Three Warning Signs You Will Never Be Rich
The rich people are lucky and I am not! How many times have you thought like that? We are not talking about Prince George or the royal families. But we are indeed talking about the ways following which you can be rich too! And trust us, it all depends on how you do things.
Keep reading about the warning signs that you will never be rich. We will also tell you where you are lagging and how you can improve it.
Three Most Visible Warning Signs for Canadians
1. You never track your finances
You are a software developer or maybe a real estate agent. On some specific day of the month, there is a beep on your phone showing that your account has been credited.
What happens next? – You start living by the sword and without any planning try to survive the month out.
Do you think there will ever be the scope for some savings? Who wants to build a corpus, I am happy living paycheck to paycheck – Change your mindset!
This is the first warning sign. People who ignore the importance of financial planning will never be able to find out where they stand and what their their current financial statusrom now on start managing your money. Maintain a mental inventory of your financial position by asking yourself the following questions:
- Are you spending your money wisely or consistently engaged in overspending?
- Have you made a corpus to survive the unexpected financial crisis?
- Do you know how to accumulate money by investing it in various financial products?
Ideally, the answers to all the above questions should be positive. If you find some negatives, try to figure out how you can make them positive. It is high time that you moved on from your past mistakes. Focus on the future and start tracking your finances.
Our advice:
- Buy a dedicated diary, preferably with dates printed on each page
- Think of all the possible expenses that you you will month and write them out. Follow the 50/30/20 plan
- See, if there is a scope for some saving. If yes, pick a suitable savings financial product and mark the date on which you are going to invest
- If you can’t save, look for ways through which you can reduce your expenses. For example, substitute expensive products with cheaper alternatives
You might have made some mistakes in the past. Don’t worry, you are not alone. Now what matters is how quickly you can act.
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2. You don’t try reducing your debts
How many loans do you currently have? Indeed, a large chunk of your monthly income goes away in servicing the interest cost.
When you don’t focus on your outstanding liabilities and instead keep adding more debt blindly, it severely hurts your finances. Ultimately, you are going to suffer.
Thus, there is a need to follow the best debt management techniques.
Our advice:
When it comes to reducing your debt obligation, Debt Avalanche and Debt Snowball are the best debt accelerated payment plans. Check them out below:
| Particulars | Debt Avalanche | Debt Snowball |
| Step I: What to do first? | Make minimum payments on all loans | Make minimum payments on all loans |
| Step II: What do with the surplus funds? | Pay off the debt with the highest interest rate | Pay off the smallest loans first |
| Effect | Over time, you will pay lesser interest | The number of loans starts getting reduced |
| Advantage | There are substantial savings in interest cost | You get a psychological advantage. It also builds your motivation |
| How tough to implement? | Relatively tough, as it requires consistency and discipline | Easy to implement, and you even feel happier when you see the count reducing |
Both are good and serve different purposes. Follow the one that you like the most!
3. You don’t know where to invest
The confusion has reached its peak – Thanks to the ever-increasing financial products market. You do not know where they must put their money to generate stable returns.
For instance,
- You see your friends acting on some random “buying recommendations”, and you start following them
- You think debt funds are the safest and try to pick those that offer double-digit returns
- You buy some popular cryptocurrency without even knowing the prevailing trends and ultimately close your position at a loss
Stop doing that! This see-see approach does not work in the real world. It is your hard earned money and you have a responsibility towards it.
Our Advice:
Study the investment market deeply and choose the best financial products that suit your preferences and style.
Find answers to these questions, and you will certainly find a way:
- Are you looking for monthly income? Or Do you want cumulative investment options wherein you get money only at maturity?
- What is your risk tolerance level? – Always remember, the higher the returns, the greater would be the risk.
- How long are you planning to invest? Is it for 1 year, 2 years, or 20 years?
Believe us! It is not about luck. Instead, it all depends upon how serious you are and what decisions you make. We have a large repository of financial blogs. Keep reading and start making better financial choices.
