Every day, you choose if you will be rich or poor in the future; sometimes knowingly and other times unintentionally. This is the only article on this topic you will ever need to read. By the end of this piece, you will have a clear idea of what’s actually happening, and you will have a game plan that will solve this for you. Here are 15 money habits that keep you poor. Let’s delve in.
- Taking Bad Money Advice from Poor People
You’ve been lied to by many generations who have no idea what they’re talking about. Growing up, you’ve been told that the key to wealth is to get a well-paying job that pays you a good salary. Brutal truth: you won’t get rich working for someone else. Also, stop taking advice from people who are not successful. Talk to people who are where you want to go. Without your choice, you end up surrounded by some people and they become your friends. You are the average of the 5 people you spend most of your time with.
2. Gambling & Lottery:
Luck isn’t a strategy. Nobody will save you. Life is a probability game. The more you understand this, the quicker you’ll stop being poor. Developing strong money habits isn’t about waiting for fortune to smile upon you; it’s about taking active control. Rich people consistently work on improving their money habits and chances of generating wealth, rather than leaving their financial destiny to chance. Poor people leave this probability up to the universe, and with it their future. The moment you’re not writing the future for yourself, that’s when you get whatever is left or whatever crumbs others are willing to throw your way.
3. Spending Money on Things That You WANT but Don’t NEED:
Every time you buy something you don’t need, realize you’ve been marketed to. Someone convinced you to trade your hard-earned money for a feeling. Poor people are quite profitable. Companies and marketing people understand this very clearly. That’s why you see all those broke people trying to flex on the gram. Poor people think rich people wear Gucci because Gucci is paying celebrities to wear the brand so they can sell more to poor people.
4. Not Knowing How Much Money You Spent Last Week, Month, and Year:
Many people just spend money the second it hits their account. Wake yourself up and realize just how much money you’re unnecessarily spending on subscriptions and stuff you don’t need. That money could go towards paying off your debt or plugging your other money holes. Poor people are good at surviving with little to no money, so when they do get paid, they’re quick to spend it to return to their default, out of a fear that somehow it will be taken away from them by life.
5. Spending Money You Don’t Have on Things You Can’t Afford Anyway:
This is the deadliest combination out there. Why are you spending money you don’t have? Debt is modern-day slavery. The moment you borrow money to buy anything, the corporation owns your time until the money is repaid with interest. One of the first steps to improving your money habits is to stop craving things NOW. Instead, only buy it when you can actually afford it. A good rule of thumb is: If you have to ask if you can afford it, you don’t.
6. Trying to Keep Up Appearances:
People will sacrifice their own future just to impress people they don’t like. The more you think about these poor money habits, the more you realize just how foolish that sounds. Why do you feel the need to spend 100k on a wedding when you could invest in a business or travel the world with your loved one? Also, why do you feel the need to upgrade your iPhone every year when the old one works just as well? Why do you need to have a kid just because your friend had hers? We are proud people and don’t want to be perceived as inferior, and that’s exactly how you end up poor in the long term because the things that can save you from these poor money habits and get you out of poverty are in the exact opposite direction.
7. Having Only 1 Source of Income:
This is where we feel some butts clenching up because who can afford to work yet another job? See, for poor people, working a job is the only way they know how to earn money and as we established early on, working a job will never make you rich. On top of that, there will always be a ceiling to the number of jobs one can work and, respectively, the amount of money one can earn. The math is simple: the more streams of income you have, the less likely you are to go broke.
8. Wasting Money and Time (Usually on Entertainment):
When everybody has the same number of hours in a day, the difference in long-term results comes from how many of those hours we use to better ourselves. If you’re in your 30s and broke, it’s because you procrastinated in your 20s. Want to be rich? Every day: Spend more time on creation than you spend on consumption. This creates a value-added surplus in your life. Pay attention to money habits. Understand the fundamentals about money habits, like earning while you sleep, and it’s just a matter of time until the residual income becomes decent.
9. Going YOLO:
Thinking short term vs. long term. Do you remember when YOLO was a thing? Stop sacrificing the future for the present when the present isn’t that good. Screw living rich and dying broke. The entire flex culture and this attitude of living in the moment do nothing but harm the poor part of society. It keeps them poor by selling them the dream.
10. Not learning how to invest & being afraid to change:
If what you are lacking is money, why don’t you spend some time learning how money works? It’s usually because of arrogance. People falsely assume that they understand money because they’ve seen it in other people. Everything you need to know about money is available for FREE. There’s more value offered for free on our blog alone than in the MBA or elite coaching programs we’ve attended. That’s why thousands of people read our articles every day, and so should you. We have an article on the impact of tech on personal finance; read it here.
11. Spending first and then hoping there’s something left to save or invest later:
Our article on Lessons from Steve Jobs delved deeper into this. Poor people do another thing backwards than everyone rich. They get money, spend it, and save/invest whatever is left at the end. As you probably know from experience, there’s never anything left. When the rich get paid, a portion of the money goes directly to investments or savings accounts and then proceeds to go through your month with what’s left. This works because the focus is always on increasing income through those investments.
12. Paying too much in taxes:
It always blows our mind how poor people are happy when they get a tax refund. That’s money you lent to the government with no interest on it. They used your money for free. But that’s not all of it. Poor people get taxed very differently than rich people, and we’ve covered this before. If you’re working a job, the state takes out your taxes straight out of your paycheck, and then you’re left with the money to spend. If you’re a business, you first get to spend how much money you want to spend, and then the state taxes what’s left. We have a phenomenal piece on how to maximize your tax savings with deductible expenses; check that out
13. Unhealthy lifestyle:
Almost every unhealthy habit you have in your life is making you poor. Cigarettes? Yep, making you poor. Alcohol. Same. Eating fast food on the couch, binge-watching anime. Not only do these create financial addiction, taking money directly out of your pocket, but they also serve as a domino effect connected to everything else in your life. If you’re fat, you’re less likely to get a job promotion and more likely to have complicated heart problems, which result in an enormous health-care bill since you live in America and health is for profit. It’s the old idea that if you don’t fix a cavity, you will soon have to pay for an implant.
14. Wanting money to be easy and fast:
For some reason, the idea of a progressive growth in income and wealth does not resonate with poor people. Every single one you ask will tell you about how they want to hit it big. Have a big score and then retire. They grow looking up to the likes of Pablo Escobar, Tony Montana, and Don Corleone. They all think of themselves as mobsters, of people in the underground who have something big cooking. Put the same time and interest into learning how people build companies and do what everyone else did in your area.
15. Staying poor is a choice:
The habit of thinking of yourself as poor, as someone who will never be wealthy, as someone who’s not smart enough, good enough, or educated enough, is what’s actually keeping you poor. People with less than you have managed to escape poverty, yet there you are complaining that things don’t come easier for you. As long as you keep going, keep learning, and improvise along the way, you’ll end up where you want.
We take pride in the quality of our audience and your desire to actively improve your life, so we want you to join the conversation: What poor money habits did you experience or witness that are keeping people poor? Let us know in the comments.
Thank you for reading!
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