6 financial mistakes

6 financial mistakes

Income inequality. One percent of the population. The gap between rich and poor. t Unless you have lived in recent years in deep woods or just avoid network news like the plague, you probably are familiar with these terms. As well as combining their idea that a mere mortal to achieve real wealth is almost impossible.

In fact, you will not necessarily be based on the popularity of a doomed technology company, have a name like Buffett or build a career worthy of a mention in the book by Michael Lewis. (Although not prevent such achievements.)

Then what is needed? True to ways of thinking, as well as the inherent habits skillful handling of finances.

Dzheymi Tardi, business coach and author of the book «The Eventual Millionaire» ( «Potential Millionaire"), surveyed more than 150 millionaires about how they amassed their wealth. And that's what she found:

"The main difference between the rich and everyone else is that they are in control of their money and do not allow money to control them. They dedicated a specific time to learn how to successfully work with the money, and, as a result, they run their ship. On the other hand, if we approach to finances from a position of fear or ignorance, you will find yourself in a boat drifting in the middle of the ocean without a motor. "
This attitude can lead you to serious and costly mistakes if you do not learn to adopt key financial habits of the rich.

Here is a list of gross mistakes made by many people, and the rich try to avoid them at all costs.

1. Failure to recognize the facts

If you are not very interested in the numbers, mental isolation from their own finances may seem tempting idea, whether it is the rejection of close monitoring of its investments, or simply ignoring the statements of the bank. But to do this, you should not - and the owners of a round sum in the accounts certainly do not make a fortune, turning a blind eye on the balance sheets.

Dzheymi Tardi wrote:

"If you do not have the facts about their own financial situation, the money will go you through your fingers like sand."

The consequences? You can get bogged down in debt, make unwise investments or left with nothing when they retire.

The solution for getting rich

According to Tardy:

"Some people think that to understand the essence of money is necessary to be an investment banker, but the rich are not born with some sort of secret knowledge, this is a process of gradual training. If you avoid the awareness of money matters, because you are afraid of unpleasant discoveries, you need to immerse your head in the case. Even if what you see, you do not like the truth will allow you to make the right decisions and move forward. "

If you are starting from scratch, the first step is to gather basic information from your bank account. For example, calculate your income and expenses so that you can get an idea of ​​the results for each month, and evaluate your financial situation improves or deteriorates. After gathering all the facts you can begin to inform decisions about what to do to increase the capital.

On the other hand, if you know nothing about where to invest money, replenish store of knowledge by listening to podcasts, attending a seminar or seeking the services of a financial advisor.

Tardy advises:

"Just do not forget to make sure that it is a reliable source. Learn from people who have already achieved that to which you aspire. "

2. Excessive spending

When you think about the way of life that can afford the rich, perhaps you fancy luxury painting itself: for example, the château at the ski resort in Chamonix or a closet full of shoes by Manolo. But rich people are more discreet than you could imagine.

Tardy says:

"Millionaires do not buy everything Lamborghini, they make purchase decisions based on your current financial situation and your goals. They are rich because they well keep the money rather than spend it great. "

The solution for getting rich

You have lost luster in the eyes when you are constantly being told about the importance of correct budgeting? This can be understood. still face difficulties when trying to reduce their costs, many people in spite of all his diligence in planning budgets.

Unfortunately, there is no short cut, which would allow to circumvent this important principle in financial terms, but Tardy offers a solution that allows you to make it less unbearable.

"Make budgeting a game put in front of a new interesting challenge every week. See how you can reduce costs for the products, or even give up the purchase of food for a week and try to invent interesting dishes that have accumulated in your refrigerator. "

The key here is to choose a system (or a trap for a brain), which you can stick to - and then its application.

3. Failure to change financial behavior after a significant event in the life of

When you get married, or a close relative dies, the last thing to be busy your brain - the balance of your bank account. But if you put off making your spouse in a will, the closure of a joint account after the divorce or the choice of a suitable pension savings plan, your financial situation will suffer.

Pete Bush, a financial planner in Horizon Wealth Management Company of Baton Rouge, Louisiana, writes:

"Successful people understand that every difficult situation in life, you are going through, and has financial implications - and they will prepare a plan of action in such cases."

The solution for getting rich

Every time when your life makes a turn in a new direction, take the time to sit down, check your finances and adjust them accordingly.

Look at it this way, as suggested by Bush:

"Imagine that this is football: in the beginning of the match the coach have a game plan, but suddenly his key players injured in the first minute, and can not continue. Initial plans lose their meaning, and it is necessary to develop a new strategy. "

Savvy money people realize that even if you are in the midst of a significant event, for example, are trying to establish a routine of sleep his 6-month-old baby, it is still important to keep track of your finances - and open a savings account, which will help you put together a large money for the child's tuition fees in 18 years.

Bush says:

"Life situations consist of many components, logistics, emotional, spiritual, family and, yes, financial, consider the financial component together and on an equal basis with others. It might not be the most urgent, but at least if you immediately recognize its presence, you can make a plan for its debugging. "

4. Loss of money on commissions

It is one thing - to spend 5,000 rubles for a great dinner at your favorite restaurant. Here at least you give yourself the pleasure! But it is quite another thing - to put the same money away by paying a fee for overspending or late payments.

David Bach, vice-chairman of Edelman Financial Services (EF) and author of "Smart women are getting rich," says:

"The difference between the rich and the rest lies in the fact that the rich shall ensure that where leave their money and keep their wealth, not allowing even the slightest part of it go to waste. For the rich are rarely seen, so that they later paid their bills, receipts piled pigeonholed or use a credit card with a high percentage, because they hate to lose money. "

The solution for getting rich

Automation, automation and again. We are only human and, in the end, we can ever miss a payment deadline or fail to notice receipt. So take precautions to reduce the likelihood of these inevitable errors.

Simple advice from Bach:

"Set up automatic payment function on the main items of expenditure: for a mortgage, car loan by, for insurance, for credit cards. After all, the commission for the delay may eventually accumulate on a fortune. "

Naturally, this does not give you the opportunity to forget about these charges forever.

Bach adds:

"The rich always check their balance statements for errors: they know that if you find errors in their accounts, they can call to the appropriate service and how it can be corrected soon."

5. Concentration on more savings rather than increasing revenue

If you decide that you should cut back on their spending, and the first thought would be to abandon the daily trip to the coffee shop or disconnect all electronic equipment from the mains when not in use - stop.

Millionaires do not throw money away, but they are also aware of the importance of getting the additional income for the speedy achievement of their financial goals.

Tardy states:

"The rich understand that there is a limit to save, while the limit for earning no."

In other words, although a reduction of a few thousand a month costs slightly improve your position, getting extra thousand due to salary increases will be much more effective.

The solution for getting rich

If you feel a lack of money, spend your time more wisely, having found opportunities to make extra money. The obvious starting point of the search is the analysis of the current salary. If you are a long time did not ask for a pay rise and know that benefits your company, go to your boss with a proposal to increase earnings.

Or spend an hour of your time that you would spend in search of the store with the cheapest dish detergent to think carefully about ways to generate additional income.

Bush says:

"The key here is to understand what your skills can be useful to others and how to use these skills to make money, whether it is a third-party company, using familiar in the implementation of its projects, or any other way to share your skills on someone's money" .

6. Increased attention to the price at the expense of utility assessment

Sometimes our desire to save in the end brings us: we buy inexpensive shoes for 500 rubles instead of having to take shoes for 2000 which will hold on longer. Or continue to repair the car gluttonous 1992 release instead of having to go to a new model.

But the rich in this better understanding. Bush said:

"The rich understand that the cheapest option is not always the most profitable, they evaluate options for the long term and watch as the amount to be paid today will pay off for a long time."

The solution for getting rich

Part of the solution is to change the way of thinking to "find the lowest price" to "find the very best deal." Then carry out the calculations.

Bush advises:

"Take the" cheap "and" profitable "options for the product you are - the mortgage, auto loan, etc. -.. And count the costs for corresponding to this purchase period, compare the options on both sides, considering your regular income, and see which they would be most appropriate in your situation. "

So, take for example the automobile salon that offers a low rate credit, if loan repayment period is three years, and compare it with a higher rate during the five-year loan. If you plan to use this car 7-10 years, what will be the total cost of ownership for this period of time? The longer you pay the loan, the lower your monthly payments, but over time the total amount increases. It's not as hard as you pay for the short term, but in the long run will increase the costs.

Also remember that the bright impressions are more valuable than material goods.

As Tardy says:

"Once you have accumulated an excess of things, you quickly realize that nothing else you do not need. Millionaires understand that getting impressions that change you as a person - whether traveling or skydiving - will bring you more benefits than simply buying iPhone 6, when the iPhone 5 continues to work well. "

So start to pay attention to what you are doing in the happiest and brightest moments of his life, and use their finances for the multiplication of such moments.