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9 Harmful Money Beliefs You Should Avoid To Get Richer

9 Harmful Money Beliefs You Should Avoid To Get Richer

Whether we know it or not, sometimes we hold onto beliefs that can actually inhibit our ability to make money. I’ve been guilty of some of the thought patterns explored below, and once I learned to face and negate them, greater income sources opened up to me.

See if you, too, harbor any of these bad money beliefs.

1. “Only certain people get rich.”

Maybe you grew up in a family that experienced a serious lack of funds and deep down believe it’ll always be that way, as if you somehow inherited “poorness” like a disease. Well, I’m here to tell you that it’s faulty to think that only people such as Oprah or Bill Gates were intended to be blessed with large sums of money. Even Ms. Winfrey was poor once, and if richness can happen to her, it can happen to just about anyone. Why not create a $1 million business this weekend?

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2. “There are no jobs out there.”

Buying into doom and gloom job reports give some people an excuse to give up their search for employment. As author James Altucher notes, however, millionaires learn to look for hidden opportunities and make their own entrepreneurial moves. Get inspired by this guy who left Google to sell brain pills.

3. “Giving income away will make me lose cash.”

It seems logical that if you have $500 and give away $100 to help a family in need, you’d only have $400 left over. Conversely, if you choose to keep that $500 and skip helping the people whose light may have pricked your heart, common math would tell you that you’d still have $500 for yourself. But life doesn’t work in logical ways; it works mysteriously and circuitously, whereby you may find that opening the door to being charitable comes back to you in fabulous ways.

4. “It’s a zero-sum game – to win, somebody has to lose.”

Simply because one person gains $1 million doesn’t mean that another person has lost out. Instead of viewing money as a big pie whereby those with larger slices are cheating those with slivers, Bill Gates once spoke of a concept called “the creation of wealth,” whereby companies like Microsoft generated funding that wouldn’t have been there otherwise. I view it almost as money being printed out of thin air instead of funds being stolen via some “the rich get richer and poor get poorer” idea.

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5. “Impoverished people are holier, less selfish, etc.”

Yes, we’ve had great examples of folks who’ve walked this Earth that intentionally lived in poverty and focused more on non-material attributes. But that doesn’t mean doing so makes us saints. You can be just as effective by having money and using it in altruistic ways to help others, instead of taking a vow of poverty if your life isn’t meant to duplicate that direction.

6. “Wealthy people are jerks.”

Some rich people are full of themselves. Some rich people are kind and caring. Certain disadvantaged members of the public are lovely, whilst others are cruel. Money in and of itself is merely a tool. Having a lot of it only magnifies a person’s true character. Great wealth doesn’t create character.

7. “I’ll hit the lottery one day.”

Out of all the major lessons I remember from the popular book titled The Millionaire Next Door, the one that sticks out is that millionaires don’t always look like the flashy Rolls Royce driving folks we see in the movies. That’s because some of them plod away at doing all the non-glamorous things it can take to get rich: driving older cars, living beneath our means, etc.

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As long as we’re solely waiting for some sweet Powerball-winning day to make us rich, it kind of takes the onus off of getting there the hard way. Like one stockbroker told me, “Continue on with your get-rich-quick plan, and in the meantime, save money as well.”

8. “I’d better lower my prices/salary in order to gain sales/clients.”

If you’re trying to get rich through your business, there could be times when you’re tempted to cut your hourly rate or the prices of your products or services in order to make ends meet. This could be a great business move – after all, the marketing term “loss leader” wasn’t invented for nothing.

However, if you’re constantly undercutting your own value just because you’re afraid of losing clients or due to fears that what you bring to the table is not good enough to compete with others, it could be more symptomatic of deeper issues.

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A graphic artist who provides high-quality image editing might decide that her level of expertise and skills are worth $50 per hour. If clients looking for a cheap deal try to talk her down to $10 per  hour and she accepts, the artist may discover that she’s effectively lowered her annual salary below the poverty level. Instead of kowtowing to cheap clients out of anxiety, it would be better to politely decline and move on to others that are more than willing to pay higher rates for quality work.

9. “My business has to be shady to make money.”

The talk of the Internet recently was about a New York-area hotel that had the gall to charge people $500 for any negative reviews posted about them on sites like Yelp. Setting aside the fact that the practice might actually be illegal, most readers agreed that instead of threatening guests with fines for negative reviews, the hotel should actually do their best to provide positive customer experiences and gain great reviews naturally.

Amazon is king when it comes to “the customer is always right” theory. They even allow consumers to return Kindle books within seven days if they don’t like them – one of the many ways the online retailing giant has won the trust of goo-gobs of people that love to fork over their credit and debit card numbers to “The Everything Store,” as goes their motto.

Businesses and leaders who adopt the same thought-process – that is, harboring quality customer relationship management training, honesty and good ethics – are the ones that stand a greater chance of making their owners and employees rich. Those firms and folks that believe they must adhere to shady, confusing practices that rely on trickery to make a lot of money are the ones that will burn out like a shooting star streaking across the night sky.

Featured photo credit: Dollars in Wallet via static2.bigstockphoto.com

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Published on September 17, 2018

How Being Smart With Your Money Leads to Financial Success

How Being Smart With Your Money Leads to Financial Success

Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

1. Avoid being “penny wise but pound foolish”

It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

2. When you want something big, wait

Impulsivity can get you in trouble in most aspects of life. Finances are no different.

It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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So, you get the itch.

You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

Here’s where you have to take a step back.

Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

The impulse faded. And you just saved yourself a ton of money.

3. Live smaller than you can afford

You finally get that big raise. And you want to celebrate – and why not?

You’ve been looking forward to this forever. And after all, it was all due to your hard work.

That’s fine, splurge a little. However, make it a one-time deal and be done.

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Don’t get caught in the trap that just because you’re now making more money, you should spend more.

Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

4. Practice smart grocery shopping

Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

Create a grocery budget

Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

Make a list… and never deviate

Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

These impulse decisions will lead to overspending, which will derail your grocery budget.

Eat before going grocery shopping

It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

This makes it much easier to stick to your grocery plan.

5. Cancel your gym membership

Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

The average gym membership costs around $60 per month. That’s $720 a year.

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Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

It’s baby steps… And baby steps can start now!

I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

Featured photo credit: Unsplash via unsplash.com

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