Someone said to me the other day, “I’m poor because the government takes half of my money and my ex takes the other half.” My response to them wasn’t what they wanted to hear. I couldn’t help it. They were wrong and I explained to this person the real reason as to why they will always be poor.
Poverty is easy to reach. If you want to reach poverty, all you have to do is just sit back, let the world make your decisions, and then complain about it.
What this person didn’t realize (or want to admit) is that his choices are the reason he’s poor and that his mindset is also the reason why he will probably always struggle financially.
Unfortunately, this person’s ignorant mindset is normal. In fact, a lot of people think the same way. Some people arrive at their deathbeds without having ever stopped to educate themselves to think outside of the “norm.”
We are taught to be poor… but you can do better
Do you know where this lethal habit is born? In school.
In school, you learn what the government wants you to learn. That’s just life.
When the government is questioned about why they don’t teach people about money, they typically reply back with the age-old response of, “That’s the parent’s job to teach their kids about finance.”
But how are parents supposed to teach their kids about something that they don’t know themselves?
(WAIT A SECOND… so it IS the government’s fault?)
No.
I was raised in a low/middle-class family. We lived paycheck to paycheck every month. Yet, here I am living debt-free with a net worth higher than the average person twice my age. How is that possible?
It’s possible because I made the conscious decision to educate myself on a topic that everyone else is afraid of. Personal Finance.
It’s not the 1900’s anymore. We have so much information available to us now that it’s shameful to blame others for your ignorance. If you aren’t making the money you want then you need to acknowledge the decisions you’ve made up to this point, educate yourself, and make changes.
(BUT what about all the poor people in undeveloped countries?!?)
If you just asked me that question in your mind, just stop. First, I know there are people out there that will have a harder time getting out of poverty. However, those people that you may have just used as an excuse to avoid facing your own demons aren’t a different story.
This wake-up call is for you; the general population that has internet access to read and learn from what you are reading right now. Leave your excuses at the door as you continue on.
So, what kinds of things are keeping you poor that you need to focus in on? There are a few common things I’ve noticed with people and I’m going to list them all out right now.
14 Things that will always keep you poor
1. Undervaluing time
Rich people know that time is the most valuable asset anyone has. That’s why they fly everywhere instead of driving.
You can’t buy more time, therefore you want to avoid wasting it.
What are you doing with your time? Are you waking up early to start a side hustle or are you staying up late to watch Netflix?
What you choose to do with your time is the single most important factor playing a part in your future.
2. Blaming others
If you say, “If it weren’t for (insert name here) I’d have more money,” then you are using that person as an excuse. Everyone has dues to pay.
Every day you can read about a new celebrity divorce that costs millions. However, that doesn’t stop those people from making more millions.
How can you say that another person keeps you from making more money?
People recover from setbacks all the time. For example, Walt Disney, Dave Ramsey, and Larry King, all filed bankruptcy for some reason but made comebacks as multi-millionaires.
3. Making ‘low monthly payments’
This is a trap. ‘Low, monthly payments’ to the low and middle class are like cheese to a mouse. The mouse is about to be put in a chokehold but it thinks it is about to get lucky.
Buying something because you can afford its monthly payment is instantly making yourself an asset to someone else.
You could easily pay triple the sticker price of an item over time after you pay interest, late fees, refinancing, or and other fees.
Don’t take the bait.
In fact, I was once told that one of the best ways to make money off of someone is by advertising “low, monthly payments.”
“When someone can’t pay, you just charge them MORE money. If they won’t pay at all, you can put them in default, get the asset back, and restart it with someone else for the same ‘low, monthly payments.’
Then, repeat the process for continuous wealth.
Anonymous
Trust me when I say to run far away the next time you’re presented with this “low monthly payments” option.
4. Trying to get-rich-quick
Everyone wants to get rich quick. If someone says they don’t, deep down, they’re lying.
Actually, I take back the “deep down” part. I’ll replace that with “surface-level epidermis,” they’re lying.
(The Epidermis is the first layer of your skin, if you don’t know.)
You know what “get rich quick schemes” I’m talking about, right?
The popups and commercials you see that have people showing off their flashy cars and yelling, “In the next 30 days I can teach you how to make a hundred thousand dollars a month!”
If you find yourself “investing” in these types of people then this is a problem. I’ll bet that the last thing you bought into has not made you rich yet.
Think about it, if these “get-rich-quick” salespeople really made that much money, why would they spend their time hustling on places like YouTube?
The work is too hard!
Look at all the big time rich people like Barbara Corcoran and Mark Cuban. They don’t need to go out searching for people to teach their secret to. People find them. Businesses find them.
People with real wealth will continue to build their wealth by dealing with knowledgeable people, not selling their “get rich quick” ideas to the lower class for a couple bucks. They know that true wealth takes years of hard work.
In addition, this also applies to people who buy lottery tickets and scratch offs. I won’t spend much time on this but it’s important to know that your chances of losing money are far greater than gaining money.
Also, in the even less likely event that you win millions, you’re likely to end up broke again if you haven’t learned how to manage money in the first place. Lastly, lottery tickets are also addictive, which we will discuss next.
5. Having an addiction
I once asked the Financial Independence Community if anyone EVER knew a rich person who smoked cigarettes.
The term “rich” was loosely defined.
Currently, there are about 1200 people in that group. Only 2 people said that they knew someone who they considered “rich” that smoked.
Is that a coincidence? I don’t think so.
The same applies to any addiction whether that be shopping, drinking, gambling, etc. When you have an addiction, that addiction will take priority over the other goals in your life.
6. Bouncing around
A surefire way to make sure you are never rich is by jumping around from one thing to another without finishing what you’ve already started.
This could be from jumping around job to job or even from idea to idea.
I often compare this act to someone building bridges. Imagine if someone wants to get from one island to another. Let’s say “Poor Island” to “Rich Island.” (Refer to my very artistic image above.)
They start to build a bridge, but after they start building, they have another idea to cross – a boat! So they stop building the bridge and build the boat.
Then, they get another idea – a plane. So then they start building a plane.
Now they are in over their head and decide to go back to a bridge idea and start building another bridge.
Meanwhile, if the person would have just focused on one plan, they would have actually got to the other side much sooner. They don’t know, however, that they are self-sabotaging themselves by jumping around so much.
One thing I’ve found that really helps to end this problem is by creating written plans.
Physically holding a game-plan will help keep you on task. You’ll just need to enforce a rule for yourself that you cannot start a new plan until you finish the one you started.
7. Being financially incompetent (and lazy)
This is the #1 thing I see with people who consider themselves poor. They don’t take the time to learn about money and so they will never have the skills to change their life.
Call me cold, but I consider being financially incompetent right next to being lazy.
For example, earlier this year I helped someone set up an IRA through Fidelity. All they had to do was wait 24 hours for their account to be verified and they could start contributing.
Several months passed and I asked this person how their IRA was doing. They replied with, “I never finished it because I didn’t know how to do it and I haven’t seen you in months.”
That is an unacceptable response. I bet you I could search “How to fund an IRA with Fidelity” right now and find a million search results with step-by-step instructions AND a video.
This person refused to spend 5 minutes of their life learning about something as simple as funding an account. Instead, they did nothing, wanted to ride off of my own financial literacy, and tried to use not seeing me as an excuse for their own laziness.
That day, I offered to help him fund the account at that very moment. But guess what?
They didn’t have any money and needed to wait “until their next paycheck.”
Instead of spending 5 minutes learning something, this person did nothing, spent all their money, and are no further along today than they were almost a year ago.
If this person sounds like you, I promise that you will always, ALWAYS be poor.
Learn something new every day.
8. Buying “want” items:
I’m not just talking about a new furniture set or a dreamy boat. I’m talking about random things throughout the year that you just don’t need.
For example, if you struggle to pay your bills but your house is beautifully decorated for every holiday, you need to check yourself. People get so wrapped up in buying knick-knacks that before long, their house is filled with them.
I am dumbfounded when someone with a house full of “collectibles” tells me that they don’t know where their money goes. Well, if they took a look around their house, they could see exactly where their money is going.
Overspending on ‘want’ items and impulse buying is another major player that will probably always keep you poor and work against you when you try to build wealth.
If you have a problem with spending money on too many “want” items, I’d recommend that you read Essentialism by Greg McKeown.
9. Believing people to have your best interest at heart
In a perfect world, we would be able to trust one another. However, we do not live in a perfect world.
Here’s the truth: people are not going to put your needs before their own.
If you find someone who actually does this, you probably call them “Mom” or “Dad.”
We’ve all heard horror stories of people who went into business with their friends or family members only to be left in the dust from decisions someone else made.
This same concept applies to lending people money/items under the assumption of getting it back. If you are in the habit of loaning money to people who don’t pay it back, cut it off now.
The earlier you learn that people will put their own priorities before yours, the better.
10. Relying on your spouse
Your spouse should be your partner in crime. However, since life doesn’t always work out this way, I want to address this now.
I’m going to speak to the women on this one, even though this also can and does apply to men too. Unfortunately, since this is a common thing I see with women, I’m directing this to the ladies:
I cannot tell you how many divorced, single moms I have met that are struggling financially because they trusted that their husbands were managing their finances properly.
Sometimes I feel like some women subconsciously believe that a man can make better financial decisions than they can themselves. Therefore these women don’t educate themselves and they aren’t involved with the financial decisions.
Then, one day, these same women find themselves divorced, taking on thousands of dollars of debt, and end up spending the next decade struggling to raise their kids.
This also applies to women that are currently married. A lot of (but not all) women do not contribute any input at all in how their household money is invested. They just trust that the other person is handling their savings adequately.
Before long, retirement will come knocking and they will discover that they won’t be retiring like their friends who actually invested their money properly throughout their lives.
Man or woman, educate yourself on financial management and contribute to the decisions being made. Don’t just trust someone else to do it for you, even if it’s your spouse.
By simply being aware of your household budget, you can avoid being broke by surprise altogether.
11. Shutting down new or unique ideas
The world is rapidly changing.
Sometimes, the advice you’ve heard for the last 20 years is no longer the best advice. If you’re not open to new ideas, you’ll never grow.
For example, we went from relying on Food Banks to Paying Off Over 200k of Debt in a few years. One method that ended up really helping us out was a new method.
We mentioned this new method to a couple of our friends and family before we tried it and 100% of them told us not to do it because it sounded like a bad idea.
We ended up taking a chance on something new and the result is that we are now 100% debt free and 100% of our friends and family and still in debt.
Poor people almost always shoot down new ideas or anything that has a little risk tied to it. Rich people, however, say “tell me more before I make a decision.”
12. Not taking chances
Speaking of risk, let’s address that.
Poor people can be so afraid of losing money that they become unwilling to ever risk losing it, even for the possibility of increasing their money.
For example, they often talk “the talk” about starting a business, but never actually do it.
I’ve also even had people tell me that they don’t invest in the stock market because they are afraid of losing their money. So what is their alternative? Nothing. They never have an answer.
Additionally, the fear of failing will hold even successful people back. I’ve seen many successful self-employed people throughout my life. However, they are so afraid of losing the success that they have already created, that they don’t take any chances to grow their business.
If they don’t take chances to grow their business, the result is that they stay stagnant, stop growing, and never reach their true wealth potential.
13. Never asking questions
I remember when I was a child and I went out to dinner to meet my mom’s new boyfriend. We rarely went out to a restaurant and if we did, it was an inexpensive one.
On this outing, we went to a sports bar. Her boyfriend ordered a meal, a beer, and an appetizer! To me, that was big balling.
Without knowing proper ‘etiquette,’ I bluntly asked him how much money he made.
My mother was shocked and almost spit her water out. She yelled out my name in such a way that I immediately knew that I had screwed up and I’d better step back in my place.
However, this man replied, “No, that’s okay! You’re just curious. Everyone makes money, right? That’s no secret.”
He went on to tell me his salary, which I didn’t even know anything about, and we went on with eating our dinner and other conversation.
Now, what I asked that day would be considered rude by most poor and middle-class families.
However, take a look at rich families. It’s not often you see a rich person marry a poor person (unless they are extremely good-looking.)
Rich people want to keep their wealth, and naturally, that means involving themselves with other wealthy people.
Also, if you’ve ever had dinner with a wealthy family, you’d know that money is an everyday topic. If they kept money a secret, they couldn’t learn how to make more of it. That’s understandable, right?
That day at the sports bar, my mother was unknowingly engraving poor person ‘values’ into my life – just as her parents unknowingly instilled in her.
What a vicious cycle.
Redefine the cycle
If you are in this cycle and want to redefine it, you probably don’t want to just start asking everyone what their salary is.
Instead, I’d suggest finding a mentor in an area of life you are interested in, then, ask them what information they’d be willing to share with you.
Mentors can change your life and motivate you to reach new levels in your life.
14. Not being self-aware
By definition, self-awareness is knowing your own character, desires, motivations and feelings.
Harvard Business Review conducted a study on people’s self-awareness in the workplace. They found that only 10-12% of the people who thought they had self-awareness wasn’t actually self-aware at all.
They found that the colleagues that weren’t self-aware were stressed, unmotivated, and had a greater chance of leaving their job. In addition, Harvard also suggested ways that self-aware people can stop people who aren’t self-aware from negatively impacting their life!
You know this is serious if Havard is warning their readers to not only avoid this in their own lives but also giving them advice on how to protect themselves from letting those who aren’t self-aware negatively affect their lives.
To find out if you are self-aware, ask yourself these questions:
- Do I have defined values that are important to me?
- What do I want out of life?
- What environment am I most productive in?
- Are my goals clear to me?
- What impact do I have on others?
- Do I pay attention to how others react to me?
- Can I determine where my mistakes happen?
- What do I find rewarding?
If you can’t answer these questions, then it’s imperative that you dedicate some time to learn about yourself and also to decide where you want to go in life.
Takeaway
Many low and middle class people today will always be poor because of three overall actions.
First, they never reach a level of self-awareness that allows them to grow. Second, they settle for the information they are taught by teachers, family, and friends, but never venture outside their “norm” to further educate themselves. Lastly, they never make a life-changing move; either out of laziness and/or fear.
It’s time for a change. A movement to sweep the nation. I believe that change is the FIRE Movement.
It’s time to break free from the actions that keep us poor and join a community of people who aren’t afraid to talk about money.
If you’re new here, allow me to get you started on the right path. Fill out the form below participate in a 7-Day Money Making Challenge. We’ll do it with you and share some awesome tips.
Also, let me know in the comments if you think my findings are on point, if you think I’m off my rocker, and/or if you’ve just had a long, overdue wake-up call.
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