7 Money Mistakes To Avoid That STOP You From Becoming Rich

So I thought it was about time we talked about what separates the people that succeed in hard times and the people that fail. Because let’s face it, failure is not something people like talking about.

I actually built the foundations for most of my wealth during times of recession. So it’s entirely possible to achieve success when financially things don’t look great.

I will even go so far as to say that there are more opportunities because people are making lots of money mistakes. I just made sure I didn’t make these mistakes, so I was able to take advantage of all the opportunities that came my way.

The first money mistake I noticed a lot of people make, and it’s being too scared to take risks. Now as an investor and a businessman, my job is always to minimize risk.

Now risk might sound sexy, but it’s actually not too smart to take too much on. But even when I have done everything in my power to reduce risk, there are still gonna be some in every opportunity as nothing good ever comes easy.

When times are hard, people are much more likely to let that little bit of risk get inside their head and talk them out doing whatever they want to do. I’ve seen countless friends almost quit their job to start a business, but they never make that leap because they don’t wanna risk their comfortable income.

When I’m judging whether or not to make an investment, I compare the potential risk with the opportunity cost of not taking that risk. I’m not always saying I make the right decision, but on average, I’ve come out profitable when I’ve used this tactic.

And I also never want the thought of what could have been eating away at me. So the best way for you to grow your wealth is to take calculated risks with your money and use that time to grow your wealth faster than everyone else.

Now let’s talk about the opposite mistake, which is when people invest in things they really don’t understand. As soon as the stock market starts to go down, suddenly lots more people become interested in investing.

You may think this sounds a little bit illogical, but they want to ride that wave back up to the top and make a ton of money. One of the most dangerous sayings I’ve heard recently is stocks only go up, which will be nice but it’s just not true.

Lots of people feel like if they don’t invest, they’ll lose out on an amazing opportunity. So they start investing in things without fully understanding them.

This has to be one of the most risky things that you could ever do. And it’s probably the biggest investment mistake that I see people making. Like I said before, risk is good, but it’s all about minimizing that risk and doing as much research as possible.

You should never just take advice from one person on the internet as everyone has different opinions even me. A few years back, I nearly invested in this great big group, everything they touched seemed to turn to gold.

I can’t reveal all the details here, but I had investments in fashion, retail, big banks everywhere. I didn’t really understand how they were seeing such amazing returns over time 25% every year.

So I passed on the opportunity as it seemed too good to be true. I had I invested 50K, a year later I would have lost over $300,000 because they were leveraging every investment by six times, which led to this whole operation going bankrupt.

It’s a good lesson to learn though, because I would have previously thought that the amount that I’d invested would have been the maximum that I could have lost.

In these situations, I always think the best tool I’ve got is my gut. So gut feeling is what you want. You can usually tell if something feels right. Most of the time I came back, I always like to top this up with some extra research as well.

The next money mistake is when people buy what’s cheap instead of what’s good quality. “But, I thought you were meant to be frugal and save as much as possible. So you’re able to invest more, isn’t that the idea?”

Let me take you back to when I was a carpenter’s apprentice, we had to buy all our own hand tools, and they are very expensive. However, I found a cheaper place down the market to buy my tools, I thought how great it was. Hammer is a hammer, a chisel is a chisel, what difference could there be? And these were better than half price. I bought a bunch of tools, and I took them to work.

But to my dismay, the hammer shaft bend almost immediately, the chisel didn’t stay sharp for more than a minute, and the screwdrivers, they were only good for opening cans of paint.

So I ended up wasting all that money and still having to go out and buy the quality tools which I should have bought in the first place, and I still use those today.

So if you don’t spend enough money on good quality products then it could actually end up costing you more money. Spending less, of course, is a good idea in some situations, like not spending too much on takeaway food or shopping around for the best groceries.

However, by trying to cut costs on everything then it can actually be a bit of a money trap. I see so many people fall into the mistake of trusting pay day loans. During these times payday loan companies are like predators. They see people are struggling, and they advertise to them non-stop on Facebook, billboards, newspapers.

They are everywhere circling their prey. Although, a lot of people have become aware of these companies. There are still people out there that would consider taking out a payday loan and paying it back later.

This is such a bad thing to do because it has the potential to destroy a credit score which could end people’s dreams of buying a nice car or even a house.

The interest rates on loans like these are sky high. So you end up paying back way more than you actually borrowed. A friend of mine took out one of these loans and because it was payable at the end of the following month, he found he was trapped and he had to borrow every month.

So taking out one loan could lead you down a road of multiple months of debt, which is really, really hard to escape. By tracking your spending, you can avoid ever being in a situation where these predatory companies can take advantage of you.

That’s much easier these days, we’ve many money management apps out there. Like those ones that rounds up your purchases to the nearest dollar and save the difference you.

Now by taking care of your money, you will find it goes a lot further than you ever thought possible. In these times, it’s a huge mistake not having a side hustle.

Although, you shouldn’t be taking your day job for granted, it also shouldn’t be your only way of making money. My earlier jobs years ago, only just paid me enough to keep my head above water.

So I always had a few side hustles. One of them was teaching people to fly radio control helicopters. I developed a skill that not many people could master. So I charged people to pass on that skill. The money I earned was extra to what I needed for my normal expenses. So it became money that I could easily invest.

It’s essential to have another stream of income, and a side hustle is a really, really great way to do that. Now, if you lose your main job, you still have a source of income to pay your bills, and it can prevent you from falling into bad debt.

Even might seem impossible to start a side hustle when things are difficult. But if you look hard enough, there are online businesses that are booming, such as selling digital products and affiliate marketing.

Look at what you’re doing in your normal job. Can you transfer this to a side hustle? It doesn’t matter what you do from an electrician to a forklift driver.

You can find extra work. One of the most important things to get a handle on is your living expenses and not living beyond your means. That’s when people get used to the good times, they start spending more money than they actually earn.

You’ve probably seen them, people buying expensive cars that you know they could never afford. And other people just racking up credit card bills on designer clothes, all to try and impress others.

This isn’t a good idea at the best of times, it’s especially important to live within or even below your means when money’s tight. It’s also a good idea to get rid of all your bad debt, as soon as you can as it’s draining money every single month.

And once out of control, it’ll seem impossible to get back. By creating a budget and cutting out all the unnecessary spending, you’re able to invest more and focus on what really matters, such as spending time with family and friends.

When people are looking to get rich quick, they often find scams instead of the legit businesses. This is something I had to mention as you know, as I’m seeing more and more clever marketers, and they’re selling these online courses that promise big things, lay on a beach earning passive income with little to no effort at all.

Not mentioning that really running a business takes time and hard work. The only people that get enriched are usually the people run in this scam.

Lots of these so-called gurus have never done a proper job in their life, let alone run a decent business. The big mansions they filming, and they’re often not there, they’re just hired for the filming.

And the Lambo, well that’s we just rented for the day. There’s usually nothing wrong with what they’re teaching, Amazon FBA, drop shipping, and affiliate marketing, these are all real businesses that have the potential to make you some money.

But they market towards everyone without any experience or ability to run a business. They sell a dream that anyone can become rich if they follow their simple formula.

But you have to ask yourself if it’s that easy, why aren’t they doing it themselves? These gurus basically package up a legitimate business idea in a way that looks attractive to the everyday person, but fail to mention that their success rate is near to rock bottom.

All businesses need time and hard work, particularly in the early stages. I worked seven days a week, 12 to 14 hours a day every day to establish my business. I knew I needed to do this because I wanted good foundations for my business so that it could bring me profits for many years.

So whenever you see an ad from some guy standing in front of a Lamborghini like that promising you millions in cash in the world on a silver platter, it’s probably a good idea to be a bit skeptical and do your own research.

Where money is tight you’ll be amazed how many people promise to turn your life around? And the reality is the only one who can do that is yourself. The biggest disadvantage to anyone in hard times is not understanding finance.

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