8 reasons why you are never gonna be a millionaire

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10.4 million American households have $1 million or more in investable assets. While many wealthy people inherited their wealth, the truth is that most wealthy people actually spend their lives diligently accumulating their wealth.

So now you are probably wondering why you are never gonna be a millionaire.

1. You picked the wrong career

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The truth about wealth building is that it starts with your paycheck. And some careers make wealth building far easier than others. And while your career choice certainly isn’t the only factor in whether you can build wealth, it certainly is an important one. The higher your income, the more likely you are to be able to invest that income in ways that will help make you a millionaire one day.

But don’t worry, not all is lost if you have chosen a profession that is particularly lucrative. You can always build your skill set in ways that will help advance your career or you can find opportunities to earn extra income on the side.

2. You are afraid of the stock market

Here is the second reason why you are never gonna be a millionaire. Having a high paying job doesn’t mean much if all your cash just sits in a bank account earning little to no interest. You likely won’t even out earn inflation with that strategy. If you want to build wealth, you will have to find a way to earn a strong return on your money and the stock market is one of the bust ways to do that.

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Here is something to consider, according to the personal finance website Bankrate.com, the best yield you can expect from a money market account right now is about 1.26%. If you put $10,000 into a money market account and added nothing else, in 10 years, with monthly compounding, you’d have about $11,340 total. However, if you invested that $10,000 and earned a 6% return, you’d have almost $18,200, or $6,860 more.

There is no denying that over the long term, stocks have marched upward and proved to be the investment of choice for expanding wealth. But we all know that the stock market will also take you on a bumpy ride along the way, so your fears are understandable. But discipline, patience and a strong backbone are required if you want to build wealth.

And savings that is earmarked for retirement is particularly well suited for the stock market because of the long time horizon – you have time to recover from market dips.

3. You aren’t saving enough

All the stock market returns in the world don’t mean shit a hill of beans if you aren’t saving enough money to take advantage of those stock market returns. If you don’t save enough, you are never going to be a millionaire. It’s as simple as that. Even with a great job, if you are spending all your money and not saving it – you will never become a millionaire.

And the key is to start saving as early as possible in your life because the sooner you start saving – thanks to the magic of compounding – the less you will have to save to meet your financial goals.

For example, if you start saving at age 35, you will need to put away $671 each month in order to reach $1 million by the time you turn 65 – assuming you earn an 8% annual return on your savings. However, if you wait until you’re 45 years old to start saving, you’ll have to save $1,698 a month to hit $1 million in 20 years.

So how can I start saving, you ask? Well first, you need a budget. Lay out all of your expenses to see where your money is going. Then, you can figure out where you can trim costs and save. Any little bit you can save is a good start. And whenever you get a bonus or some extra cash add it to your savings before you have time to think of ways you can spend it.

4. You are spending too much damn money

If you spend more than you earn that will put you in debt. According to the National Foundation for Credit Counseling, one in three American households carries credit card debt from month to month. And among those balance-caryying households, the average credit-card debt is $16,048, according to financial research firm ValuePenguin.

The biggest barrier to becoming rich is living beyond your means. Even once you’ve earned your millions, living beyond your means is the best way to stop being rich. Just ask MC Hammer.

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Point is, dont spend more than you earn. Save as much as you can and invest it wisely.

5. You’ve got too much debt

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Debt can be the biggest danger to your financial well-being. If you’re constantly paying credit card bills and racking up interest, you won’t have a chance to save any money. However, not all debt is created equal. Borrowing to go to school, to get the professional training you need to start your own business can help boost your career and income potential. Especially in a low-interest-rate environment like we are in today. In fact, borrowing funds is one of the most preferred funding strategies used by high-net-worth individuals with 60% opting to use bank credit before tapping their own holdings for quick cash, according to U.S. Trust.

If you are already in debt, the first step should be to create a play to pay off all that debt as quickly as possible to minimize the interest you need to pay. Your strategy should be to pay off the debt with the highest interest rate first. The quicker you can pay off your debt, the more you save on interest. If you’re considering taking out new loans—to go back to school or seed your business, for example—make sure you understand all the terms, including your interest rate and repayment details, so you can decide whether it’s truly worth it.

And if you’re considering taking out new debt to go back to school or start your business, make sure you understand all the terms, including your interest rate and repayment details, so you can decide whether it’s truly worth it.

6. You are neglecting your health

Shia_LaBeouf_smokingYou need to work to make money and you need to be healthy in order to work. According to U.S. Trust, the rich understand that, and 98% of millionaires consider good health to be their most important personal asset. Taking care of yourself is much cheaper than having to pay for healthcare once you get sick. And you can take advantage of free wellness programs offered by your employer, as well as free preventive-care services guaranteed by federal law, such as blood pressure screenings, mammograms for women older than 40 and routine vaccinations for children. Also try to quit any bad health habits, such as smoking or excessive drinking, that can cost you dearly. And quitting those bad habits like drinking ans smoking won’t just improve your personal health but also your financial health – because that stuff is expensive AF.

7. You don’t have a budget

Without a budget, there is no way you can keep track of how much you’re spending and know whether you are living beyond your means. Working toward your financial goals like saving to buy a house or funding your retirement, will be all but impossible if you don’t have a plan.

Fake it til you make it. Do what millionaires do: create a budget. Knowing where your money is going allows you find ways to save and invest more money. There are many good online financial tools to help you do just this. Consider a free digital budget tool like Mint.com.

8. You are paying too much in taxes

I know, everyone thinks they are paying too much in taxes. But the truth is there are many ways to reduce your tax burden and increase your savings and reach your investing goals. For example, you can put up to $18,000 pre-tax per year into a 401k. You can also consider a Traditional IRA, where you can put up to $5,500 pre-tax.

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