11 Mistakes to Avoid Making When Building Wealth.
So you want to build wealth.
You've realized that winning the lottery isn’t a working strategy and you don't have a long-lost millionaire uncle waiting to swoop in and magically fill your bank accounts.
So what do you do?
It’s time to get your act together and start making a plan. One you will actually stick to.
Gaining wealth doesn’t have to be a mystery. It's not magic or luck or an accident. And if you know what to look for, you will know what to avoid.
Here are a few of those mistakes:
- Ignoring the plan you created - Wealth does, in fact, have to be planned. The easiest way to plan for it? Budgeting. It’s not as scary as it sounds. Budgeting apps are everywhere. You can have one in the palm of your hand in the next 45 seconds if you want to. Try one like Mvelopes or Mint to get started.
- Expecting your plan to work perfectly - Things will go wrong. A lot. Don’t put your emergency savings on hold. Start now with as little or as much as you want and continue to build it up. You will be thankful you did when you actually need it and have enough saved to cover your disaster no matter what happens.
- Not insuring the most important things - Without sounding too somber, you don't know how many more days you have on Earth. Are you prepared to take care of your family if something unexpected happens? What about if your house burns down? Make sure that everything that should be insured is insured, including your life. And your dreams.
- Spending too much on where you live - When buying a house, it’s easy to walk into the one that you’ve always dreamed of and want to move in immediately. Big mistake. Take a step back. Give it a day or two to sink in. Run some numbers--specifically mortgage, homeowners insurance, property taxes, utilities, furniture, maintenance. Make sure you aren’t biting off more than you can chew.
- Forgetting that you need to get your hustle on - You may love your job right now. But if you are employed by someone else, that job is not guaranteed. It's on you to hustle. Find that “thing” that you can do on the side to generate money. And do that too. That way, you will have something to fall back on if your job falls through.
- Investing in what everyone else tells you is "hot" - Just like you shouldn’t invest in something because you are comfortable and don't care about the money, the same applies to you investing in something you know nothing about. If you want to invest, but don’t have a clue where to start, do your research and speak with a professional.
- Gambling with money you need to live on - If you can’t stand the thought of losing your money, don’t invest it. Even if you think the investment is a sure-fire money maker, only invest what you had planned anyway. You aren’t psychic and the stock market doesn’t care if it’s your last dime or not. Don’t go hungry trying to bet on a sure thing because there are no sure things.
- Comparing yourself to what people are doing - There will always be people with more money than you -- and there will always be people with less. It is a waste of your time to compare your success to other people around you. You family. Your work. your community, church or local group. So stop making comparisons and stay focused on your plan.
- Using shortcuts to try to get rich quick - "Over the next three sentences, I’m going to tell you how you can be a millionaire by sundown." Sound familiar? Let me be very clear -- there are no get rich quick schemes that actually work. Success takes hard work, perseverance, and usually, a few setbacks. All of which are impossible to accomplish by sundown. So quit buying into other people’s shortcuts.
- Listening too much to other people's advice - What works for one person isn't going to work for everyone. Sometimes, people just get lucky. It has nothing to do with their skill or hard work. Sometimes, the timing is just right. And your time will come as well. Just like you need to stop comparing yourself to others, you need to stop taking everyone's advice. If it is part, of your plan, do it.
- Not having a big enough reason for building wealth - Money can be a tremendous tool for doing good in the world. For your family. For a cause that means something special. The truth is that wealth is an attitude long before it is a result. So if you don't believe in your cause or mission, you are not going to stick it out when things get tough and you start questioning your choices.
You are as good at building wealth is as you are at sticking to your plan.
Building wealth takes focus, planning and a level of stick-with-it that not a lot of people possess.
If you are not wealthy now, that doesn’t mean that you never will be. If you come from a long line of people who are terrible with money, that doesn’t mean that you will always be terrible with money.
It’s time to change your attitude about money. And to change your actions when it comes to building wealth.
Start by avoiding these mistakes.