🌼5 Money Habits I Wish I Learned Earlier In Life(CHECK THIS OUT)

🌼5 Money Habits I Wish I Learned Earlier In Life(CHECK THIS OUT)

“True wealth is silent, under the radar, and almost invisible.”

1. Don’t Look Rich — Become Rich

Rather than actually building wealth, people tend to spend their money on things that elevate their social status.

Whether expensive cars, designer clothes, fancy handbags, exclusive restaurants, or the latest iPhone, a lot of money is wasted on showing off to others.

But as Morgan Housel said in The Psychology of Money:

“Spending money to show people how much money you have is the fastest way to have less money.”

If you want to build wealth, you’ll have to stop playing status games and start playing the wealth game.

But status and wealth often get confused with each other.

That’s because status symbols — sports cars, designer clothes, fancy watches — are visible, flashy, and tangible.

We can see and touch these things.

But symbols of true wealth tend to be invisible to the outside world.

Unless you show your bank- or investment account, no one can see how wealthy you are. It’s much less flashy.

Read also: 4 rules to live by if you want to get rich (must read)

“The first iron rule of money is that wealth is the stuff you don’t see. It’s the cars not purchased, the clothes not bought, the jewelry forgone.” — Morgan Housel

People playing status games spend their money on looking rich. People playing the wealth game spend their money on actually becoming rich.

True wealth tends to be silent, under the radar, and much less visible.

Where you can see someone’s $300k Ferrari, you generally don’t see someone’s $300k investment portfolio.

And where you can see someone’s $10,000 luxury vacation (on Instagram), you generally don’t see someone’s $10,000 / month passive income stream.

In other words, building true wealth requires being less flashy.

It requires not playing status games.

It requires caring less about what other people think of you.

“Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you.” – Morgan Housel

Only when you put your ego aside can you stop playing status games and start playing wealth games.

2. Invest In Yourself

Investing in yourself — your skills, knowledge, and network — has the highest return on investment compared to most financial assets.

When you increase your skills and build your network, becoming wealthy is no longer about luck — it’s a logical long-term outcome.

That’s why even Warren Buffett said, “The most important investment you can make is in yourself. One can best prepare themselves for the economic future by investing in their own education.”

And Benjamin Franklin said, “An investment in knowledge pays the best interest.”

Whether it’s through books, online courses, one-on-one coaching, or live seminars — prioritize investing in yourself.

One new insight from a book could change the trajectory of your life forever

One practical tip from an online course could make you an extra $1000 per month

One new connection from a seminar could turn into a life-long business partnership

Investing in yourself pays some of the highest dividends.

3. Don’t Try To Beat The Market

For most investors, index fund investing is a much better investment strategy than picking individual stocks in the hopes of beating the market.

Although beating the market (aka, the S&P 500 index) sounds cool, it usually ends in disaster:

Studies show the average investor underperforms the S&P 500 by 2.5 — 4% per year

90% of investment professionals fail to beat the S&P 500 in the long run

Paradoxically, by trying to beat the market, most investors underperform the market. Turns out it’s much more difficult than most investors think.

As John Bogle, founder of Vanguard, said:

“Owning the stock market over the long term is a winner’s game, but attempting to beat the market is a loser’s game.”

Yes, in many areas of your life you don’t want to be average. You don’t want an average relationship, career, or life.

But when it comes to investing, average returns (those of the S&P 500) compounded over a long enough timeframe can make the ordinary person very wealthy.

Over the last 60 years, the S&P 500 index averaged a return of 10.2% per year. And if you invest $5,000 per year into an S&P 500 index fund, you could end up with

(Assuming the historical 10.2% annual return.)

$80,455 after 10 years

$292,961 after 20 years

$854,250 after 30 years

$2,336,778 after 40 years

$6,252,561 after 50 years

That’s why even Warren Buffett said, “By periodically investing in an index fund, the know-nothing investor can actually out-perform most investment professionals.”

Rather than trying to beat the market, it’s usually smarter (and more profitable) to simply match the market.

This is not to say you should never invest in individual stocks (or other investments). Personally, I really enjoy researching stocks and sector-specific ETFs — and achieve good returns with it. But I do this with only 10–20% of my portfolio. The core of my portfolio consists of index funds.

4. Take 100% Ownership Of Your Life

When I lost my life savings in 2014 (I made some dumb money mistakes), I blamed other people for my situation.

I blamed my parents for not teaching me about money

I blamed my friends who fueled my gambling behavior

I blamed my boss for not paying me enough money

But all this blaming got me nowhere. It kept me stuck in the same old depressing situation.

One day I realized that no one was coming to ‘save’ me and I had to take 100% responsibility for everything in my life.

Instead of staying stuck in a victim mindset, I started:

Reading books about finance

Studying the stock market

Developing high-income skills

Banning myself from gambling websites

That’s when my entire life changed. I went from being broke and depressed to earning $10k / month from my laptop.

This experience taught me an important lesson:

Stop being a victim and start taking ownership of your life. It’s all you vs. you.

As Marcus Aurelius, the ancient Roman emperor, once said, “You have power over your mind — not external events. Realize this and you will have strength.”

Read also: The two things you must do to transform your money situation (must read)

5. Learn Financial Literacy

Building wealth isn’t necessarily about making a lot of money — it’s about mastering your money.

As Robert Kiyosaki said in Rich Dad Poor Dad:

“It’s not about how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”

That’s why financial literacy — understanding how to manage your money — is far more important than how much money you make.

People who make a lot of money without having learned the financial foundations tend to quickly spend (or lose) their money.

Statistics show 70% of lottery winners end up broke and 33% go on to declare bankruptcy within 7 years after winning the lottery.

And many professional athletes and famous entertainers who made millions in their careers ended up bankrupt too:

Mike Tyson made more than $300m in his career but filed for bankruptcy in 2004

Johnny Depp earned over $600m in his career but almost had to file for bankruptcy

Nicolas Cage earned over $150m in his career but nearly lost it all in 2009

These examples show that even if you’ve made hundreds of millions, you can still lose it all when you lack financial literacy.

“Money without financial intelligence is money soon gone.” — Robert Kiyosaki

No matter which income level you’re at, you need to learn the foundations of financial literacy if you want to build wealth:

How to budget

How to pay off debt

How to do your taxes

How to build an emergency fund

How to invest in stocks/real estate

How to differentiate between assets and liabilities

How to differentiate between good debt and bad debt

When you learn these money-management skills, you’ll reap the benefits for the rest of your life.

Remember, it’s not about how much money you make; it’s about how well you manage your money.

This requires financial literacy — and financial literacy can be learned.

CONTRIBUTED BY Jari Roomer

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