Exactly what it is that defines a rich person or a poor person is something that differs significantly in accordance with personal opinion. When looking at wealth in comparative terms, somebody with a relatively modest income would of course seem extremely wealthy and affluent to another, who may be struggling to make ends meet at all. Nevertheless, if you fall into the bracket of the tens of millions of people for whom living on the breadline is the everyday norm, you probably do not consider yourself to be even remotely wealthy. If you are living pay-cheque to pay-cheque – as is the case for most these days – you may even consider yourself to be poor.
Whichever way you look at it, actually getting by and keeping on top of things financially these days has never been more difficult. Low income, high costs of living and insisting on living the kinds of lifestyles we probably can’t afford has widened the gap between the rich and poor like never before. And it of course goes without saying that those in the latter bracket would unanimously agree that given the opportunity to step up into the ‘rich’ bracket, it’s an opportunity they certainly wouldn’t pass up.
Realistically however – and at the risk of adding a little doom and gloom into the affair – the vast majority of poor people will always be poor. That’s not a pessimistic statement plucked out of thin air, it’s a fact. As for why…well, it all comes down to a number of different contributing factors and reasons, which both alone and combined with one another make it extremely difficult to make your current financial situation any better.
So with this in mind, what follows is a quick overview of 10 reasons why unless you break the cycle, chances are you will always be poor:
1 – You’ve Ended Up in A Debt Loop
First of all, while it is completely normal and perhaps even inevitable that at least some form of debt will be required to get by, there’s a big difference between borrowing sensibly and finding yourself stuck in a debt spiral. In the case of the latter, it is an incredibly easy mistake to fall foul of – especially if you are currently struggling for cash. You don’t have as much money as you want or need, you find there are a thousand different service providers offering the easy access to cash and so you make use of them. From credit cards to payday loans to hire-purchase and so on, you end up seeing these services as an easy answer to your cash crisis. The only problem being that the more debt you get yourself into, the worse off you will ultimately be.
2 – You Don’t Focus On Bigger Debts
For a multitude of reasons – most of which are financial – it simply makes good sense to focus on getting your bigger debts paid off as quickly as possible. From student loans to mortgages to larger personal loans to extensive credit card balances and so on, these will always be the kinds of debts that not only place a heavy weight on your shoulders, but also cost you the most long-term. If there’s a way of getting your bigger debts paid off quickly, it is in your best interests to do exactly that.
3 – You Think You Have No Control
Another extremely dangerous trap not to fall into is that of reaching the assumption that you have no control over things. The reason being that the moment you accept you have no control, you will accept things for the way they are as opposed to the way they could be. Regardless of the situation you are currently in, it is you and you alone who remains in full control. If you have no idea what to do, seek independent and impartial advice, but always remember that you are indeed in control.
4 – You’ve Never Sought Advice
Speaking of which, if you have never sought advice on your current financial situation and debts, you have absolutely no idea what you could be missing out on in terms of ways and means to make things better. You’d be surprised just what can come from a brief chat with your creditors, if you’re willing to be 100% honest and open to suggestions.
5 – You Use Credit Habitually
The simple fact of the matter is that if you are paying for anything and everything with credit habitually, you are paying considerably more than necessary. After all, it’s not as if the providers behind such services hand them out 100% free of charge – sooner or later, it is you that pays the price. By contrast, if you can get yourself into the habit of paying for everything with your own money, you avoid any charges and fees you have to pay for credit – all of which add up over time.
6 – You Jeopardise The Future For The Sake Of Today
Another extremely detrimental habit is that of accepting the fact that you are poor and thus finding yourself in a position where you do not even think about the future in a financial sense. Instead, you focus on today’s happiness alone, meaning you continually make poor decisions. Unnecessary expense may bring you temporary happiness today, but could also have an extremely negative effect on your future.
7 – You Have No Emergency Fund
A quick point but an important point nonetheless, it is crucial to have at least a small emergency fund to one side, in order to meet unplanned expenses and cope with unforeseen scenarios. The reason being that if you don’t, chances are your only way of riding them out will be to seek further debt.
8 – You Don’t Know The Difference Between A Want And A Need
One of the best ways of immediately and permanently cutting expenses is to begin drawing a line between what you want and what you need. The simple fact of the matter is that each and every purchase that falls into the ‘want’ category represents a purchase that you do not have to make, if it would make more sense to save the money.
9 – You Don’t Assign Budgets
Likewise, if you can get into the habit of assigning specific budgets in accordance with both necessary and unnecessary expenses, you will inherently find yourself spending considerably less. The alternative being to simply continue spending in a haphazard manner, with absolutely no limitations or control whatsoever. Suffice to say, the latter will not help your lot at all.
10 – You Are Trying To Get Rich Quick
Last but not least, while it may not be fundamentally impossible to get rich practically overnight, it’s nonetheless the kind of thing that only ever happens for about one in every ten million people. For the rest, getting rich represents a lengthy and intensive process that takes a lot of hard work, dedication, talent, knowledge, business savvy and so on. Which is why if you are sacrificing your financial health by chasing unrealistic goals, chances are you could benefit significantly from a reality check.
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