11 Reasons Why You will Never be a Millionaire
11 Reasons Why You will Never be a Millionaire
Even though $1 million is not nearly as much as it used to be, most people will never be able to claim that they have over $1 million dollars. Why? Well here are a some reasons why most people in the world are losing net wealth instead of gaining it:
#1 You Have a Type B Personality
There are 2 main personality types a person can be. Type A, and Type B. In short Type A personalities are always looking to the future, while Type B’s are living for the day. Type A’s are the ones who save their money, work hard, invest in a college education, and save for retirement, while type B’s are the people who go out and party every night, spend their money on sports cars to impress the ladies and score, while caring less about what tomorow may or may not bring.
#2 You Read Comic Books instead of the Wall Street Journal
You would be surprised how much financial insight you can get from just reading the Wall Street journal for 15 minutes while sitting on the toilet each morning. Instead of reading a comic book, the sports section, or your regular bathroom material, pick up the business section of your newspaper or click your laptop to finance.yahoo.com.
#3 You put Sex Ahead of your Future
For most guys anyway, it’s all about impressing the ladies so you can hopefully have a one night stand with some girl at the club that probably has clamidia. Guys think that they need to have a fancy car, nice crib, and gold chains to have a chance in bed with a girl. Although this could be true, any guy who wants a long term relationship with one of these gold diggers is setting themselves up for debt up to their necks. There are girls out there who don’t just look at material things. It’s just a matter of finding them. As for the ladies, you don’t always have to wear a $500 dress or 5 ct. diamond stud earnings to find a good man.
#4 You are Impatient
Good things come to those who wait. Most people would rather buy the hottest gadgets then put their money away for 10, 20 or even 40 years without touching it. The power of compunding is amazing. If you put $1000 away for 40 years and earn 13% interest a year (long term average of the S & P 500 is 13% a year), you’d have $132,780.
#5 You are Looking for the Easy “Get Rich Quick” Opportunity
Don’t you think that if there really was a way to turn $5 into $5 million dollars in 2 months someone, a heck of a lot smarter then you, like Warren Buffett or Bill Gates would have already instead turned $5 Billion into $5 Zillion? The average return on any investment over the long haul is about 13% a year. Anything that promises more then this is either a scam, or has a huge risk.
#6 You are Lazy
It would surprise you how much money you’d save if you would prepare your own meals instead of going out to eat 3 nights a week and buying lunch are work 5 days a week. The average person would save $7700 a year if they cut out all their restaurant purchases.
#7 You Scare Out of Investments too Fast, and Keep them Too Long
Most people who don’t have money can’t stand taking risk, and once they see an investment explode they have a hard time walking away with their current gains. The average investor will sell their stock within a month if it has dropped 5% or more because they are afraid of losing a substantial stake of their net worth. On a separate note, the average investor will not usually sell a stock that has gone up more than 50% in one year because they are too optimistic and think it will continue it’s torrid pace. Usually what happens is the hot stocks goes back down, and the cold stock will rebound. The rich have the nerves to weather the storm while most everyday investors do not.
#8 You Care Too Much About what your Friends Think of You
A buddy of yours just purchased a new Corvette. What do you do? Go out and buy a Viper. Instead of putting that $75,000 into a 5% CD, earning $3750 per year extra, you blow it on a sports car so your friends and neighbors think you are rolling in dough. If you took out a car loan then you are probably paying about 8% interest a year. Considering you could earn 5% with a CD, thats 13% or $9750 a year you are losing. Too bad you don’t realize that if you hadn’t bought the car you probably would be rolling in dough come 20 years.
#9 You are Completely Ignorant to Your Finances
It’s ok, if you didnt major in finance in college, and don’t know what an annual percentage rate is, but most Americans have no clue what percentage rate they are paying for these thousands of dollars in credit cards they own. Take some time to understand your how much money you are losing each month by not paying off your debt. Understand that once in debt it isn’t easy to get out, and consider going to a financial planner for help.
#10 You Think a credit Card is your friend, rather then enemy
It really bothers me how excited people get when they find out they were approved for another credit card even though they have a credit score lower then Death Valley. If your credit score sucks, then the interest rate you are paying on it will suck as well. If you have a 20% interest rate on a card in which you have $10,000 in debt, you will be paying $2,000 extra a year on that amount. Thats pretty pathetic, don’t you think?
#11 You Don’t Set Goals
Most of the middle class and lower class have no goals. They goto work in order to buy food and hopefully pay $2 off their credit card each month. If you don’t set a goal, you will never reach it. If you don’t even know where you want to be in 20 years, then how can you improve upon your situation?
In conclusion, if you fall into any of these 11 categories it is more than likely you will never have a net worth of $1 million or more in your lifetime. Start by identifying your problems and then set a plan on how you will reach your goals.
