Money Habits That keeps you Poor.

I have spent the last decade of my life immersing  myself in the field of finance and money. Through a  

degree in finance ,a qualification in accounting  and then a career in Investment.

 Banking and one  

of the most life-changing skills I have learned , through it all is how to handle my own finances . 

Recognize my bad money habits and break free from  them so in this video I'm going to share with you,  

nine of the most common bad money habits that  hold people back and tips on how to break out  

of them.

 Number one paying yourself last I first  heard of this in the book Rich Dad Poor Dad by  

Robert Kiyosaki and it's one of the blueprints in  achieving Financial Freedom Robert explains that ,

the way people pay their bills can be broken down  into two types the first way is the Poor People's  

habit and that is through paying yourself, last  so as soon as your paycheck comes in you then  ,

pay your rent your phone bill your subscriptions  you find your social plans and then you'll save.

Whatever's left over if there is even any money  left to save the second method he talks about is ,

the rich people's habit and they do the complete  opposite they pay themselves first and that is  

what you want to do take 10 minimum and put that  into your savings account the minute you get paid  

treat it like paying a bill this is so important  and by doing this you're guaranteeing that 

is when you take that 10 and put it away your mind  will think of ways and structure your spending and  

structure your finances to last for the whole  month and you won't even realize that you're  

buying their things before you pay yourself the  second bad money habit is getting comfortable  

with bad debt it seems that debt these days is  actually the norm people are using debt to by  

the smallest of things to buy presents to buy  clothes I have a straight wall that is unless  

I can afford to pay for that thing outright and  cash I shouldn't be buying it with.

 

Any form of 

debt remember credit card companies want you to  be bad with your finances because that's how they  

make money from this the average credit card  interest rate is 22 which cancels all kind of  

benefits and rewards these credit card companies  are providing if you're not able to pay them off  

interest debt as soon as possible number three  is not having a stockpile this ties into Point  

number one which is about paying yourself first  and essentially it's saving enough so that you,  

this six months of buffer it's through that paying  yourself first start putting that 10 away and once  

you have your stockpile then you can start using  the additional money you save to building into  

your investment fund and looking at Investments  number four is not knowing your income or expenses  

properly until you know what your starting point  is how do you know where you want to be there's  

something called lifestyle inflation and that is  your spending will rise as your income.

 Rises the  

more money you make the more you spend and it's  a cycle make more money buy a bigger house buy a  

financially they know their assets they know their  liabilities they have a clear goal on where they  

want to go financially and all this all the steps  they need to take to get there are more likely to , 

get a lot of money and build wealth compared  to people who just fantasize about money but  

have no idea how to go about it how they plan to  acquire it or how to manage it just being mindful  

of their stuff and seeing those numbers in black  and white will trigger you into action fifth bad , 

money habit is having expensive Hobbies a lot of  people like to shop and I guess yeah part of this  

the psychology or fear of missing out really well  where constantly bombarded them marketing messages  

about where we should be in our lives what we  should own and then we receive messages on what  

we should wear and where we should be going  on holiday avoid those situations or rein in  

skills or experiences or education people can't  take that away from you these are developing you  

as a human and these extra skill sets that you  can then use later on to get a higher pay and  

add more value and generate wealth in the long  term next up we have focusing purely on saving.

  

If you want to improve your financial position you  can firstly save more of your existing income or  

you can make more money and create more income  streams and the ideal combination is a mixture  

of both you can't build wealth if you're making  more money and spending all but you also can't if  

you're just focusing on the saving side because  there is a cap to how much you can save using  

those cashback sites will only get you so far so  to truly build wealth you have to think of both  

sides of the equation both how you will save a  larger percentage of your income but also how  

you will make more money saving money side has a  cap the making money side does not it's infinite  

there is unlimited potential upside whether it's  investing in the stock market asking for a pay,  

rise starting a side hustle you want to break the  bad money habit of thinking about saving money  

is going to massively increase your wealth number  seven paying too much in taxes taxes are going to  

be the single biggest expense in your life whilst  everyone has to pay tax a lot of people just  

wealthy they have knowledge of illegal corporate  structures that come with tax advantages they hire  

tax advisors that help them minimize their tax  bills so if you want to get one step ahead one of  

the best ways to increase your wealth is through  understanding tax rules in a way that's stack up  

in your favor for example investing through  an Isa or a Roth IRA which is an investment  

account that shelters your dividend and profit  from taxes or operating under a business instead  

of an individual if you're a solar printer the  tax savings are incredible if you are a company  

holder and I'll go into these in another video  but all of this stuff is absolutely legal and  

if you are someone who disagrees with this and  prefers to pay more taxes regardless of whether  

or not you can reduce it legally then it doesn't  hurt to understand the tax rules and reduce that  

tax bill so that you can instead use the money  to give back to things that directly align with  

your values instead of letting someone else decide  where that money should be going if you want me to  

make a video on tax I was planning to I already  have a summary on what I want to include but I  

have been a bit skeptical about whether to release  this it's a topic that can go either way so let  

me know in the comments below if you want to see  that number eight waiting too long to invest when  

you start having savings you have that stockpile  that buffer that we spoke about then you want to  

start looking at investing that money so that  your money starts working for you and you want  

to diversify those Investments so you can weather  different situations operations that come around  

in life but you want to avoid leaving that money  in a bank account because inflation is a thing  

and it means that you're essentially losing money  every year so I have a mixture of safe Investments  

of riskier Investments that I'm willing to lose  as well start looking at different investment  

strategies once you've saved up enough don't leave  any additional money more than you need to in a  

bank account.

 I have another video and what you  can be doing with your money in times like the  

current recession and I'll link that here for you  as well there's always going to be reasons why  

you can't invest because you don't have time you  don't have enough money you don't know where to  

start but the longer you put off investing the  harder you will have to work to get that same  

level of Financial Freedom as someone who starts  investing earlier and the ninth bad money habit is  

not caring about finances if you don't care about  something you're not going to do your best at it  

and most people don't care about finances and even  worse than that is people who think that finances  

Master this and immerse yourself in this world  where you can learn to use your finances in a way  

that gives you freedom and the Independence that  you want it may just be finding the right person  

or the right tools that help you resonate with  your finances in a way that most appeals to you  

whether that's through an employee perspective an  entrepreneur perspective someone who is a less of  

a risk taker someone who is more of a risk taker  but there will be someone who kind of matches  

your investing style more closely thank you so  much for watching if you like this video you  

may also enjoy another one that I've linked here  on Building Wealth and making money work for you.

https://youtu.be/Q0uXGQu55GM