Happy 1st Birthday to Gen Y Wealth. One year ago, I began hitting the publish button. 123 posts later, I’m starting to build a legit blog and business. To celebrate, I have chosen to republish my 5 favorite posts this week. Enjoy!
For generations, certain people have followed this exact formula to get poor quick. There is no other way to get poor quick, faster than these below methods.
- Debt - The quickest way not to build wealth is by getting into debt. Why spend money on yourself, when most of your paycheck can go to interest payments? Most people don’t realize how much that debt is really costing them. For example, say that you have total debt of $10,000 at 10% interest rate and all you can afford to make is the minimum payment of $100 a month. It will take you approximately 213 months and $21,300 to pay off the debt. The worse part is $11,300 of that debt is going towards interest rather then buidling your wealth.
- Don’t Read - The second step to living a life of poverty is by not reading. Why listen to Warren Buffett, who when an entreprenuer asked him what single piece of wisdom would he share with someone he never meant, Warren Buffett responsed with, “Read, read, read.” There are many books, blogs, journals, magazines, etc… devoted to your career. Even if you don’t have any money, you can go to your local library to get them for free.
- Spend More Than You Earn - Why watch your net worth increase month after month, when you could be watching it decrease? It’s not ok to spend more than you earn. It doesn’t matter if you probably will be able to pay off that debt next month or are expecting a pay rasie soon. This habit of spending more than you earn, will get you you poor quick.
- Don’t Track Expenses – All businesss, small or large track income and expenses. So if we think of ourselves as a business owner, why would we forgeo this step with our personal finances? It’s not that diffulcult. You can have a program like Mint do it for you automatically, or my favorite, spend 10 minutes each Sunday reviewing your current statements and entering it into a spreadsheet. It’s hard to cut expenses when you don’t know where your largest expenses even are.
- Don’t Network Inside Your Industry - It’s the same in every economy, the top 10% of earners earn about 90% of the money. You want to get to know these top earners. What are they doing differently then you? What methods did they have for success? Not a single success story might be exactly the same, but there will be certain principles that you will recognize that you can apply in your own life.
- Choose A Job For Security Reasons – If you want to build wealth, choosing a job for security reasons or for a yearly raise that matches inflation willn’t get you there. Instead, look for any job that is in the industry you want to be in the rest of your life. Once you think you know what industry you want to be in, take any job that you can find within that industry. Chances are your first job isn’t going to be the job that will make you a lot of money in the present. Instead, get into an industry you love, read all you can about the industry, network inside that industry, and eventually you will find yourself with a great job, in an industry you love, making as much money as you want to be.
- Spend Your Time Worrying Or Complaining About Things Out Of Your Control – You only have so much energy, time, and money. Your resources needs to be spent as efficiently as possible. If you want to get poor quick, spend hours complaining about the 10% increase in gasoline or how expensive a loaf of bread is.
- Don’t Save Cash – If you work hard in a job that you love, network with the right people, read all there is to read about your industry, then oppurtunties will be abundant. In order to take advantage of those oppurtunties chances are you’re going to need cash. Don’t let lack of cash be your excuse for not taking advantage of a once in a lifetime oppurtunty.
- Never Ask For Help - Most successful people, enjoy talking about themselves and their work. Find yourself a mentor or two that you’re not afraid to ask big questions to. A simple call to a trusted mentor who has already done what you’re trying to do could save you a lot of resources.
- Don’t Worry About Small Expenses - Benjamin Franklin, one of the geratest business owners of all time once said, “A small leak can sink a great ship.” Franklin understood how to build wealth. Vanguard, a mutual fund company who has helped many people build wealth is based upon this concept. If you started investing $5,000 each year in a Roth IRA at 20 years old all the way you’re 60, assuming a 10% rate of return, you would have $3,953,977 at retirement. If your return, net of fees was 9%, your total at retirement would be just $2,856,930.
Other Ways To Get Poor Quick
- Have your monthy bills be more than 50% of your income
- Never take advantage of accounts like 401K’s and IRA’s that offer you tax savings
- Invest all your eggs into one basket