13 Money Mistakes You Must Avoid If You Want To Become Rich

There are 13 Money Mistakes You Must Avoid If You Want To Become Rich. Becoming rich and successful in life is not always a matter of luck. It’s not possible to sleep poor and wake up rich. This is to say that a person does not become rich by magic. In as much as there are principles to achieving an educational certificate, there are also principles to achieving wealth and becoming rich. Most are rich because they understood the principles that govern money. Have you ever asked yourself why you started the same job on the same day with a friend that earns same as you do but he/she after a couple of years is wealthier than you? This is obviously because they are doing something that you are not doing. They’ve understood how money works whereas you haven’t.

The amount you earn every month does not really matter when it comes to growing wealth and reaching financial freedom. You can earn the best monthly salary yet end up poor while another person earning less than you ends up rich. Once you understand the principles governing money, you’ll be able to use even the little that you have at hand to become rich. Failing to understand these principles will keep you in a life of financial struggles despite the fact that you are earning a high monthly salary. Always remember that rich people are not where they are by chance. Suddenly obtaining a huge amount of money is one thing and being able to maintain it is another thing. Suppose a person inherits a huge amount of money, if he/she fails to understand how money works, they’ll end up regaining stability in poverty.

13 Money mistakes you must avoid if you want to become rich

What to keep in mind

Never be discouraged in the financial journey. Do not allow your past failure to determine your future. Avoid dwelling in mistakes and referring to them to reject all opportunities that come your way. Instead learn from your mistakes and move ahead. Keep in mind that you can make it in life and achieve financial freedom. Note that financial success is not determined by how much you earn but by how well you can handle what you earn. Below are 13 money mistakes you must avoid if you want to become rich:

Money Mistake #1

Never spend more than what you earn nor allow your spending to be equal with what you earn. Failing to respect this money principle will lead you into being soaked in debts. And once you are soaked in debt, chances are high that the weight of the debt keeps increasing. You’ll find yourself living a life of creating new debts by borrowing to pay off old debts. Spending more than what you earn allows nothing to save. That means, for ever unforeseen emergency, you’ll get into debts. A life of debts is one of the most horrible lives that you can ever imagine. Debts give birth to bitterness, sadness, anger, stress, and a mind that is never at peace. That’s why serious people who want to become rich strive for a debt free life.

Money Mistake #2

Never borrow money that accrues interest to get into a business venture. In simple terms, avoid borrowing money to start a business hoping that it will make sufficient profit to pay back the borrowed money plus its interest. This mistake is mostly committed by newbies who are trying to make their way into the business world. A mature business man or woman knows the risks that are surrounding startups and won’t afford to borrow money for such. It’s not surprise to hear that about 80% of business startups fail. Better is someone who borrows to expand a business which has proven itself profitable than he who borrows to try. A startup is not different from a trial. It is advisable that you use your own money for startups and observe the evolution of the business before thinking of borrowing.

Money Mistake #3

Never spend money you have received. Avoid promising someone money based on a money promise you’ve received from another person.This will prevent you from getting into trouble or loosing credibility before your loved ones. If you are serious about maintaining a good reputation, then you should also avoid purchasing items based on promised money. Be patient till the money arrives your hands before you think of spending it.

Money Mistake #4

Realistic business ideas are more than money. Whenever you encounter a successful or wealth person in life, avoid asking for money. You should rather ask for ideas on how to grow and maintain money. He/she can decide to give you some money but do not allow money to be your primary objective. The money they’ll give you will soon finish but if they show you how to make the money, chances are high that you’ll always have money and not have to beg or rely on others.

Money Mistake #5

After collecting your wages, never start spending with the hopes of saving what will remain. This is because what usually remains is zero (0). You can be sure that as long as there is money to spend, there will always be things to spend on. The things to spend on will not limit themselves without inciting their “relatives” so that you can spend even more than what you had planned to spend. Each time we find ourselves with no money to spend, we naturally find a way of doing without it. Such can be applied through automated monthly savings. With such, the percentage you’ve assigned for saving is removed before your wages enter you hands. In this way, you won’t have to worry about spending all your money.

Money Mistake #6

Instead of keeping your seed, step out and plant it. Keeping your seed instead of planting it is one of the 13 mistakes you must avoid if you want to become rich. Saving alone is not enough. It’s difficult to enjoy financial freedom by just saving. Saving alone won’t permeate you to enjoy a good lifestyle after your retirement. Savings are just like seeds and it is only after planting them that a person can expect more. Note that inflation can come and make away with the true value of your saved money. In such situations, those who had invested will still be able to cope whereas those who had not will find it difficult. By investment here, we are not necessarily pointing to businesses. There are investment companies that can help maintain and grow your money in many legit ways.

Money Mistake #7

Never lend an amount of money that you are not willing to lose to someone. Only lend what you know in your mind that if the person fails to pay, you won’t “die”. Lend an amount that won’t even hurt your relationship with the person because he/she is unable to pay you back the money they owe. If you realize that the person’s failure to pay back the money will make you hate their entire village, it’s better to advise them to borrow from the bank.

Money Mistake #8

Avoid unnecessary spending especially on things that you can do well without them. Whenever you want to make a purchase, ask yourself what will happen if you don’t purchase it? If you can do well without it, then just move away and save your money for better purposes.

Money Mistake #9

Avoid spending your signature to guarantee someone’s loan when you are not willing to pay it should in case they fail to do so. That is, act as a guarantor for someone’s loan only when you are ready and willing to pay it if they fail to do so on the due date.

Money Mistake #10

Avoid keeping huge sums of money at easy reach when you don’t intend to use it in the short-term. A good example to avoid is that of walking with #300k in your wallet when you intend to use just #20k. Always remember that whenever there is money to spend, things to spend on will come from all angles. When money is at easy reach, chances are high that you’ll quickly and easily spend it without realizing.

ALSO READ Skills For Business Administration

Money Mistake #11

Avoid spending on luxurious items which you can do without. If you are serious about becoming rich, you’ll pay attention to how you spend your money. When you are still struggling to build your financial life, stay away from luxurious items and go for their substitutes at the lowest price. It is not about impressing your friends but securing your financial future.

Money Mistake #12

Avoid paying an amount of money for something that is not the minimum amount that you can get that same value for. Make sure that each item you purchase is coming at the lowest price possible.

Money Mistake #13

Making the mistake of thinking about long term and forgetting short term or thinking about short term and forgetting long term. Learn to put everything in place without making hurts decisions that will hurt your present or future. Carefully analyze every situation and take decisions that will benefit you in the long term. While prioritizing long term decisions, do not forget the present.

13 Money Mistakes You Must Avoid If You Want To Become Rich