Seven Silent Wealth Killers

The late, great Charlie Munger once said,

The first $100,000 is a b**ch, but you gotta do it. I don’t care what you have to do… find a way to get your hands on $100,000. After that, you can ease off the gas a little bit.”

This has nothing to do with high-yield savings accounts, Roth or no Roth, or beating the market. It’s about the decisions we make week to week, month to month, that could eventually make for a long list of financial regrets. 

These are seven things that could be keeping you from reaching your financial goals.

1. Commitments That You Cannot Keep

Jack Raine put it perfectly when he wrote, “Once you grow accustomed to a high-dollar lifestyle, you can’t afford to step away. Stepping away means falling behind. You get stuck on the treadmill.” 

We are all victims of lifestyle creep at one point or another in our lives. However, accumulating more financial obligations (e.g., a better apartment/bigger home, payment plans on new stuff) because your income went up will keep you from progressively saving. 

2. Not Expecting the Unexpected

“Saving” money in just your checking account will surely lead to overspending. Second only to this is not having a savings account at all. 

Emergency funds aren’t solely for emergencies. They’re also for expenses that you know will come but not when. Not having sufficient emergency savings could lead you to borrow or tap into your investments at unfavorable times. 

However, once you have at least 3-6 months of living expenses in your savings account, don’t stop there — invest the excess! 

3. Unchecked Spending

Piggybacking on number 1, you don’t need that nice of a car yet. Buying a luxury car because your income went up is a surefire way to lose money. I’m not going to stop you, though. Hell, I get the urge all the time too. But just know that whatever you do, you’re making a tradeoff.

Personally, I try not to spend too much money on things I will always enjoy doing. You can always enjoy driving a nice car. If it brings your net worth to $0 or less, it’s not your friend. 

You can’t always go to your best friend’s (first?) wedding. And if you’re extremely lucky, you can’t always go to grandpa’s 90th party. If you know you’re going to drop a bag for whatever it is, know when it’s coming and budget for it. 

4. Not Protecting Your Credit Score

Your credit score is an underrated tool that can have a huge compounding effect on your life, for better or worse.

Here are four areas where a good credit score is vital

    • When you borrow for the big purchases, your first house, car loans, apartment shopping
    • Some employers will actually check your credit history to see if you’re reliable and trustworthy
    • Auto insurance rates
    • If you start a business later in your career, you may need access to additional capital.

You can’t take advantage of high interest rates if you’re battling them, too. 

5. Being Your Own Worst Enemy

The most important relationship you will have is your relationship with yourself. You’re the one person you truly can’t get away from. 

Don’t talk yourself out of taking risks. If you are presented with an opportunity that makes you nervous, you should probably take it. And try to remember, no one thinks about you as much as you. If you try and fail, people will move on as fast as they moved on from SPACs. 

If your best friend told you they were facing the same opportunity, would you give them the same advice you would give yourself? 

6. Not Having a Creative/Expressive Outlet

Have hobbies outside of work and drinking. 

Common said it best when he said the richest man ain’t necessarily the one with the money. The point of life is to stack up life dividends, right? Moments in your life that you can always look back and smile when you realize… damn, I did that.

Become interesting, and people will become interested in you. Then, let the chips fall where they may. 

7. Not Treating Your Money Like A Business

The final and likely the most severe wealth killer is not taking your wealth-building journey seriously. 

For some reason or another, we take so many other things in our lives seriously, but not our money. We say we do, but our bank statement would probably say otherwise. 

If you’re serious about growing your wealth and reaching a certain number in your bank account, then you have to actually give a sh*t. Not just wish you had more money, more time, or look for a simple hack.

If you’re truly serious about this journey, then you have to start treating your money like a business. You should know when money is coming in and where it’s going. And when it’s not being spent on lifestyle wants and needs, it should be meticulously deployed in assets that improve your life today or will pay back in the future. I can’t tell you how many very wealthy people we see do this because they know they have to. Not because they want to. There’s a difference. 

Don’t fault yourself for where you are now. Maybe you weren’t focused on earning more because maybe you were just trying to get your life together. Now that you are, you are completely in control of where you will be from here on out.

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