Some Reasons Why You Are Not Rich

I got a email a while back with the subject along the lines of this post's title. It was originally penned by someone called Jeffrey Strain - a name I don't recognise but there are some truths to his article.

Below are the 10 reasons he says why someone is not rich. Edited by yours truly of course:


1. You mind what your car looks like.

I find this to be very true. Most people use the car they drive as some sort of a status indicator. It's like, "I drive a big car therefore I must be rich." kinda statement. Don't get me wrong, I am as much a car enthusiast as the next male but with the prices of cars in Malaysia I find it very hard to justify driving even cars like a Toyota Camry and other equivalent models. Those cars retail in M'sia with prices in excess of RM100K!! Man, if I had that kinda money, I would rather buy a house! Real estate can appreciate (albeit slowly for some cases) whereas cars just depreciate. After 10 years your car will be worth next to nothing but a house can still sell for the original sum you bought it for at least.

A car is just a mode of transportation to get you from point A to point B. Car prices in Malaysia are just not making any sense - financial sense that is.


2. You feel entitlement.

The mindset that you feel entitled to something that you can't afford can prevent you from geting rich. A lot of people are seemingly living a lavish lifestyle going by the material things that they own but if acquiring those things lands you into debt, you may want to rethink your lifestyle.

I can hardly blame some people due to the amount of 'brain-washing' one is subjected to through advertising these days. But if you have your head screwed on right you really should live within your means rather than relying on the credit card. It may be really ego satisfying to own a 50 inch flat screen TV and 'one-up' your neighbour and friends but if you are like me, you will spend less than 2 hours per weekday watching TV. If you think that way the question, "Why are spending so much money on something that you hardly use?" will crop up.


3. You lack diversification.

Investment diversification that is. Problem is most people hardly even have savings let alone investment portfolios. Here's the killer - the first step to investment is savings. If you don't have savings then you don't have any chance to invest. Period. "Investing" using money that you need for some other things is NOT investing. It's called 'speculating' or a more common term - gambling.

Most people think that they will start investing when they have a little bit more money. Thing is you will never have that 'little bit' more money, ever! Why? Because you will find some use for the extra - be it for something useful or otherwise. You've got to get your mindset right first. That is you have to change your thinking and habit into 'Save first, spend later' rather than the more widely accepted norm of 'Spend first, save later'. After you spend, there will be nothing left to save.


4. You started too late.

After you've got the investment part down right, you may find that it's too late to make much of a difference. You may find that you're out of time to make your investments give any significant returns. So you need to start early. How early? The answer is, "You're never too early to save and invest." The best time is when your first paycheck comes in but thing is most people don't think about investing until they're almost due for retirement.

Some people might cite other reasons for not saving and investing. Excuses like they've got kids to send to college. For me I would rather save for my own retirement first than worry about how my kids are going to go through college. This might seem heartless on my part but the truth is there are banks and financial institutions out there that are willing to loan money to a young adult to go to school but there is none that are willing to loan out money to finance someone's retirement. If my kids really want to get through college, they will find the finances one way or the other. when funding your own retirement, you've only got yourself to rely on. Youth is an asset after all.


5. You don't enjoy what you do.

This just about covers everyone. Just about because the minority that enjoys what they do, employs the rest of us! You're right, I'm just kidding but it's true that if you don't enjoy what you do, you will find it very difficult to save money. If you hate your job, chances are you'll need to spend money to de-stress yourself and that might leave you with nothing to save in the end. So go find something that you enjoy doing or learn to enjoy what you're doing. How? That's a topic for another day!


6. You don't like to learn.

Would you pay money to get a bunch of clowns to work for you? Nuff said.


7. You buy things that you don't use.

If you have ever gone shopping without a shopping list then you've probably ... no make that definitely bought something that you don't use. Save money! Make a list before you go shopping and STICK to the list!


8. You don't understand value.

Another shopping tip. Don't let prices fool you. Expensive things may not neccessary be good but cheap things may not necessary be all the cheap either! You need to look out for value. Example - would you rather buy a RM300 knife that can last a lifetime or a RM50 knife that you need to replace every year? Think about have many RM50 knives that you would throw away in a lifetime and how much that would cost you.


9. Your house is too big.

Similar to reason number 1. You only need so much space to unwind. Big house = big installment payments + big maintenance cost = wasted money that you could invest and make you rich.


10. You fail to take advantage of opportunities.

This one needs you to keep your eyes and mind open to opportunities that come your way. I too need to really brush up on this!


That's some of the reasons why people are not getting rich. Phew! Getting rich is hard work! No wonder most of us are poor!