3 Reasons Why People Fail to Become Rich
According to a survey done by the Pew Research Center, it was found that nearly 51% of the U.S. population considers themselves to be in the middle-class group of society. Only 10% of Americans considered themselves to be in the lower class and only 1% thought they were upper-class.
Some people in the middle-class work throughout their entire lifetime and still cannot earn what a millionaire earns in a month. That is a sad reality of life. A recent analysis from the Pew Research Center also found that the wealth gaps between upper-income families and lower- and middle-income families are increasing throughout the years.
Another sad reality is that some people in the middle class keep working throughout their lives and still end up not having enough money left with them when they retire or become too old to work again. Some of them still have a lot of debts left unpaid. If they took better financial decisions during the earlier stages of their careers, they might have ended up in a better financial condition. Here are three reasons why people fail to become rich.
They take excessive loans to buy materialistic things
Sometimes there are instances where even well-to-do families lose their financial stability due to taking excessive loans to buy materialistic things. They take loans to buy a car. They take loans to buy a smartphone. They take loans to buy their house. They take loans to live their life.
Whenever they earn money in the future, a significant portion of it goes into repaying their loans. They spend so much time and energy repaying their loans that they don’t get time to save any of their money. Instead of taking loans to buy assets that could help them earn more, they buy liabilities that make them spend more.
Their expenses are more than their income
Some people take the acronym “YOLO” way too seriously. The acronym YOLO stands for “You only live once”. It basically means that you should enjoy life and experience as many things as possible. Some people took that advice so seriously that they forgot to worry about their future and started buying as many materialistic things as they can so that they enjoy life more.
They have the mentality of enjoying as much in the present and worry about the future later. Due to this mentality, they don’t seem to worry when their expenses exceed their income. They feel like everything will turn out fine in the future even if their present spending habits are bad, but sometimes their predictions about their future turn out to be wrong.
They don’t invest
They don’t invest any of the money they earn because they believe in the traditional method of saving in their bank account. They don’t invest in any financial instruments and expect to grow their wealth just with a single bank account.
They don’t have funds for emergency purposes or any insurance. They rely everything on their single bank account or are simply not interested in investing. They have not realized the importance of investing their money and the impact it has on growing their wealth.
If you are born poor, it’s not your fault. But if you die poor it’s your fault. ~ Bill Gates
There is a saying that if you’re born with two working hands and legs and still become homeless, then you probably deserve your fate. Although it sounds too harsh, the meaning is not that bad. It means that whenever a person is in good health and shape and does not suffer from any disability, he should make the most of it and do something to earn a living instead of going homeless due to his wrong decisions. In the same way, a person can make good financial decisions and end up in a good financial position instead of falling into debt traps and retiring poor. Even if they don’t end up retiring rich, they can at least make an effort to do so.