Naval Ravikant once said: "The most dangerous thing is not making enough money, it's spending the money you have on the wrong things." Here are 8 money habits keeping you poor:
1. Not Investing Saving money is essential, but the goal isn't solely to have a big pile of cash. It's to make that cash work for you. Invest in: • Skills • Habits • Yourself • Businesses Building assets is how you increase your net worth.
2. Impulse Buying Purchases made on emotions don't have any logical backing. To counter impulse buying: - Set a limit on frivolous spending - Wait at least 24 hours before making a big purchase - Make a list of what you need before going shopping
3. Lifestyle Inflation As your income increases, it's easy to fall into the trap of lifestyle inflation. Combat lifestyle inflation with the following: - Have an investment plan in place - Create a budget and stick to it - Ignore advertising and consumerism
4. Debt Debt is a form of slavery. It means you have to keep working to pay off your previous decisions. Reduce your debt by: • Creating a budget • Cutting unnecessary expenses • Increasing revenue • Paying more than the minimum required
5. Not Knowing Your Numbers You can't improve what you don't measure. Know your: • Net worth • Income • Expenses • Debts • Savings rate Track your money flow and adjust accordingly.