5 Reasons Why Most Don't Become Wealthy

5 Reasons Why Most Don't Become Wealthy

1.  Never occurs to them that it is possible to become wealthy
2.  Never decides to become wealthy
3.  Procrastination
4.  Inability to Delay Gratification
5.  Lack of Time Perspective


Are you unknowingly holding yourself back from financial independence?

"Whatever you have, spend less." If compound interest isn't working for you, it's working against you.

By keeping what he has, and adding to it by living below his means, the Master Investor lets his money compound indefinitely.  And compound interest plus time is the foundation of every great fortune.  

Wealth is really a state of mind.  In the words of Charlie Munger:  "I had a considerable passion to get rich.  Not because I wanted Ferraris  -- I wanted the independence.  I desperately wanted it."  If you share this attitude, once you have gained that hard-fought independence the last thing you're going to do is jeopardize it by blowing all your money.

The alternative to living below your means is the debt-laden pattern of the middle class:  If compound interest isn't working for you, it's working against you, bleeding your money away just as a spurting artery drains your life-energy.




Additional notes:

Most people want to be rich so they can fly first class, live it up in the Ritz, feast on champagne and caviar, and go shopping at Tiffany's without giving a second though to their credit card bill.

The problem is that people who have this attitude to money don't wait until they're rich before they start indulging their fantasies, even if only on a small scale.  As a result they never accumulate any capital, or even worse go into debt so they can live beyond their means ... and remain poor or middle class.

Reviewing the Financial Basics of Investment

• Long hours of back-breaking work do not guarantee financial independence.

• You need to work smarter with your money.  Let your money work for you.

• This can be achieved by clever investing and the magic of compounding.  This is the only way in which you can really beat your ultimate enemy, inflation, over the longer term.

A few sobering statistics. Only 6 out of 100 people achieve financial independence

It is estimated that out of every 100 people aged 25 today, in 40 years' time:

• only 6 will be financially independent
• 34 people will have passed away
• 10 will be drawing a government pension,
• 20 will still be working, and,
• 30 will be dependent on relatives.

How many people of 60 and older do you know who are dependent on their family or still have to work?  Scary, isn't it?

Many people do not realise that, despite their strong work ethic, their hard work alone is not enough to help them on their way to accumulating wealth and becoming financially independent.

To gain financial independence, your money must work for you.  You need to be smart about money, and you need to know your money's enemies and friends.

The story of Rockefeller

As a teenager, John D. Rockefeller, one of the richest men in America in the 19th century, earned $1 hoeing potatoes for a neighbour for 30 hours.  A week later, he collected interest of $3.50 on a loan he had made to another farmer a year earlier.  Rockefeller learned early on that you do not necessarily need to work harder, but that you do need to work smart.

If you share Rockefeller's determination and want to end up being one of the 6 out of 100 people without financial worries when you retire, you should learn to invest early.