7 Money Mistakes Rich People Never Make

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What is the main secret of success? A lot of successful people say that it’s effective money management. It’s a skill no one has from birth; most people learn to manage money correctly as life goes on. If you want to achieve success in life, there are a few other skills you need to learn. At the same time it’s very easy to make a few mistakes that can ruin your chances for financial success. Avoid the following 7 mistakes and you’ll become successful in no time!

1. They’re never satisfied with their income

You probably know people who never ask for more money. They’re fine with a minimal income and don’t do anything to increase their income. However, this is not the route you should be taking! If you settle for low income or a 1-3% raise, you diminish your chances for financial success.

The truth is simple – more money means more enjoyment in life. The bigger your income is, the more goods and services you can afford, which ultimately makes you and your family happier. Don’t be afraid to ask for a raise at the company you work for – just do it the right way.

2. They almost never take risks

For years people have told you that taking risks can make you richer. In fact, you cannot take every risk you’re presented with. If you see an opportunity you can’t resist, you have to do two things. First, assess the possible risks associated with the opportunity. And second, think about insurance for your possessions (car, house, etc).

3. They don’t blindly follow experts

It seems like financial experts know everything when it comes to money management. However, no matter how experienced a person is, they can still make mistakes. And if you transfer your financial responsibility to an expert, their mistake can cost you a lot of money.

How to avoid this risk? Remember that you cannot entrust everything to financial experts – you can only take a piece of advice. For example, you can consult with a tax lawyer about paying your taxes, but you should do your taxes by yourself. In that way you’ll be fully responsible both for success and failure.

4. They never miss an opportunity to save money

No matter how rich a successful person is – the one thing that separates a successful man from an unsuccessful one is the ability to save money. The easiest way to control your finances is to do smart shopping. You should never do impulse shopping, especially if you’re looking for expensive products. What you should do is look for the best deal; the one that will let you get the best product for the least money.

Smart shopping is not a skill you can learn overnight. You can spend years and years trying to figure out the way to save money while shopping. But don’t worry – eventually you’ll become so good at this that others will come to you for an advice!

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5. They don’t spend too much

The first thing that comes to mind when we hear about a reach person is the luxury lifestyle: expensive cars, yachts, vacations, designer clothes, and so on. However, people who are truly wealthy never spend money on things like that. You’ll rarely see a millionaire driving a Lamborghini – instead they’ll choose a reasonably priced yet powerful car, like Toyota or Mercedes Benz.

Remember – everyone is good at spending money, but only a few people are great at keeping it!

6. They never obsess about the price

We’ve already talked about saving money and smart shopping. But when you’re on your way to financial success, you can easily become obsessed with low prices, looking for the best deal around. If that happens to you, soon you’ll forget how to enjoy shopping and buying new things – all you will think about finding the lowest possible price, sacrificing the quality.

The only way to avoid this is to learn everything from experience. You can buy cheap shoes, but they won’t last as long as a pair of a good-quality, more expensive shoes. The same goes for clothes, mobile phones, furniture – anything that you’re planning to buy. Compare prices and quality and choose a product that combines them both!

7. They always have a budget

No matter how much money you make – a budget is essential when you want to keep control over your finances. You can download a special app for your iPhone or Android phone, do it on your laptop, or even use a paper notebook to write down your income and expenses.

Make sure to never spend more than you earn. The goal is to spend much less than you make, so that a considerable sum of money is left each month. Save this money in your bank account and use them for something important: education, starting a family, or creating your own business.