There’s plenty of great advice available on how to control your spending and protect your budget — whether your goal is to get the best business account for your buck, save on car insurance, and the list goes on.
However, sometimes learning about what not to do is just as helpful — and indeed, memorable. With this in mind, here are three sure-fire, can’t miss, utterly proven ways to destroy your wealth:
- Ignore “Little” Expenses
There’s nothing wrong with indulging in a Frappuccino (unless you’re a on a diet — those things are loaded with calories!). However, assuming that these little expenses aren’t combining to put a big dent in your wealth is a massive mistake. Remember, you’re spending after tax dollars here. Allocating $2000 a year to various “little” expenses, means that you have to earn significantly more than this, depending on your income tax bracket.
- Don’t Make a Realistic Budget
Lots of people make a budget. But then again, lots of people make New Year’s Resolutions, too — and they both usually end up in the same place: completely obliterated and forgotten within about two weeks.
Contrary to popular belief, the problem here often isn’t a matter of willpower or desire. It’s that the folks behind these budget and resolutions ignored a fundamental requirement: reality. That is, their goal wasn’t realistic, and so therefore they set themselves up to fail.
And so, if you truly want to erode your wealth and spend most (if not all) of the rest of your life scrambling to make ends meet or purchase the things you want — which could include health and medical care as you get older — then make your budget unrealistic and unachievable. Unethical companies that specialize in helping people pile on even more debt will thank you.
- Keep Up with the Joneses
There’s absolutely nothing wrong with having friends who have more disposable income, or simply have different spending patterns and preferences. The world is a diverse place, and that’s a good thing.
However, one of the biggest ways to turn your happy financial story into a miserable financial saga, is by trying to “Keep Up with the Joneses” by spending beyond your means; not because you want to, but because you feel insecure or inferior than your (so-called) friends. This is a race that can’t and won’t be won, and at the end of the day, the Joneses really don’t care if you keep up with them or not. In fact, they typically even won’t give you a loan to help you get out of your deep financial hole. How’s that for ingratitude?
The Bottom Line
Of course, all of the above is tongue-in-cheek — since your goal is to preserve and grow your wealth, not destroy it. What’s more, the advice here is that you should spend hours a week clipping coupons (or more likely, downloading them to your smartphone), or always settling for second (or third or fourth) best. If you want to sit in the front row, fly first class, or pick up a sweet travel chair from AERO Aviation, then make it happen. Life is short.
Just make sure that it’s part of your plan, and that you’re being rational, reasonable and realistic. You’ll be glad that you did!
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