15 money truths your successful friends won’t tell you

Financial Planners


Jaco Brand/Getty Images/iStockphoto

Jaco Brand/Getty Images/iStockphoto

Tired of doing the same job that you vowed to quit over and over again? You may be stuck in a rut. And my more successful friends are noticing it. They might envy you for their Saturday morning hikes and big retirement savings, but it could simply be the result of not tackling problems and opportunities like they do.

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See also: How to build a savings from scratch

If you’re wondering what your successful friends think about how they manage their work and money, sit down. Because here’s what they didn’t tell you.

Eva Katalin/Getty Images

Eva Katalin/Getty Images

need to budget

Do you know a friend who is always pestering you for money? Well, that friend thinks you can really benefit from having a budget. Luckily, it takes a little effort to create.

“Whether it’s Mint, You Need A Budget, or just an Excel spreadsheet, find the app or system that works for you,” says Kate Holmes, certified financial planner and founder of Belmore Financial. “Import all your checking account, debit card, and credit card transactions from the past few months to see how things are going. You’ll probably be surprised by some of the category totals.”

Holmes suggests thinking about how much happiness each budget item brings you as a way to keep track of unnecessary spending. Here’s the breakdown she recommends:

  • 50% of take-home pay for food, housing, and necessities

  • 30% of discretionary spending

  • 20% goes towards debt repayment and savings

‘Automatic Millionaire’ author David Buck: These are two of the ‘major escalators to wealth’
Read more: Top 26 Tips to Save You from Suze Oman’s Financial Crisis

Sayang Puankham / Shutterstock.com

Sayang Puankham / Shutterstock.com

not saving enough

Bad news for those dreaming of retirement. Most of us can’t retire in style relying solely on Social Security benefits. By 2023, the average monthly Social Security check for retirees will be just $1,751. So what can you do to prevent golden age stains?

Kevin Gallegos, vice president of the Phoenix business at Freedom Financial Networks and a consumer finance expert, said people should take advantage of their workplace retirement plans and take advantage of employer matching programs. Gallegos recommends that he saves 10% to 15% of his gross salary for retirement. If you can’t change it, start with what’s comfortable for you.

More tips: Mark Cuban says this is the number one thing you should do to build your wealth

Nenetus / Shutterstock.com

Nenetus / Shutterstock.com

too much credit card debt

Financially savvy people think of credit cards as conveniences rather than debit accounts. A GOBankingRates study found that 50% of Americans are in debt with their credit cards. If you have a high monthly balance and a high interest rate, you are paying a premium for the same purchases your debt-free friends would make.

Avoid debt and avoid using credit cards except in an emergency. “There are few, if any, investments that will yield such a large return,” Gallegos said. “Having no credit card debt is a financial cushion in itself.” .

Stock-Asso / Shutterstock.com

Stock-Asso / Shutterstock.com

you don’t invest

Some people may think that they cannot invest because they do not have money. But what if you don’t have the money to invest?

Passive income is the key difference between economic hardship and economic success, and investments like penny stocks and Bitcoin alternatives don’t require a lot of money. As Cardan Capital’s financial adviser told his U.S. News and World Report, “This allows you to generate income or grow your assets even when you’re not sitting in your office. ”

If you don’t like speculation and don’t like entrepreneurship, invest as much as you can in small businesses. Either way, your money will work for you.

Jacob Land/Shutterstock.com

Jacob Land/Shutterstock.com

No consideration of opportunity cost

Every purchase has two costs. The price you pay for a product or service and what you give up when you buy it. The financial community calls the latter the “opportunity cost”. Since I bought the shoes, I can’t afford to make that donation to the IRA.

Billionaire investor Warren Buffett often quotes his partner and self-made billionaire Charles Munger when talking about opportunity cost, calling it the “mistake of omission.” . Unfortunately, they didn’t invest in something when they should, or they couldn’t because their money was tied up elsewhere. As with these shoes, omitting opportunities without considering opportunity costs is a source of error.

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GaudiLab / Shutterstock.com

GaudiLab / Shutterstock.com

don’t ask for financial advice

Self-made millionaires don’t just pile up commas in their bank accounts based on their genius alone. They had the decency to ask their financial his planners and money his managers for help. “The first step in developing a financial plan is to meet with an advisor,” said Steven Batty, a former adviser to Blueshore Financial, and the potential for improvement in everything from cash flow to investments to financial understanding. said there is.

Not familiar with the concept of disintermediation and efficient frontiers? Join the club. That’s exactly why we need a pro on our side.

Sangeli/Getty Images

Sangeli/Getty Images

you still drive a manual

When the coveted paycheck rolls in, it’s tempting to splurge on ventilates and video games rather than drain your savings.

Automate your financial security instead. Talk to your company’s human resources department and request that a portion of every check be credited directly to savings and investments. As bestselling financial author David Buck wrote in The Automatic Millionaire, “The truth is, you’re too busy to think about wealth building all day. It works while you sleep. We need a system, an automated system.”

Courtneyk/Getty Images

Courtneyk/Getty Images

you live beyond your income

According to Business Insider, Warren Buffett still lives in the house he bought for $31,500 in 1958, Mark Zuckerberg has driven an affordable Volkswagen for years, and IKEA founder Ing. Val Kamprad said he used to commute by bus. Their net worth ranges from about $40 billion to $117 billion, so what if money isn’t the reason for these cuts?

Simple thrift. Some of the richest people on the planet recognize that living below income is essential to economic sustainability. For example, consider the famous words of Bill Gates. “I can understand wanting to have millions of dollars. With that comes some freedom, some meaningful freedom. I have to say.” It’s the same hamburger. “

Find out: What income level is considered middle class in your state?

Syda Productions / Shutterstock.com

Syda Productions / Shutterstock.com

you give up too easily

If you weren’t born wealthy, you’ll have to work harder to earn your income and have the strong, down-to-earth attitudes that lead to wealth.

“Look at all the successful people in a wide range of industries and activities,” said John Murray, an award-winning marketing advisor. “Everyone had obstacles, demons and setbacks, but above all their desire to succeed and their ability to overcome. They were willing to do whatever it took to achieve.” .”

Most friends won’t say you’re quitting. That means it’s entirely up to you to make the difficult decisions, and that’s something only winners do.

Rawpixel / Shutterstock.com

Rawpixel / Shutterstock.com

eating out too much

Almost everyone loves to enjoy a Frappuccino in the morning and Chipotle with colleagues in the afternoon. Meanwhile, your brown-bag colleague secretly knows you wasted his $25.

In a big city, buying a Grande Frappuccino five days a week at Starbucks costs about $1,500 a year. But back home, brewing your own cup of coffee costs just 27 cents, saving you over $1,400 a year.

Rethink the Frappuccino?

Jack Frog / Shutterstock.com

Jack Frog / Shutterstock.com

no clear financial goals

For example, let’s say you have a friend who made $1 million before he turned 30 by running marathons and climbing mountains. The first thing she says is that achieving something requires a clear goal and she needs to manage her money properly.

“It’s very difficult to get to a destination without knowing where you want to go,” says Gallegos. “Likewise, it’s very difficult to save without setting goals. Those goals might include retirement, vacation, new furniture, educating children, marathon practice time, and so on.”

Whatever your financial goals are, write them down and create a budget. If you get stuck, call a mountain climbing friend and ask for advice.

READ MORE: Money Expert Jaspreet Singh Says ‘Getting Rich Is Incredibly Easy’ — Here’s Why

Monkey Business Images / Shutterstock.com

Monkey Business Images / Shutterstock.com

need emergency funds

Life has a nasty habit of throwing curveballs in the form of emergency car repairs, unexpected medical bills, and other unwanted surprises. When you suddenly find yourself in financial trouble, your friends will be watching from their life rafts and bemoaning your lack of financial foresight.

Instead of drowning in new debt, listen to Kate Holmes. You want to be able to cover all your expenses for 3-6 months, whether it’s layoffs or worse.

Eviart/Shutterstock.com

Eviart/Shutterstock.com

you are too kind

It’s a tough question (with the possible exception of basic human empathy), but successful people didn’t get to the top by lending money. Elaina Johannessen, Director of LSS Financial Counseling Programs, explains this very clearly, writing: your family. “

Johannessen advises friendly financial institutions to consider the risks and opportunity costs of lending and refer friends in distress to resources such as local county offices and charities whenever possible. ing.

© Apple

© Apple

spending too much money on trends

You know that thrifty friend with an iPhone 8, old navy jeans, and a big TV? He’s shaking his head softly at your iPhone 14, Dolce & Gabbana denim, and a giant smart TV. . Trust your intuition when making impulse purchases. I know when I’m luxuriating.

Another great way to keep costs down, Gallegos said, is to pay with cash. This tip will help you realize how much you’re really spending, and at the same time make spending a lot easier. Gallegos cited research showing that people who pay with cash instead of credit or debit cards typically spend 15 to 20 percent less than he did.

Save even more: Unplug appliances that add to your electricity bill

Tatyana Djemileva / Shutterstock.com

Tatyana Djemileva / Shutterstock.com

I’m procrastinating

After all, patience and planning are two of the most important habits of the rich. Even if you manage your finances consistently, save and invest, your bank account won’t fill up anytime soon. Ultimately, like a turtle that wins a race, slowly and steadily expand your balance over time.

If you didn’t start using compound interest when you were 18, don’t give up. Start saving, investing and planning today. Best-selling author Dave Ramsay, founder of His Solutions and host of a national financial radio show, Ramsay said, “Get rich quick doesn’t work. The crockpot mindset has always been the microwave mindset. We will overcome,” he reminds us.

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This article originally appeared on GOBankingRates.com: 15 Money Truths Your Successful Friends Never Told You



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