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It's never too late to adopt better money habits and begin your path to wealth and, more importantly, financial freedom. Here are 8 things that may be holding you back.
Are you in your late 30s–or worse, 40s–on a shoestring budget? If so, you may be doing something wrong. Here are some reasons you may not be able to build your wealth and attain financial security.

Related: Money Moves to Make in Your 30s

Also Read: Money Moves to Make in Your 40s

1. You Don’t Have an Entrepreneur Mindset

The sad reality is that you may never become rich by working for another person or company. You’re unlikely to become wealthy if you live from one paycheck to the next.

The capitalist nature of our modern society means that only those who hold the reins become wealthy. Workers who labor away at a company never get rich.

Charles Tips, the CEO of TranZact, remembers his father saying you are never going to become rich making a living. This is what inspired him to create his own company. Working in a company is a zero-sum game that won’t make your rich.

The financial security that most associate with a 9-5 job is nothing more than a misguided fantasy. You won’t get ahead in your financial life if you sell your time by the hour. Even if you are a top honor graduate from a prestigious university, you won’t get rich by working eight hours a day for another.

If you want to get rich, you need to have a spirit of entrepreneurship and risk-taking. This is important if you’re going to live a life of luxury. Not taking a risk and investing in a new business or venture may be one of the key reasons you are not wealthy.

2. You’re Deep in Debt

Another reason you may not have amassed wealth at this stage in your life is that you may be trapped in a debt hole.

Americans are trapped in a record $13.5 trillion debt. If you are also included in this group, you will have difficulty getting rich.

Taking on too much debt makes it difficult to build wealth.

When you borrow money, you make a promise to pay back the amount borrowed and more. The higher the interest rate on debt, the faster your income will drain.

Staying out of debt has become challenging. You only have to swipe a card or enter numbers in a website, and your debt piles up.

Overburdening yourself with debt will do you no good. While there is nothing wrong with borrowing for major expenses like a car or a house, try to keep borrowing to a minimum.

Related: How to Buy Your First Home

Every time you take on new debt, you dig yourself deeper into a debt hole. You must avoid splurging on things you don’t need. Ideally, you must stay within your means and spend only what you earn. Relying too much on the debt will prevent you from getting rich.

3.  Deep Down, You Believe Money is No Good

One reason that may be preventing you from increasing your wealth is the thinking that money is the root of all evil. Many people have this notion about money without even realizing it.

As we grow up, we are led to believe that the quest for money leads to misery in society and that wanting more is greed. This mindset may be the reason you are not actively working to gain more wealth.

The fact is that money itself is neither good nor bad. You need to remember there is nothing wrong with the desire to become affluent. While attaining more wealth won’t necessarily lead to increased happiness, it will undoubtedly make life more comfortable, pleasant, and enjoyable.

The modern amenities of life we take for granted would not have been made possible without the ambition to be rich. The quest to become rich is not a sin; it’s a virtue that leads to beautiful destinations. By becoming rich, you not only make your life pleasant but are also able to help others.

You need to change the mindset about attaining wealth if you want to become rich and enjoy all the things that money can buy.

4. You Avoid Making a Financial Commitment

Another reason you may not be wealthy is failing to commit to long-term financial security. You cannot change your circumstances unless you decide to build your wealth.

If you continue to do what you have been doing, you won’t become rich. You need to make a clear decision and commitment to becoming rich if you want to succeed. You should not have a mindset you will invest in building your wealth someday.

Whatever you need to do to build your wealth, do it today.

Procrastinating to build wealth will turn out to be the biggest mistake you make in life. You should not wait for the right month or year to invest. The market will never be perfect to start a business or invest in security. You need to take a risk if you want to get ahead in life.

Related: How to Start Investing: A Complete Guide for Beginners

Take, for instance, the example of a former corporate attorney Floyd Bostwick Odlum who amassed great wealth during the great depression of the 1930s. Odlum bought failing companies at low prices and then sold or consolidated their assets for cash. The strategy was so successful that he became one of the ten wealthiest men of that time. Had he waited for better times to invest, he would never have become wealthy.

5. You’re Squandering Money on Luxuries

One of the biggest wealth-killers is extravagance. If you spend money on things you can’t afford and don’t need, you must kick the habit. This is important if you want to see your bank account grow by leaps and bounds.

Take the example of the Oracle of Omaha, Warren Buffet. Despite amassing billions of dollars, Buffet lives in the same house he bought in 1958 for $31,000. His company Berkshire Hathaway occupies only one floor in the building.

The world’s greatest wealth maker changed the perception that having ten houses is the definition of a successful individual.

Indulging in extravagant expenses may offer temporary pleasure. But, generally, it brings financial pain later down the line. You become entrapped in the bad habit that will eventually bring financial ruin to you.

You need to break from this dirty habit and limit your spending. Take things slowly and avoid instant gratification. When you try to buy everything right now, it will deplete all your savings.

Try to adopt a frugal approach like the billionaire Warren Buffet. Think twice before buying expensive items.

Ask yourself:

  • Do I really need to buy an expensive item?
  • Can I live without an expensive item?
  • Are there alternatives that offer better value for money?

Considering your purchase decisions will lead to a more sensible financial decision.

The money saved by not buying something you don’t need can be invested in profitable avenues to build your wealth.

6. You Don’t Protect Your Savings Against Inflation

Inflation is like a slow disease that gradually destroys your wealth. With rising inflation, the value of your savings decreases. If you keep your savings in the bank, your wealth will decline due to the falling purchasing power of money.

Inflation erodes the value of investment and savings. The higher petrol prices, food costs, and airfare all drive up inflation. Higher inflation will reduce the value of your assets. It decreases the purchasing power of your financial paper based assets.

Let’s consider an example of how interest rate decreases your savings. Suppose that you have $1 million saved in an account, and the average inflation rate during a year is 3%. In this situation, your savings will be worth:

1,000,000 + (1,000,000*-3%) = $970,000

This means that your real wealth has decreased by $30,000 during the year, not accounting for any earnings. The longer you keep the savings in a bank account, the more the value your savings will decrease. That’s why it’s important that you invest to hedge against inflation.

One option is to invest a part of your wealth in precious metals such as gold and platinum. This can potentially protect your assets against the adverse effects of inflation.

Another option is to buy index-linked equities to protect your investment against inflation. But you should note that investing in equities involves a higher risk of loss. So, avoid putting too much money in the investment option.

Last, real estate investment trusts (REITs) are considered a good hedge against inflation.

Historically REITs have outperformed direct real estate investment during the bull season. REITs have provided annual returns of 11.8% in the past two decades. In comparison, the average returns from real estate and S&P were 10.6% and 9.5%, respectively. The returns are more than the inflation rate meaning you can recoup the loss of wealth value due to inflation by investing in the security.

7. You Don’t Have a Financial Plan

Many people drift through life with no planning. This is the most critical reason for the disaster.

Benjamin Franklin had once famously stated that failing to plan is planning to fail. And this is true, particularly with financial matters.

Without a financial plan, you will spend a lot more than you should. You won’t know what you have and how much you can afford to spend during a month. Becoming rich will become an unattainable fantasy for you.

If you want to succeed financially, you need to budget down to each penny. Record every minor and significant expense you make. This will help you know how you can prioritize expensive items to get the most benefit out of wealth.

Related: 10 Online Budget Tools

A financial plan can serve as a blueprint for financial success. The plan will help you organize your financial resources, so you plan better for the future–et goals for essential things like a home, car, retirement, and emergencies.

Related: A 7-Step Guide to Building Your Ultimate Emergency Fund

To make an effective financial plan, think about where you want to be in the next five to ten years. Then set small goals on how you can achieve those long term goals.

8. You Don’t Allocate Your Income Using Good Judgement

Lastly, the reason you are not wealthy today is you may not be allocating your income wisely. If you spend most of your income on wants–entertainment, dining out, and expensive clothing — you cannot build your wealth.

Experts recommend allocating your wealth to needs, wants, and savings. There is no hard and fast rule, but former Harvard Law School professor (and now presidential candidate) Elizabeth Warren had recommended the 50/20/30 rule in her book All Your Worth: The Ultimate Life Money Plan. You should allocate 50% of income to your needs, 20% on wants, and 30% on saving and investment. We’ve also written a full article on this idea.

Bottom Line

Remember that usually, you are solely to blame for not being wealthy. But fortunately, it’s never too late to build wealth. History is replete with stories of people who became wealthy during the late 40s and 60s. Colonel Harland Sanders most popularly known as the face of KFC didn’t become financially well-off until he was 62 years old when he hit upon the idea of establishing a restaurant.

You also have the power to change your destiny. Go the extra mile and make wise financial choices that will let you to build wealth and get rich.

Change the mindset that has prevented you from amassing wealth. This post should give you plenty of ideas about what you need to change in life and make an effort for a brighter future.

Author Bio

Total Articles: 108
Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016.

Article comments


Nice tips . . .

Thanks for sharing with us. . .

Kevin says:

I can’t even tell you how many friends I have who get stuck on #1. In fact, many times they spend most of their paycheck on frivolous things before they even receive it each week. Now most of my friends are still young, but talk about starting out on the wrong foot..

Ashley says:

#2 is the worst! A $30 purchase can quickly become $65 out of your pocket if you don’t pay your bill on time.

#5 is especially true because how often do we suddenly see something that we previously never even knew existed but now we all of the sudden “need” this new thing? 🙂

Even if you’re trying to be careful, it’s easy to unknowingly spend more using a credit card than you would have if you had used a debit card or cash instead – according to research, about 18% more.


Laurie McLachlan
PerkStreet Financial

Tørklæder says:

Very nice post and as said that we spend more than we earn is true in many cases

gold schmuck says:

Thanks for sharing as mentioned You have virtually nothing put away in a savings account. No emergency fund. is very true

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