Becoming wealthy takes creativity, but it also requires hard work and a plan. There’s no easy button for it. Here are 11 money-mistakes to avoid on your path to growing wealth.
Investing in Crypto
We all have that person at a party claiming they’re on the road to riches thanks to crypto. Here’s the thing, so few people know what crypto even is, let alone how to wisely invest in it.
Crypto is highly volatile and it’s possible to lose everything. If you don’t understand it, steer clear of the investment opportunity.
Playing the Lottery
The lottery is fun to play. However, it’s no replacement for hard work and purposeful planning. The average person spends over $250 a year playing the lottery.
That’s a small number, but many people spend considerably more than that. If that’s you, just think of how better that cash can serve you.
Investing in Penny Stocks
Some investors love the lure of penny stocks. They view them as the next possible Microsoft or Amazon.
The sad truth is many of them aren’t worth a penny. Many have limited trading, and burn investors. Worse yet, it’s difficult to find reliable information on many penny stocks. It’s best to stick to blue chips or index funds if you want to grow wealth.
Having One Stream of Income
The average millionaire has at least seven streams of income. If you rely solely on your day job, it’s likely you’re hamstringing your efforts to get rich.
Multiple income sources provides diversity. They can also shield you from downturns you may experience. Thankfully, it doesn’t take much to create multiple streams of income. For example, many mailbox money ideas require only several hundred dollars to begin.
Partaking in MLM Schemes
Multi-level Marketing (MLM) seems like a great way to build wealth. After all, those that promote them talk up how people in the scheme have yachts, luxury cars, and more.
The simple truth is this, less than one percent of people who participate in a MLM actually turn a profit, according to the FTC. You’re better served by setting your cash aflame.
Not Taking Risks
As humans we generally hate risk. It makes us feel uncomfortable and we fear losing our money.
However, risk can and is a good thing, but it must be done wisely. Learn to embrace some comfort with risk and you’re more likely to build wealth.
Living Above Your Means
It’s fun to live a lavish lifestyle, but if you’re spending more than you make you will incur debt. That does nothing to build wealth.
Give every dollar you have a purpose and assign each one to your specific goals. This isn’t to say you can’t have fun, but wasteful spending will get you nowhere. Life is about balance, not overspending.
Driving an Expensive Car
Cars are horrible investments. They’re made worse if you have a high car payment. The average new car payment is nearly $720 a month.
Slash that in half and you cut put $4,320 in an IRA. There’s nothing wrong with a reliable and used Honda or Toyota, and they get you from point A to point B.
Not Saving Early
Time is the best gift you can give yourself and your money. Starting earlier allows your money more time to grow, thanks to compound interest.
Warren Buffett famously says, “My wealth has come from a combination of living in America, some lucky genes, and compound interest.”
You can follow the same philosophy, even if you’re late to the game. Open an online savings account, grow your savings, then attack your investments. It’s never too late.
Not Shopping Around
Every little bit adds up, and nothing is worse than buying something, only to discover it 15 50 20 percent cheaper elsewhere. That can add up.
Thanks to the internet you can compare pricing relatively easily. Use browser extensions like Honey by PayPal to find lower prices. That helps stretch your budget and put resources to other needs.
Not Having Goals
Your finances shouldn’t be a set it and forget it approach. Goals are important, and you need to check in on them regularly.
Without goals, you can’t know how you’re doing, and if you will build wealth. Worse yet, you have no idea how to change or improve things.
How to Become Rich Quickly
Everyone wants to become rich quickly. While not always possible, there are legitimate ways to become wealthy. Follow these methods and you’ll be on the road to riches.
21 Awesome Passive Income Ideas
Passive income is an excellent way to build wealth. Thankfully, many ideas only require a little money to start. Pursue these options to grow real wealth.
How to Start Investing With $500 or Less
You don’t need a lot of money to start investing. It’s possible to start with several hundred dollars, or less. Take advantage of time and start growing your money as soon as possible.
11 Jobs That Pay $20 an Hour and Don’t Require a Degree
A college diploma is terrific, but it’s not always necessary to earn a good living. Consult this guide to identify other ways to earn at least $20 an hour without a college degree.
101 Ways to Make Money on the Side
There are countless side hustle ideas you can pursue. Not everyone will be a good fit for you. Here’s an exhaustive list of options to make extra money on the side.