October 15, 2019
Poverty is real. As of this writing, there are 592 million people globally live in poverty.
But, If you’re reading this right now, you’re relatively rich, at least on a global scale. It means you’re accessing this on the internet using a computer or mobile phone. But that doesn’t mean you’re necessarily living the good life.
There are a couple of things that can make you feel like you’re always struggling to get by:
If you’ve taken the time to calculate your net worth, it can be demoralizing to find that you’re in the red. The same goes for seeing your income burn a hole in your pocket and beyond.
A negative net worth coupled with a negative cash flow can feel like you’re treading water while wearing lead shoes.
But the good news is, you have a choice.
Remember the disclaimer you always find on investment fund brochures?
“Past performance does not guarantee future results.”
It also applies to your finances.
There can be catastrophic events that can affect our finances.
On a global scale, it can be an international event like the 2008 global financial crisis or a natural disaster that can wipe out cities like the 2011 earthquake in Japan.
There are also life-changing events on a smaller scale, such as acquiring a disability or emotional traumas.
But more often than not the bulk of our financial results stem from our relationship with money. It’s more about how we treat money rather than external events happening to us.
This means we can be proactive rather than reactive. We can take things into our own hands and change our results.
Author and Psychologist Nathaniel Branden says, “The first step toward change is awareness. The second step is acceptance.”
So let’s look at 5 reasons why you’re still poor and how you can change that.
If you dress up in the latest fashion, wearing expensive shoes, sporting the latest gadgets, always at the newest spots in town, then you might be buying yourself into poverty.
It’s easy to get caught up in the world of “Swag”, “YOLO”, and “Bling”, especially if you follow Instagram influencers that flaunt their fancy lives.
But if you actually look at the richest people in the world, most of them dress simply.
Jeff Bezos and Bill Gates are the two richest people in the world. They are the first two people ever to have gone beyond $100 Billion in net worth. It’s difficult to imagine that amount of money since that’s probably multiple thousands of times more money than most of us will ever see in our lives.
They both dress really simply. You’ll never see them wearing gold chains or shirts with huge brand names in front of them (unless they’re promoting Amazon or Microsoft.)
Solution: Keep it simple. You don’t have to look rich to be rich. Trying to wear your net worth is a formula for depleting it.
Habits and ideas are contagious. The more you spend time with a group of people the more you learn from each other.
Have you stopped to notice how the people around you use their money? Here are some examples of things to watch out for:
If you see any of these behaviors, then spending a lot of time with that person might not be in your best interest. It’s possible, but difficult to be frugal while surrounded be spenders.
“You’re the average of the five people you spend the most time with” ~ Jim Rohn
Solution: Find good financial influences. These can be people that you know personally or even virtual mentors that you can find in books, podcasts, blogs, and other forms of media. The more you spend time with them, the more your finances will look like theirs.
The grass is always greener on the other side of the hill, but you have to go beyond the fence to get there.
Opportunities are all around us, but it can be uncomfortable to try new things. It can be scary if you’re already struggling to try things you know little about. There’s the fear of failing and being in a worse position than you are now.
But you may be missing out on even more if you don’t even try.
Solution: Fear is only there when there’s risk. Risk can be managed with good education and planning. When you follow the solution in the previous section and find good financial influences, you’re already on your way there. Try new things. Be open to new experiences and challenges.
Habits rule our lives. Sometimes we don’t notice we’re doing something harmful since we just do it out of habit. Like automatically upgrading your phone when the new model comes out even if you don’t need it.
Your total financial result is the sum of all the small habits you have.
Solution: Make saving a habit rather than spending. If it becomes the new normal for you, it will have a massive positive impact on your finances.
The regular advice is to pay your bills then save what’s left. Unfortunately with regular advice comes regular or even bad results.
That plan prioritizes paying everyone else before you pay yourself. No wonder you don’t have any money by the end of the month.
Solution: Automate your savings then invest what you’ve saved. Investing has become a lot simpler and more convenient these days. There are platforms like DiversyFund’s where you can get started for as low as $500 and complete your investment in only a few easy steps.
With a few small choices, you can improve your life drastically. This is, by no means, a complete list of solutions to be in a better financial position. But remember Rome wasn’t built in a day. So build up better finances one small change at a time.