Stop Making These 5 Financial MISTAKES That Keep You Poor Right Now!

𝘼𝙘𝙘𝙤𝙧𝙙𝙞𝙣𝙜 𝙩𝙤 𝙒𝙖𝙧𝙧𝙚𝙣 𝘽𝙪𝙛𝙛𝙚𝙩𝙩, 𝙢𝙖𝙣𝙮 𝘼𝙢𝙚𝙧𝙞𝙘𝙖𝙣𝙨 𝙝𝙖𝙫𝙚 𝙗𝙚𝙚𝙣 𝙚𝙭𝙥𝙚𝙧𝙞𝙚𝙣𝙘𝙞𝙣𝙜 𝘼𝙢𝙚𝙧𝙞𝙘𝙖𝙣 𝙉𝙞𝙜𝙝𝙩𝙢𝙖𝙧𝙚, 𝙞𝙣𝙨𝙩𝙚𝙖𝙙 𝙤𝙛 𝙩𝙝𝙚 𝘼𝙢𝙚𝙧𝙞𝙘𝙖𝙣 𝙙𝙧𝙚𝙖𝙢, 𝙘𝙤𝙣𝙨𝙞𝙙𝙚𝙧. 𝘿𝙞𝙙 𝙮𝙤𝙪 𝙠𝙣𝙤𝙬 𝙩𝙝𝙖𝙩 58 𝙥𝙚𝙧𝙘𝙚𝙣𝙩 𝙤𝙛 𝘼𝙢𝙚𝙧𝙞𝙘𝙖𝙣𝙨 𝙡𝙞𝙫𝙞𝙣𝙜 𝙛𝙧𝙤𝙢 𝙥𝙖𝙮𝙘𝙝𝙚𝙘𝙠 𝙩𝙤 𝙥𝙖𝙮𝙘𝙝𝙚𝙘𝙠, 𝙬𝙝𝙚𝙣𝙚𝙫𝙚𝙧 𝙮𝙤𝙪 𝙜𝙤 𝙨𝙝𝙤𝙥𝙥𝙞𝙣𝙜 𝙖𝙩 𝙩𝙝𝙚 𝙜𝙧𝙤𝙘𝙚𝙧𝙮 60 𝙥𝙚𝙧𝙘𝙚𝙣𝙩 𝙤𝙛 𝙩𝙝𝙚 𝙬𝙝𝙤𝙡𝙚 𝙨𝙝𝙤𝙥 𝙞𝙨 𝙨𝙩𝙧𝙖𝙞𝙣𝙞𝙣𝙜 𝙩𝙤 𝙢𝙖𝙠𝙚 𝙚𝙣𝙙𝙨 𝙢𝙚𝙚𝙩, 𝙗𝙖𝙧𝙚𝙡𝙮 𝙖𝙗𝙡𝙚 𝙩𝙤 𝙗𝙪𝙮 𝙩𝙝𝙚𝙞𝙧 𝙚𝙨𝙨𝙚𝙣𝙩𝙞𝙖𝙡 𝙜𝙧𝙤𝙘𝙚𝙧𝙞𝙚𝙨. 𝙏𝙝𝙚 𝙪𝙣𝙛𝙤𝙧𝙩𝙪𝙣𝙖𝙩𝙚 𝙧𝙚𝙖𝙡𝙞𝙩𝙮 𝙞𝙨 𝙩𝙝𝙖𝙩 𝙞𝙩 𝙝𝙖𝙨 𝙖𝙣 𝙞𝙢𝙥𝙖𝙘𝙩 𝙧𝙚𝙜𝙖𝙧𝙙𝙡𝙚𝙨𝙨 𝙤𝙛 𝙬𝙝𝙚𝙧𝙚 𝙮𝙤𝙪 𝙧𝙚𝙨𝙞𝙙𝙚 𝙩𝙝𝙚 𝙚𝙣𝙩𝙞𝙧𝙚 𝙐𝙣𝙞𝙩𝙚𝙙 𝙎𝙩𝙖𝙩𝙚𝙨.

Being broke has nothing to do with how much you earn. There are cases of people who have accumulated six-figure debts working minimum wage jobs and having a family, but there’s another side to the coin there are people who earn salaries above a hundred thousand dollars and still live paycheck to paycheck. But that’s a choice in fact Warren Buffett is someone who built his wealth with very little. We all need money to survive and that’s why we work in Warren Buffett’s famous words, “if you don’t learn to make money while you sleep you will work until you die”. If you want to stop drowning in debts live the life you desire and help the people around you. You need to address this situation.

The narrative of Warren Buffett’s rise to wealth is astounding. He discovered five critical factors that keep people poor and I share them with you today.

1. Zero Balance

Let’s pretend you have $50 in your bank account. When you feel you have fifty dollars in your account, you usually believe you have fifty dollars to spend. That can be a significant problem, therefore my advise is to not buy it if you can’t afford it. And once you’re in a position to pay for anything, we’ll be pleased to see you borshine to the Nebraska Furniture Mart. As Warren Buffett says here, don’t buy anything you can’t afford just because you have $50. That doesn’t mean you can spend $50; that’s what we call “zero balance thinking.” This type of thinking destroys wealth and explains why income does not determine whether you are poor or rich.

Let me offer you an example to help you understand zero balance thinking. Assume you have a fashion enthusiast who enjoys wearing nice outfits all the time. That year, he received a wonderful stimulus check in the amount of $250. Because the company was doing well, he decided to spend the money on a new pair of pants instead of investing it properly. Yes, he spent the entire stimulus check on a new pair of pants rather than taking advantage of the opportunity to build his money.

If you’re wondering how to avoid this type of thinking, there’s a simple rule to follow known as the five rule. If you can’t afford to buy five of the products you want with cash, you can’t afford to buy them at all. If you only had fifty dollars, you could only buy something that costs 10 dollars. It is critical not to over complicate this.

“I don’t try to jump over seven foot bars, I look around for one foot bars that I can step over,” Warren Buffett says.

2. Payment Traps

Warren Buffett emphasizes this, but if you’re not careful, low pricing can work against you. Many people who look to be wealthy are not, in fact, wealthy. They have highly expensive items, which makes you question how they can afford them when you can’t. Warren Buffett has something to say about folks who appear to be wealthy. Only when the tide goes out do you discover who has been swimming naked; in other words, comprehensive investigation reveals who is truly affluent and who isn’t.

The truth is that they cannot afford it, but they believe they can. For example, suppose someone you know recently purchased a Mercedes. It’s a gorgeous car, and they only have monthly payments of $350 for it, but that’s only because they can afford $350 in monthly installments. Doesn’t imply they can buy it new outright with cash; in other words, they can’t afford it. This creates the idea that you have more money than you actually do because you’re not spending significant quantities for the stuff you own, such as $41,000 for a new Mercedes. One area where you’ll see this a lot is with zero interest offers. At this moment, you can buy nearly anything with no interest and pay in monthly payments.

A PlayStation 5 costs between $350 and $500 on Amazon and can be paid in monthly installments of $50 to $70. These installments may make you believe you can afford more stuff, but you will eventually have to pay the complete amount. Anyway, if you have to pay for not just a car at $350 per month, but also a sofa at $75 per month and many other items in your home, in addition to credit card bills, you’ll be broke for life.

3. Compounding

After conquering the payment traps in the zero balance attitude, you may concentrate on compounding your money. Compounding has a magical effect that causes money to expand at an exponential rate. When we have the opportunity to deploy capital, we have always attempted to create any entity, whether it was the partnership originally or the picture today or blue chip snaps where we owned it or Diversified, kept to be compounding in effect the compounding machines.

If you want your money to increase utilizing this magical effect, you must first comprehend two words that Warren Buffett understands better than anyone else. Assets are things you possess that provide you money, whereas liabilities are items you buy that take money away from you. As a result, assets are things like dividend-paying stocks or real estate. The car you possess, the clothes you buy, or a new phone are all liabilities. Indebted people buy things that make them appear wealthy, yet these items are liabilities. They are not truly affluent; however, if you reverse this and focus on purchasing assets, you may become wealthy; in fact, you can become so wealthy that you can easily purchase liabilities because the assets you own create so much money that you can pay for those liabilities in cash.

With an example, this will be easier to grasp. I met someone who was in a very good financial position and was unsure what to do next. They were considering purchasing a new car that would make them look very cool and that they had always wanted, but they were also very interested in personal finance and how they could make their money grow. They read various books and always found that rich people owned real estate, including Warren Buffett and Charlie Munger. So this person decided to buy a small apartment complex and after a month of preparing the place for rent, they got a tenant and started making $300 per month. This is a perfect example of how an asset generates money and how a liability, while it may appear cool, does not. The best part is that you don’t need a lot of money to start creating compound interest effects.

Real estate is expensive, but you can buy assets like dividend paying stocks for just $5 a day, $5 a week, or even $5 a month. One thing to keep in mind is that assets are not the same as keeping your money in a savings account. A savings account will barely make your money grow with your hard-earned income, and you can’t work hard forever and probably don’t want to.

You deserve the freedom to do whatever you want, and for that you need your money to work for you and grow, which is exactly what assets do. The more money you have in assets, the faster it will grow and the faster you’ll become wealthy. A simple rule to effectively use the compound interest effect is the five to one rule, which means that for every five dollars you spend on liabilities, one dollar should go to assets.

4. Flashy Lifestyle

The unfortunate reality is that social media exaggerates things a lot, showcasing hundreds of individuals who appear rich but are actually not rich; in fact, there have been countless examples of people going into debt to look good on Instagram.

It’s an easy cure, but stay away from the glitzy lifestyle. Look at Warren Buffett; he never wears branded suits, eats cheaply, and lives in the first house he bought. You may follow in his footsteps and find the things that genuinely matter in your life while also accumulating riches.

5. A Step Ahead

While we can make excuses like businesses are bad because everyone wants your money, the truth is that we are all trying to survive and that is how the world works nowadays. The problem is that we all have the choice to buy or not to buy and most people simply lack a filter, so they buy things they don’t need just because they want to.

When you develop a filter and don’t buy things just because you feel like it, you’ll realize how much richer you feel with this extra money. You start investing and as you see your money grow, you want it to grow faster now you start thinking about ways to increase your income and that’s where you as a saver and investor move to the other side and start figuring out how to be a producer like the businesses you buy from this is so you can generate more cash flow.

Now that you understand how the game works, you may work more hours at your job and focus on getting a promotion, or you may start a side gig like freelancing or a small business. Either way, you seek to earn more money so you can buy more assets and increase your wealth as quickly as possible so you can finally do the things that are most important to you.

(𝙒𝙝𝙖𝙩 𝙢𝙖𝙩𝙩𝙚𝙧𝙨 𝙞𝙨 𝙩𝙝𝙚 𝙥𝙡𝙖𝙣𝙣𝙞𝙣𝙜; 𝙖𝙣𝙩𝙞𝙘𝙞𝙥𝙖𝙩𝙞𝙣𝙜 𝙨𝙝𝙤𝙬𝙚𝙧𝙨 𝙙𝙤𝙚𝙨 𝙣𝙤𝙩 𝙘𝙤𝙪𝙣𝙩; 𝙖𝙣𝙙, 𝙖𝙨 𝙒𝙖𝙧𝙧𝙚𝙣 𝘽𝙪𝙛𝙛𝙚𝙩𝙩 𝙨𝙖𝙮𝙨, 𝙘𝙧𝙚𝙖𝙩𝙞𝙣𝙜 𝙖𝙧𝙘𝙨 𝙙𝙤.)