10 Lies That Are Keeping You From Building Wealth
Sometimes people avoid facing harsh realities by telling themselves little lies to make the situation appear better that it really is, and most of the time, these lies have to do with financial matters. Take a read through these, and I'm sure you'll find at least one where you'll admit to being guilty. This is list inspired by an article from Business Insider, and hopefully you realize the truth and take corrective action...before the lie grows out of control. Enjoy!
LIE #1: 'It's okay because I will be a millionaire by the time I'm 30'
Truth: If it were that easy, don't you think everyone would be a millionaire by now? Only a handful of people in every million people have the drive to ensure that this happens; for everyone else, there's your basic 9-to-5 job with a salary nowhere near the millions. Focus your time becoming a millionaire by the time you retire; not only is it far more realistic, in this day and age it's becoming necessary. Start small, and build wealth over time.
LIE #2: 'I will start saving once I am making $X salary.'
Truth: What if you never make it to that salary? You will never start saving. And odds are you'll end up worse off than you are now. It doesn't have to be daunting, just save what you can today and that will pay off big-time in the future.
LIE #3: 'I'm not the Entrepreneurial Type'
Truth: So what? You're already a business owner, and that business is YOU. Everyone can benefit from a passion or a side job to help them build wealth over time, it just takes some exploration of what you like. Adding more work is hard, yes, but you cannot be laid off or fired from "You, Inc." and having an extra income stream is incredibly rewarding. Sell items on Etsy, Ebay or Amazon, be a driver for Uber or Lyft, monetize a skill (coaching, consulting, public speaking, etc.) -- there are plenty of ideas out there.
LIE #4: 'Money is the root of all evil"
Truth: No, evil is the root of all evil. Money is just a tool or rather an energy used to accomplish many different things. It's only what you DO with that money that shows character. Some people want to get rich in order to help the poor, some people want to get rich to help themselves -- money does different things for different people. It helps to really understand WHY you feel the need to get rich or just have more money. Ask yourself why you are seeking wealth, and you'll find a way there. If you just want wealth for fame, sex, friends, and lots of expensive things, frankly you ought to re-evaluate your life. LIE #5: 'Credit Cards are evil, too.'
Truth: See the answer above. Credit cards are only 'evil' in the hands of the wrong person, and to that I ask you to evaluate your own character. Credit cards are the best way to establish a credit history which will ultimately open many doors for large and important purchases over your life. Without credit you can't buy a house, car, or any other major purchase requiring financing.
LIE #6: 'I'm waiting to invest until the market gets better.'
Truth: Oh yeah? When exactly is that, smart guy? First of all, if you've read this blog long enough you know that that's the worst time to get in the market when things are "the best," and secondly, the sooner you take the leap, the sooner you can ride the wave higher.
LIE #7: 'Life and disability insurance are for old, sick people.'
Truth: You don't need insurance until you need insurance. If you live a crazy active lifestyle, you're far more likely to end up with a disability and if you die, your family will be stuck paying all of your debts. Why not get insurance now when you're young and healthy and when your premiums are the lowest? There are plenty of plans out there that will even allow you to turn life insurance policies into annuities. Check them out!
LIE #8: 'I can stop paying my student loans because they'll eventually be forgiven."
Truth: It is near impossible for student loans to ever be forgiven. Forgiveness for these loans is usually only offered to those who do volunteer work, work in government or public sector jobs, join the military for a fixed amount of time or who work in specific fields of medicine. Otherwise the forgiveness factor is a dream. And these are only for PUBLIC loans; PRIVATE loans are generally never forgiven no matter which industry you find yourself working. To stop paying student loans can be devastating for your financial future: it can ruin your credit score, your creditworthiness, and you can even be sued by your lender to make you pay the unpaid balance and fees.
LIE #9: 'I can't afford to put money in my 401(k)'
Truth: You can't afford to NOT put money into your 401(k). I've talked a lot about them on GradMoney since the site's inception, but when you tell yourself this lie, it REALLY hurts you. You're missing out on potential tax benefits, generous employer matching contributions (FREE MONEY, PEOPLE!) and thousands of dollars of missed income. Those who do not have a 401(k) should check to see if they are eligible to contribute -- usually you have to be over the age of 21 and have worked a minimum of 1,000 hours in order to participate, but every company is different.
LIE #10: 'I'll pay off my debts when I start making more money.'
Truth: If you keep this mindset, you may start to feel like you're NEVER making enough money no matter how many years go by. Many people rack up debt in their 20s and 30s thinking that by the time they get to their 40s and 50s they'll be making tons of money and those debts will get paid. Do you plan to have kids? Families don't get cheaper over time. Do you plan to buy a house? That's a huge investment that may never truly end. What if you get injured or sick when you're older? Good financial planning starts by asking yourself tough questions...don't lie to yourself. If you keep coming up with excuses to save, then you never will. TRUTH.