What’s stopping you from being rich?
If you aren’t ‘rich’ then I guess you probably don’t know right? The first part of this is obviously what rich looks like to you. Contrary to popular belief, the definition of rich is different for every person.
For some it may be a 6 figure salary, a huge mansion and overseas holidays twice a year. For others it may be the flexibility to work part time, or live by the beach. Rich doesn’t necessarily mean rolling in cash, to me it is the flexibility to live the life you actually want to live.
I attended a breakfast a few weeks ago where the key note speaker put something into words that I have thought for a long time, but didn’t truly know how to communicate it.
‘There is logic, and there is emotion, and being a human is where the two meet’.
Let me elaborate for you. In theory, everything is easy and logical. If you want to lose weight, you eat less and exercise more. If you want to have more money, you spend less than you earn. The formula is simple and logical right?
Well one of the advantages and pitfalls of being a human, is that emotions get thrown into the ring. So all of a sudden that amazing and simple logic is not so black and white.
So why am I telling you this? Well unfortunately it may be the emotional side that is stopping you from being ‘rich’. Thinking about clients and different people’s situations, below are some very common ‘emotional’ drivers that are stopping them from accumulating wealth and moving forward.
Living like you are rich before you already are. I get it; you have worked hard, so you probably feel like you deserve all the nice things. The problem is, if you are buying all the nice things on credit then you aren’t actually rich are you, you are just trying to create the perception that you are.
Warren Buffet, who has a net worth of $44billion, still lives in the same home that he bought 54 years ago. The owner of IKEA, Ingvar Kaprad is worth $37billion and still drives the same old 93’ Volvo.
These guys are clearly rolling in it and in some areas of their life, still don’t act ‘rich’. Do you need an $80,000 car, when the $40,000 car will be just and nice and drive you to the same places?
No budget. I am sorry to harp on about this issue, but you don’t know how many times I have heard the following line. ‘I don’t have a budget because it is too restrictive’. Can you hear yourself? You do realise that not having a budget doesn’t mean that you have any more money right?
The thing is budgets are only super restrictive if you make them that way. Sure you are setting yourself guidelines, but assuming you are not guilty of point 1, then it’s just allocating your money to certain areas.
If you don’t have enough money for all the things you need, then I refer you back to point 1 above.
Believing that being rich makes you a snob. This one is on the other side of the equation, but just as common. It seems to be common with some people to think that ‘wealthy’ people think they are better than us, and that they are snobs. It is these people that actually think being ‘rich’ is a bad thing, so it is their own self beliefs that stop them from accumulating wealth.
Years ago I was walking with a friend when a limo drove past and she said the following. ‘Stupid rich people think they are so good’. Really… really? If someone is wealthy, it is likely that they worked hard and smart to get there. You shouldn’t necessarily judge them, just as you yourself would not like to be judged.
All of the above are potential factors emotionally sabotaging your ability to be ‘rich’, whatever that looks like to you. In times like these, you may need to put emotions on the bench for 5 minutes and have a look at the situation in a logical black and white way.
– This post is from our resident senior financial planner, Cara Brett. Check out her details in our about us page.