9 Money Habits Keeping You Poor

What's up, guys? I'm Graham, so since I was a child I've been fascinated by the secrets of what makes someone financially successful. To be honest, I really just wanted to find out why some people were good with

money

and why others were bad with

money

. money and as I started to improve on my own financial journey it quickly became apparent that a lot of people are making some pretty serious mistakes without even realizing it so here are those nine mistakes and also a big thank you to hostinger for sponsoring this video but more about that. then number one we have lifestyle inflation this is what happens when your expenses increase along with your income so as soon as you start earning more you start spending more now most of the time you start innocently enough, as if he received a raise at work.

You can finally upgrade your wardrobe or drive a slightly newer car go out to dinner a bit more often but that comes at a cost. I'll tell you firsthand once you start spending more, all those little extra luxuries quickly become necessities and before you know it. If you need to start making even more money to pay for a more expensive lifestyle that you get used to very quickly now, anecdotally, when it came to me in my 20s, I was very aware of this. I focused a lot on not inflating my lifestyle and made sure that my spending was not dictated or affected in any way by the amount of money I was making at the time.

My mindset was that if I could live like I was broke during my 20s while working as hard as possible, I could do whatever I wanted in my 30s and that largely came true for over a decade. He drove a used Toyota Prius daily. I've never lived in anything more luxurious than an 800 square foot duplex in downtown Los Angeles. I saved every chance I got and now everything I buy is sustained indefinitely by those sacrifices, so I would say that instead of spending more money, do your best to keep your expenses as low as possible and then save the difference number two, without tracking your spending, if there is a difference I have What I noticed between people who have money and those who don't is that one of them is more likely to stick to the budget and I bet You could guess which one it is.

Look, the sad reality is that the average American spends eighteen thousand dollars a year. year, non-essential ID items and 300 a month on random impulse purchases, to be honest that shouldn't happen if you're not yet in the financial position you want and deserve to be completely out of the loop from people who don't properly manage their money You never track your finances and if you are currently struggling with money right now and aren't already doing this you should start doing this right away, consider this almost like the light on your financial check engine when you do this is telling you exactly what you are doing. wrong so you can look deeper, most people just completely ignore the financial check engine light and have no idea how much money they spend or where this is not how rich people manage their money, so if you want make a change, track your income and expenses for the next 60 days down to the penny using a free service like Mint Personal Capital or Rocket Money From there, you'll be able to better determine if you're spending money on things that don't matter if you're making reckless impulse purchases or if you're otherwise, spending money on things that don't really make a difference is so important that if you could keep doing it for two months, I guarantee you'll be surprised at how much money you'll save, number three, by ordering borrow the most you can afford look whenever you apply for a loan, the lender's job is to get you as large a line of credit as possible, they are financially incentivized to spread out your monthly payments as long as possible just so they can stretch your budget a little further , but I will tell you that just because you can qualify for something doesn't mean it's a good deal financially, the truth is that what you qualify for and what you can actually afford are two completely separate equations and when it comes to your lifestyle, you should never spend the most just because you like to just take a look at everyday expenses the average car is now financed for $716 a month the average house is mortgaged for three thousand forty eight dollars a month and the average person has access to thirty thousand dollars on credit on your cards, all of that is just a recipe for disaster.

Instead, I've always taken the approach that you should first make a budget in terms of what you're comfortable spending and then stick to it no matter how much the bank is willing to lend you, for example, as far as I'm concerned, I They were approved to buy a million and a half dollar house, but instead, they spent six hundred thousand dollars on a fixer-upper in a not-so-good part of town more recently. about my current house for 1.4 million dollars when I was approved to buy something up to six million dollars. Many times it is better to spend less, save more and, in the long term, you will not have to pay high monthly payments if something were to happen and sooner.

Without a good understanding of taxes here in the United States, the average single worker pays 30.5 percent of their income in taxes, meaning one-third of their entire work year is spent just earning enough to pay the IRS, which means it's more important now than ever to have at least a basic understanding of how the tax system works so you can use all the resources at your disposal to keep and save more money, most of which unfortunately never happened. They are taught in school, no one ever tells you to do anything about it and Generally, people just accept that taxes are as inevitable as death, which is true, but there are ways to at least make it a little less painful, For example, if you have a typical nine-to-five job, see if your employer offers a 401k plan that can reduce your taxable income by the amount you invest.

We are looking to tax less the crop you are losing. Investments at the end of the year so that can offset up to three thousand dollars from your paycheck or if you have a business it might make sense to run that through an LLC or an S corporation so you can reduce your self-employment tax. There are so many different strategies you could legally use to keep more money in your pocket and a lot of that comes down to your understanding of the tax system or hiring a professional to do the number five ignoring retirement accounts. I guess since we're on the topic of taxes it makes sense that we talk about this here because there is a lot of money to be made just as the law allows you to legally reduce your tax bill, it also offers you financial incentives if you invest and three of They are easy enough to make for almost anyone.

The first is a Roth IRA that allows you to contribute up to sixty five hundred dollars a year. and any earnings you make within that account are completely tax-free at the age of 59 and a half seconds. You can also consider investing within a traditional 401K which allows you to contribute up to twenty-two thousand five hundred dollars a year like me. As I mentioned earlier, this is a retirement account that you can invest money in pre-tax and then you get taxed on the money after age 59 and a half and thirdly you could consider investing within an HSA which stands for savings to health.

This account is essentially used for medical expenses and both contributions, earnings and withdrawals are completely tax-free. Now there are some qualifications for this and a quick Google search will tell you if you're eligible or not, but if you are, you could invest another three. one thousand eight hundred and fifty dollars a year, this means that only between those three options you could invest and house up to thirty-two thousand eight hundred and fifty dollars a year in income without doing anything sophisticated number six, not having more than one source of income this one is so Importantly, the IRS issued a report on high-income tax returns and what they call the distribution of economic well-being, which basically means they want to find out why certain people make so much money and what they found is that the more sources The more income you have, the more money you tend to make.

In fact, when it comes down to it, 65 percent of millionaires have at least three sources of income, so you're doing yourself a disservice if you're not actively working on something. on site to bring. with a little more money, this will also dramatically help you build more wealth as an additional source of income should, in essence, be additional, allowing you to save the difference and invest now to the extent that you could in addition to work part time. I work evenings and weekends, you might consider starting a business now, sure many new businesses end up failing, but with the internet there has never been a more level playing field when it comes to building wealth, now you can run a multi-million dollar business . right from your laptop from home anywhere in the world without purchasing any inventory or hiring employees, even this multi-million dollar YouTube channel is something I do mostly from home with some pretty basic equipment, plus our sponsor It could help you launch a website or online shopping minutes without requiring any technical or design skills.

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Now, next number seven, it's bad to be too stingy. in the wrong places I'm going to be honest here, but there is a difference between being frugal and being stingy and for a long time I was stingy. I always chose the least expensive options. I was trying to save as much money as I could and then I discovered that that wasn't always the best option, for example I took out a cheap account that at first I thought was really good until I found error after error after error and one time those mistakes cost me more than that I should have spent.

By hiring someone good, I changed. I've also made the mistake of buying cheap electronics thinking I was saving money, only to find out that they break and need to be replaced for much more than it would have cost. They just bought the right thing. You know from the beginning that when it comes down to it there is something called boot theory which suggests that a rich person can afford more expensive boots that last a lifetime, while the

poor

person is forced to choose the option that costs less. money. upfront, but it costs more in the long run because they need to be replaced constantly, which I think really applies here in those situations.

Quality matters. If you're going to spend your money, make sure it's Smart Financial move number eight for the long term, without planning for the worst part. Rainy days happen when you least expect it and it's important to plan for a time when things don't go your way, as sad as it is to say that your job probably won't last forever, your car will break down when you get there. The least you expect is that a natural disaster could completely destroy your home or an illness could ruin all your plans. That doesn't mean you should live your life without being bitten by a shark after your car breaks down while you were driving.

I came back from the hospital to treat a rare illness after being fired, but it means you have to have a plan in place in case one or two of them happen at the same time. In this case, save enough. formake sure that if you lose your job you will be fine for the next three to six months make sure you have the right home insurance to make sure you are covered in case of a disaster go and get regular checkups so that if something happens you at least catch it early and spending money on maintaining your cars so they last another 100,000 miles, all of these things can proactively help you in the long run so that that way you are financially prepared for anything that comes your way including Carol Baskin and eventually the Number nine is not having a plan, think about it this way when you go on a road trip, you know your final destination and you have a map showing you exactly how to get there, but when it comes to someone's life or finances, most Most people just wing it and hope they eventually end up where they want to be, unfortunately, while life never works that way and unless you have a plan you probably won't make it, this means figuring out how much money you'll really need to save and what are your priorities?

I think most people would be surprised to learn that they don't need tens of millions of dollars to live the life they think they want and haven't accepted the fact that they don't want to run a multi-billion dollar global empire; Just think carefully about exactly what you want to do for the day and how much it is realistically going to cost you. then work backwards to figure out exactly how you can make it so that, for example, a beachfront home in Florida can cost a million dollars. Home furnishings could cost another fifty thousand dollars. A used Ferrari could cost a hundred and fifty thousand dollars and six thousand dollars a year in maintenance going to restaurants costs another two thousand dollars a month, maybe spending two thousand dollars a month on hobbies and another two thousand dollars a month on various things In total, you could buy that lifestyle for $1.2 million in one-time costs and $1.95 million was invested, although it may seem like a lot of money, it could be achieved by investing $24,000 a year with a return of eight percent over the next 30 years.

Basically, that's just maxing out your 401K. throughout your entire career and voila, now you got that retirement for the rest of your life, so if you haven't done the math yet, add it up because I promise you that you probably won't get there unless you know exactly where the destination is. That being said, guys, thank you so much for watching. I really appreciate it, as always, feel free to add me on Instagram and don't forget you can also get free stock up to a thousand dollars with our sponsor. Puppet.com Below in the description when you make a deposit with a good gram, enjoy thank you very much and until next time.