You make money but for some reason, you’re not seeing the benjamins pile up in your bank account. What gives? I recently had a gentleman call me for an appointment and the first thing out of his mouth was “I make 6 figures but I’m still living paycheck to paycheck. What am I doing wrong?”. As I dived into his finances, I saw the same issues I tackle with many of my younger clients. Here are the top 3 things that hold people back from building wealth:
#1 You ignore your finances
When things get stressful in life, the last thing you want to tackle is your finances. When your financial life gets messy, it becomes even harder to face the bills, expenses, statements coming in that you don’t understand, and so what do you do? Shove it in your drawer as if your drawer is going to magically take care of it for you.
I call this ostrich syndrome – when you prefer to look away rather than taking action. One way to stop this is to ask for help. Ask an advisor, an accountant, or a friend to help you tackle your finances even if it’s one envelope at a time.
#2 You don’t allocate time for your finances
“I don’t have time”. I hear that even from my financial clients. The difference between them and you is that they have me following up and saying “We need to make time, because last time I checked you’re working for money, right? Well, money’s going out the back door if we don’t plan it, so are you available Monday or Wednesday?”.
So you’re telling me you’re working 40-50 hour weeks to make money, but then you don’t have time to actually sit down and decide how to grow that money, how to keep that money, and how to make more of that money while you sleep? Come on now, that makes no sense! Scheduling an hour a week or even an hour a month to catch up and plan your finances can increase your money’s growth potential, save you time in the future, get you closer to financial independence, and make you feel more confident in your decision making.
#3 You fail to plan
In my vast experiences as a financial advisor, having a financial plan is even more powerful than how much you invest. I’ve helped people making less than $50k a year, grow more wealth than the average person making 6 figures. How? Planning correctly. Financial planning is the map you need to get to your destination. It’s that simple. You don’t have to come up with all the answers – that’s the beauty of people like me. As a financial advisor, I use my knowledge, resources and network to give you the map. All you have to do is drive.
So if you’re working with a financial advisor, make sure you understand what the plan behind the investment is. You should be meeting with your advisor at least twice a year because life changes may result in investment changes, and it’s important for your planning process.
#4 Your Expenses don’t have direction
Yes, I know, none of us like to budget. I get it. And the thought of sitting with some advisor that will tell me to stop spending and then possibly shame me into feeling bad for my financial choices makes me want to ignore the issue and watch a netflix movie instead. But budgeting isn’t the only answer to building wealth. I laugh at some of my clients when they tell me “I thought you were going to tell me I can’t go to starbucks anymore”. “Why would I do that? Your $6 latte isn’t the problem” I reply. The problem is not having direction for the rest of their money. When you don’t have clarity on what to do with your money on a monthly basis, you will blindly spend on frivolous things. The trick is to have a clear direction on how much will go where every month.
If you need help with your planning and investments, schedule time with me here.
*The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.