Money Advice That Will Actually Make You More Poor

Even if money grows on trees, you must know how to harvest it!

If you want to become poor quickly, go around and ask all your colleagues, friends, and relatives for financial advice. People cannot manage their funds and pretend to be financial experts. Here are ten pieces of advice that will make you poor.

Buy A Big House – House Is An Asset

How many times you’ve heard the phrase – ‘a house is an asset.’ You would have fancied a perfect big house that fits all your needs. 

It would have been better if that was the end of the crisis, but you have to pay the principal plus the interest. A big house means more accessories and furniture to fill in the spaces, more utilities, fat insurances, and taxes. A bigger house means a negative return, and it is the top advice you will get to become poor at lightning speed.

Own a house according to your needs and finances. You must reduce expenses as much as possible to build wealth, and buying an enormously lavish home is a bad financial asset.

Never Use A Credit Card

Do you believe in that advice and avoid using a credit card? I, too, felt that credit cards would ditch me someday and never got one made. Later I realized that credit cards are incredible if you use them wisely. It is convenient and helps you earn rewards.

Credit card rewards are helpful to counterbalance the cost of travel. Credit card points come in handy for travel, purchases, and discounts. So, ditch the advice and don’t forsake the credit card; use it wisely.

Your Best Investment Is Your 401k

How easily you believed that 401k is free money, tax benefit, and company match that sounds cool. Here are the hidden agendas that need a closer look.

• You get the money when you are 60 years old.
• 10% penalty plus taxes if you withdraw the money.
• The government can change rules at any time.
• Convert to IRA and pay taxes to IRA dues.

A fat amount in 401k will give you less income than you get while you were working. It is better to get more returns outside as compared to your 401k.

Save Money To Be Rich

This advice would have worked during a recession or in times of uncertainty. Saving alone will make you poor, so focus on how to make your money grow. If your focus is on saving money, you will not find ways to earn more. Saving is good, but counting pennies will make you just some pennyworth.

It’s good to get a new shirt, a cup of coffee, and even buy yourself convenient things. You must understand that poor finances are not because you are not saving enough; you are not earning enough. 

All Debt Is Bad For You

If you use your debit wisely, it will be a great asset at your disposal. Use debit for wealth creation; in simple terms, buy things whose value will increase with time. One good example is real estate. 

Real estate’s value will appreciate with time. Besides, an excellent real estate investment will also fetch you a good rental as a secondary income source. If you have created an asset with debt, the asset itself will look after the EMIs and increase your asset value. 

Invest Maximum Money In Mutual Funds

Mutual fund firms make you believe that investing in mutual funds is a great way to make money. The primary reason is they want to keep your money for a longer duration and make the most of it.

Putting all your money in will never make you rich, but it can doom you if the market crashes. It will take all your life earning and investing in mutual funds only to get your money back when you retire. The sad part is that inflation would have eaten away the value, and you won’t be wealthy anyway.

Buy Cheap Stuff

Cheap stuff will save you a few dollars, but you will be paying much more in the longer run. Buy stuff that is durable and will see you for a longer duration. Cheap things are low in quality, and you will have to buy them again and again as they will wear out quickly. 

Always have a detailed view while you purchase. If you want to buy a cellphone, choose a brand that will be handy for a couple of years. Replacing and repairing a cell phone every six months will cost you much more. Don’t go overboard to buy luxury items, but do a little calculation and inspect the quality before swiping your card.

Don’t Take Risks

If you cannot take a risk, you will always remain poor. There is a difference between making rash decisions and taking well-planned risks. General Powell said that all you need is 40% – 70 % of the data to decide.

If you are looking for absolute certainty to decide, you will never make it or take any concrete decision. Don’t overthink or wait too long; see the opportunity and grab it.

It Would Be Best If You Took Total Control Of Things

If you are doing everything yourself and supervising every activity at work and home, you will feel worn out and wasting a lot of productive hours. Time is money! Evaluate what you have to do and what can be left to others or even hire some convenient workforce for yourself.

Utilize your time to find out more avenues to earn, upgrade your skills or even do some social service and earn some goodwill. 

Imitate Rich And Successful

What works for others may not work for you; all problems do not have a set solution. It is good to find some inspiration from success stories, but imitating will only doom your prospects. Inspect the issue, view the circumstances, and most importantly, ask yourself what you want. These valuable insights will get you success and money.

Conclusion.

It is good to have a job, a house, a car, careful investments. However, the successful secret of becoming wealthy is growing your wealth, enhancing your skills, and knowing ways to raise your money. Don’t waste your time on things that others can do; utilize your time to think of bigger business opportunities.