They said that building wealth is pretty straightforward. You just have to earn more, save more or invest more. But if growing wealth is that simple, why are many of us still living from paycheck to paycheck? If you notice that in every movie, there will always be that one antagonist who tries to mess everything up. In our world of finance, there are several common enemies that are eating up a chunk of our wealth much faster than we can imagine. These enemies will stop your money from growing even after all the hard work.
Here are the 6 enemies of your wealth that will knock you off from the path of reaching financial success that you should look out for.
I can say that inflation is the silent killer of your hard-earned money. Why? Because inflation does not directly reduce the money in your wallet or bank account but it diminishes your purchasing power. Your favourite chocolate bar will keep getting pricier over time. Your money will also slowly loses its value while sitting quietly in the bank. The problem here is that our income is incapable of keeping up with the rising rate of inflation. That’s why it is advisable if you could diversify your investment portfolio. Save and invest in things that could generate you higher returns. At the same time, balance it with instruments that can yield you with consistent returns even if the rate is lower. You’ll never attain your financial success if your returns couldn’t beat inflation.
Debt is undeniably the biggest enemy to your financial success. The moment you receive your paycheck, a part of your money has gone into the debt hole even before you could get a hold of it. But having debt is not necessarily a bad thing. Credit card debt may be bad but other debts that could turn into an investment and generate long-term income are not. You can save more money and time if you know how to manage debt smartly. There are situations where people borrow in order to build their credit score. Without a good credit score, it is hard to secure a loan with better interest rates from the bank. But be sure to avoid extreme borrowing that will hinder you from achieving your financial goals in the long run. In short, borrow only what you can afford to pay.
What constitutes poor discipline? It’s a mix of procrastination, laziness and poor motivation. Lack of discipline is what holding you back from reaching your financial goals. It is impossible to build wealth when you don’t possess proper discipline. Anyone can advise you to save more or invest more but without good discipline, it wouldn’t last. Many people postpone their savings or delay their credit card payments to focus on other life commitments. Instead, it is better if you get rid of these habits and avoid falling into financial traps. Treat your money well today so that it will treat you well tomorrow.
Have you heard that it is expensive to be poor? Being poor comes with a special cost that people who have more in life are less likely to face. Can you go broke paying for medical bills? Yes! Can life-changing events mess up your financial future? Absolutely! We have no control over these unforeseen circumstances and it becomes harder when we are not well prepared for them. But finances wouldn’t be an issue if you are fully prepared for them. Be it a major illness or sudden job loss, an emergency will not take an immediate financial toll on you and your family. Hence, you need to be fully prepared for the unexpected by establishing an emergency fund and purchasing insurance policy as an approach towards a financially secure future.
The most common enemies among millennials. This enemy leads people to live beyond their means just to impress others who simply don’t care. You will think that it is normal to pay monthly credit card interest since most of your friends do. You will feel that getting the latest handbag is a must. But doing that for the sake of getting accepted by others and to feel accomplished is probably not good. Seeking validation from others will only harm yourself. Your opinion of yourself is the only thing that matters.
Conquering the enemies of wealth that block your path towards financial success is genuinely challenging. But it shouldn’t stop you from securing your financial future. It doesn’t matter which enemy you’re facing now. What matters is you are aware of its existence and you know how to fight them head-on.
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