will change dramatically.
And full disclosure I am really annoyed this is not taught in schools, because this information can literally make or break a person.
And, most of your assumptions of money have either come from your parents, your boss, or friends you associate with.
It is time to wipe the chalkboard clean and go back to the drawing board.
#1 – Acting Beyond Your Means
This is a difficult one because it kind of contradicts what the law of attraction says, yet it doesn’t at the same time.
By acting like your rich, you become rich.
I genuinely believe it.
But by spending money like you are rich, when you are clearly not, is not a good idea.
Instead simply by walking, talking, and acting like you are, 100% works in adjusting your poor mentality to a rich mentality.
But spending all your money on an expensive car, house, or vacation is NOT the right way to do it initially when you cannot afford it.
If you are spending money to impress other people, then you are NOT living the right way either.
You should spend your money on what makes you happy, NOT what makes others impressed by you.
For instance, I bought an awfully expensive watch last year, yet I hardly wear it.
I wear the $50 one instead because, it makes me happy.
You must avoid social media too when it comes to money.
Every person is different with their money, and yes they may have fancy cars and luxurious lives but you do not know if that is funded by wealthy parents or they too have crippling credit card debt looming over them.
Never EVER spend beyond your means to flaunt a lifestyle you cannot afford.
That will set you up for crippling debt that will bring you to your knees financially.
#2 – Gambling, Cigarettes and Drugs
I have sadly to say spent and lost loads of money in my past on these vices.
There is a reason why they are called vices because they are destroying your health, and especially your wallet.
Gambling is literally like burning money, and I luckily have become free of this horrible addiction.
But cigarettes for example are burning a hole in your pocket daily!
If the average smoker decides to smoke a packet a day that is roughly $10 a day going on cigarettes.
That is $3305 a year on cigarettes!
Think about what you can do with that money!
You can clear credit card debt, go on a vacation, or even treat yourself to something luxurious.
Nothing good has ever come out on spending money on those three things.
Kick your habits in the butt as soon as possible!
I have said this before and I will say it again, but if you quit these vices you will become rich.
I am dead serious, please trust me on this.
#3 – Hoarding Cash
There is an old fable of a man who saved money for the whole of his life.
And he kept saying to himself “when I retire, I will be rich.”
So, he saved and never invested a penny.
And the moment he finally retired; he was sat upon a huge pile of money.
But sadly, when his income stopped that’s where his problems began.
He had huge house repairs, he was living a life beyond his means, and slowly but surely his money completely disappeared!
The man died poor, even though he played it safe and never took a risk.
Basically, what can we learn from this?
If you hoard and be a miser, you are inevitably going to lose your money.
I have not even factored inflation at this point, and in case you did not know the value of cash and money itself is falling every year.
By simply not doing the right thing which was making money work for him, he worked for money and life inevitably told him where to put his money.
Instead he could have invested his money and made his money work for him.
So by the time of his retirement he would still have savings in the bank, but also multiple sources of income coming to him every month to fund his new lifestyle.
Never think just saving for the rest of your life and hoarding your money is the right approach because you will get burnt badly and that money will run out eventually.
It’s like those who inherit money from wealthy family members and are useless with money.
Chances are they will blow all that money on fast cars and big houses only to find that they never invested and cannot afford their lavish lifestyles.
#4 – Bad Investing
Now I am not a financial advisor, you should always seek the advice of a trusted professional in where to put your money.
However, let me give you a personal story of somebody who invested badly.
Shortly after the 2008 financial crash, a guy I know inherited money from his dead grandfather.
It was a substantial amount.
Then he received a financial tip from a person he barely knew that “property in Eastern Europe is cheap and a sound investment, guaranteed to double in 10 years.”
Without hesitating, he took a flight over to that country he was advised to invest in and invested ALL of his inheritance without consulting anybody.
5 years later he lost 50% of his money, the market of that country collapsed, and the houses he bought were not structurally safe either.
FYI I am not saying Eastern Europe is a bad place to invest!
I am saying he just went on a hunch and invested his money with no research at all and got severely burnt.
He also paid over the odds because he knew NOTHING about what he was buying.
But guys, that’s why we have the internet, mentors, advisors who are experts.
Do NOT be like this guy and be so reckless with your money!
With the amount he lost he could have bought 2-3 homes in London and been well off financially!
Instead, he felt greedy, was rather foolish and lost a fortune.
#5 – Not Covering Expenses
When I was in my 20’s I was useless with money.
Let me emphasize that I was USELESS!
I had NO IDEA what I was earning, or what I was spending.
I just used to go around and think money will always be there working for me, and I spent way beyond my means.
However, when I had business problems a few years back, that was when I was truly on my knees confused about what I was doing.
It was that moment I spoke with my father, who was an accountant of all things by profession and I asked him how to handle my expenses.
He told me to get open an excel spreadsheet, sign up to internet banking (which I didn’t have), and total up my expenses.
Then after doing that he advised me to multiply my monthly expenses by 3.
His advice was simple, “have 90 days’ worth of expenses, at all times, as a safety net if things god forbid go wrong.”
Ever since doing that, I have managed my money so much better.
By those who are living pay check to pay check, and living for the moment is only good short term, because life is a marathon not a sprint.
Total your expenses and do the 90-day expenses fund and leave it somewhere that it CANNOT be touched too.
This is the epitome of the rainy-day fund, and it will save your backside if need be.
#6 – Only Having One Source of Income
A guy I know personally was really successful at his job, and earnt a really good salary.
However, by doing so, he lived the good lavish lifestyle, fast cars, huge apartment you name it.
But suddenly, the recession happened, and through no fault of his own he lost his job.
He worked in a real specialist field, and there were no jobs like what he had at all.
He also blew all his money on unnecessary expenses.
And by doing this his one source of income disappeared making him financially bankrupt.
The secret to financial success is to have multiple sources of income.
Just today I received two payments from two completely different sources.
It is time to diversify your portfolio or to have several jobs or hustles and to NEVER rely on just one thing.
Those who truly master this become multi-millionaires.
#7 – Afraid to Take Risks
Think back to the frugal man who saved all his life for his retirement.
Risk takers are successful.
However reckless risk takers are losers.
There is a huge difference in the two.
When I first invested in real estate, I never bothered checking how much the property went up or down, because I am in it for the long haul.
I do not like quick money scams, or fast money opportunities.
I like the long run.
Look at my brand SCG SHOW I have not earnt a penny from it, but I see the bigger picture.
By working hard and building up my brand, in the future it will generate me money.
The risk I have taken is time, and energy because I believe in the project.
If you have money sitting in the bank collecting dust and losing value due to inflation, why not TAKE it so you can get it to produce an income.
Speak to a financial advisor and do not be afraid to take calculated risks.
A calculated risk, is one where you have weighed everything up and said, “it looks viable lets go for it.”
Do not feel scared, trust yourself and do not put all eggs in one basket.
Nobody did not get successful in anything in life without taking a risk.
#8 – Living for Today
Here is a perfect example of someone I know.
He was living pay check to pay check and he had a pretty average job as a chef.
Suddenly he thought “I want a new car!”
So he went an put a deposit down on the best sports car he could afford.
This guy literally had only $500 in his bank account.
Suddenly the pandemic happened, and he was fired instantly.
Sadly the restaurant never reopened, he also couldn’t find another job.
And now last I heard he was eating a cup of beans for dinner every single day.
So, my point is amazingly simple do not live for today.
Yes you can treat yourself occasionally, but living for today only damages tomorrow.
Let me tell you something you can bargain with the future for making sacrifices today.
So by NOT overspending, especially on fast cars and expensive items, you can bargain with the future to have enough money to spend it on a bigger house, a nice watch, or a luxury vacation.
These are money mistakes that you must avoid to have a better financially independent lifestyle.