By Matata Mercy
Recently I finished reading a book called atomic habits that talks about our habits.
Imagecredit: Unsplash.
The author of the book James Clear basically talks about how our habits influence our success or failure in life.
In this book, the author said that building good habits in the long run will make us better humans while bad habits will make our lives hell.
Simple habits that we have can add up bit by bit and result in large outcomes.
For example if a person saved a dollar($1) a day for a month, it means at the end of the month he will have $30.
A very small amount of money with no significant change in the person's net worth.
But what if this person saved this money for a year at the same rate?
How much money would he have at the end of the year?Let me do the maths. He would have $360.
Still some little amount with minimal difference.
What about after 10 years? Well, after 10 years this person will have $3,600. And what about 50years?
After 50 years, he has $18000. A great achievement from mere $1.
That is what is called compound interest.
With the right habit, compound interest works in your favour and things will change for the better.
But with the wrong habit, compound interest works against. Picture this, a person who got lucky winning $1million.
Without any investment, this person immediately spoilt himself with latest smartphones, expensive house and even car.
He buys gifts for his girlfriends and family members at a rate $100,000 per month.
I assure you in the next 10 months this guy to will be left with no money to spend. Broke as a church mouse.
Therefore habits are important. Today I will share with you a few habits that keep people broke.
1.Spending more than you earn.
Truth be told, if you keep spending more money than you earn it is a fact that you will always be broke.
For example, if a person is earning $100,000 per month and this person is spending $200,000 as his living expenses like rent, food, transport, and others.
With this kind of lifestyle, this person can never get ahead financially.
One fundamental solution would be to reduce those expenses but cutting the unnecessary expenses and downsizing.
Then he can save the extra amounts of money so that he can build an emergency fund.
Or better still he can find other side hustles that can help him to earn more money.
2. Lifestyle inflation.
This is another hidden virus that is eating up into people's pockets.
This is where a person upgrades his lifestyle each and everytime he gets a pay raise or earns more money inform of bonuses.
For example, when a person who has been living in a one room house gets a pay raise, all of sudden the room looks too small for him and he decides to shift into a mansion with swimming pool and other stuff all in.
He also upgrades his car from let me say a harrier to Range Rover sport.
All this spending leaves him with nothing to save.
The only way to solve this problem is to stop living lavishly which most people trapped in that lifestyle are not willing to do.
Although earning more would give them more money to manage their lifestyle if they invested it, but this abrupt upgrades will just keep them broke.
Money will never be enough for them.
3. Working less than your worth.
Many employers out there especially the corporations pay their employees less than they deserve to be paid.
These employees who are paid less will keep struggling financially as long as they keep working at this job.
The only solution to this problem is to get a side hustle or side hustles that can help this person make more money so that he or she can be able to pay the bills and also save money for emergency and may be more investment.
Getting stuck in a job where you are paid less than your worth will always keep you broke.
I hope you are now well aware of some of the misfits that keep us broke.
I hope we can change our lives for the better by navigating past these misfits and gaining our financial freedom.
Good luck👋👋🤟🤟
Comments
Post a Comment