Mind Over Money

The gulf between those who understand the art of making and managing money and those who do not is so deep that it accounts for much of the woe we see around us. For some people, success is measured in terms of a very large paycheque, while for others, a financial disaster leaves them scraping to get by.

1. Unfavorable financial beliefs and attitudes

Your relationship with money impacts your finances. The Problem. Many of us have buried financial beliefs we adopted from our parents or what we learned through society:

"It's hard to make money."

"It's unfair to be rich."

''I'm not so fortunate to be that wealthy.''

"Money is bad."

This is how thinking based on these beliefs impacts your money decisions and behaviours and prevents you from having the mindset for making money. It is highly crucial that you adopt financial beliefs and thoughts that are positive instead of these limiting beliefs and thoughts.

2. Lack of financial literacy

A lot of us live without even basic financial literacy. Financial intelligence is not something they teach you in school, money management, investing, financial planning, etc ''Get Paid To Follow Your Passion Or Train?'' This ignorance can result in:

Inability to plan a budget

NOT knowing how to borrow and use money

Lack of knowledge on the investment setup

Ignorance of the laws of taxation

It is possible to enhance financial literacy by actions such as reading books, attending classes and consulting with financial planners.

3. Lack of saving habits

The absence of a saving habit. Another big reason that poverty is still prevalent is the prevalence of a culture of saving. Most people live on their income without saving part of it. Some will decrease your kind of mentality, ''I'll save when I get money.'' but the way to save money is:

Paying yourself first when you receive your income (PYF Method)

Setting aside 10-20% of your income per month

Maintaining an emergency fund

By putting these savings on autopilot

Saving behavior: Saving is important to your financial well-being.

4. Bad debt

The poor aren't able to lift themselves out of poverty due to bad debt. Not all debt is the same. As much as good debt, such as mortgages, can be a stepping stone to wealth, bad consumer debt, credit card debt especially, can imprison you in a debt cycle:

Upfront high-interest credit card debt

Consumer debt taken out for non-essentials

Debt can be expensive, especially if it's for depreciating assets like car loans.

Borrowed without repaying

You can achieve greater financial strength by borrowing as little money as you can and only when you must and by paying off debt as soon as possible.

5. Not investing

The principal way to go from zilch to riches is investing. But many people:

Investing ignorance

Believing that investing is dangerous

Pass-on-invest Having the ''invest later4''-attitude

Believing that you're not able to invest because you don't have a lot of money

But of course, successful investing is something most everyone can do. But you can create wealth by starting small, investing regularly, and sticking to the principles, like diversification, that have been shown to succeed.

6. Lack of Critical Thinking

Critical thinking is something that most people have trouble doing when it comes to their money. This is why they:

Spending on unnecessary things

Be swayed by social media and advertising

Overspend based on what others perceive them

Made financial decisions based on feelings

If you can improve your critical thinking, there's a greater chance that you will make more successful financial decisions and cut down on wasteful spending.

7. No extra income sources

Most people who are living beneath their means often struggle to become wealthy. Wealthy people often:

Cultivate several income streams

Generate passive income

Create business opportunities

Monetize their skills and expertise

Seeking and investing your time and energy with other sources of income is a major step to take to get out of poverty.

8. Impact on friends and network

The people around you play a significant role in your financial behavior. Hanging out with friends and family members who have bad financial habits can encourage you to form the same bad habits:

You spend when you roll with spenders.

Poor people will give you bad advice

Consumerism can hit you as well

You are underestimating your financial aspirations

Hanging around financially successful people, being mentored by financially successful people, and studying the way rich people think will compound your situation.