For most people, one of their goals in life is to be financially comfortable. What exactly that means turns out to be different for each person. However, what is universally consistent and understood by most is that living paycheck to paycheck to cover expenses is far from comfortable. And, according to a recent Time article, more than 50% of individuals earning the coveted six figures were living paycheck to paycheck. This finding prompts the question: Can one achieve wealth solely through a six-figure income, or does it necessitate an even higher earning capacity?
Riches or Wealth
A rich individual might possess substantial funds and expensive possessions, but they could also carry personal debts and rely on high income rather than assets to maintain their riches. In contrast, truly wealthy individuals sustain their lifestyle in the long term through their assets rather than their riches. However, what specific factors or behaviors might hinder your journey toward becoming wealthy? Let’s explore a few.
Remaining At the Same Job
Undoubtedly, staying in the same job for an extended period fosters a sense of security and familiarity. However, this comfort can sometimes overshadow the potential hindrances to wealth accumulation. Why remain in a comfortable position when there are better-earning prospects elsewhere? When you remain stagnant in a job without opportunities for growth, skill development, or salary increments, financial progression might be limited. While job security is crucial, it is equally essential to periodically assess whether the current role is propelling you toward your financial goals or impeding your ability to create or build wealth. In some cases, considering alternative paths or embracing new opportunities might be the key to unlocking greater financial prosperity.
Purchasing Mind Set
Unavoidable expenses, or what we might consider necessities in life, are not the real issue. is whether you must overspend on these necessities. For instance, paying excessively for a vehicle is hardly justifiable. Are you getting the best rate on your car note? Given that the interest rates on vehicle loans are reaching nearly double digits, should your monthly vehicle payment exceed $500? A more important consideration is the proportion of your income tied up in an asset that depreciates. When evaluating the expenses of necessities, the mindset should be on the potential accumulation of small savings, even if they might appear insignificant at first. My perspective is that you should never purchase a vehicle unless you plan to pay it off early. Avoid committing to the full-term on a depreciating asset.
This one may rub some of you the wrong way, but your holiday spending is holding you back from becoming wealthy. If you are still paying off your credit card purchases from last holiday season, most likely that is something that is hindering your progress towards financial advancement. Stop it! It is crucial to recognize the long-term impact of seasonal indulgence. While the spirit of giving and celebrating is important, unchecked holiday expenditures can create a cycle of financial strain that inhibits the path to wealth. Break the cycle and implement prudent spending practices to safeguard your financial future. Additionally, exercise caution when considering new credit cards, especially those associated with stores and their steep interest rates approaching 30% during the current holiday season. By adopting mindful spending habits, you can pave the way for a more secure and prosperous financial journey.
Another Income Source
The majority of people I know became wealthy because they decided to either start their own side hustle or establish a business. Many people possess skills, gifts, or talents that they can potentially monetize, yet they hesitate to step out and create an additional income stream.
With the current state of the economy, there’s ample room for flexibility and creativity in delivering services, aided by technology. The advent of the Gig economy has opened up new avenues, enabling individuals to reach customers and audiences through platforms such as Zoom and Teams, among others. So, what might be holding you back from initiating the journey to building your own wealth?
THAT’S WHAT’S UP!
Today’s What’s Up is about student loan options. If you are having trouble repaying your student loans after the restart, the Department of Education has a Fresh Start Program. If you make payment arrangements within one year of the payment pause, you can avoid your loans returning to default. And that’s what’s up!
Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2023. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.