Personal Finance

Bad Financial Decisions Are Making You Poor

The idea of wealth being a choice is a controversial one. The reason people end up poor is a complicated issue and due to many large societal factors. I am going to argue that in some cases being poor is indeed due to flawed decision making. First off, let me add a bunch of context. I am not taking about the big global issue of poverty. I am talking about a very specific situation. I am looking at people in the US that are born into a relatively privileged situation, provided a certain level of opportunity, and then end up poor after years of bad financial decisions. This isn’t the simple “the poor are lazy” or “the poor can’t manage money” argument. We are going much deeper. The purpose of this article is not to judge or villainize these people. It is to reflect on the what we can all do better on our own personal finance journey.

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Here Are The Reasons You Are Broke

1. You Don’t Think Long Term

A big part of building wealth is long term thinking. You can’t make decisions based on the whims of your day to day life. You have to understand that time passes. Your situation will change and evolve. Things that are important today will not be important a year from now. Or five years from now. We know from behavioral finance that our brains do not intuitively do a good job at this.

You need to think about your finances in terms of what you want out of life in one year, five years, or ten years. This will lead to the best outcomes.

2. You Make Impulsive Decisions

Impulsive decisions will destroy a budget. If you build the right discipline these type of purchases will not even be tempting. I was thinking about this the other day when I was at Safeway. Some locations have those in store Jamba Juice kiosks. You can pick up a massive caloric smoothie for $8 as you walk out the door as a reward for shopping. This is the type of impulsive decisions I am talking about.

Here is the thing. It is different if Jamba Juice is your favorite thing in the world, it was a treat you had planned, and you were looking forward to it all week. But to just throw away $8 because the smoothie joint is right in front of your face. These type of bad financial decisions day in and day out will leave you broke.

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3. Taking Money Advice From The Wrong People

They say you end up being like the five people you spend the most time with. In it unbelievable how true this ends up being. People rub off on each other. Also, the people around you set the benchmark for what is normal. If you are around people that make bad financial decisions it is likely you will do the same.

Avoid Bad Money Advice

You need to surround yourself with at least a few people that make good financial choices. I am not saying they need to have high incomes or be wealthy. They just need to have a balanced view of how money works.

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This means a couple of different things. It is important to be around people that understand every cumulative decisions can lead to a big outcome in the end. Also, people that don’t live with the view that getting rich “just happens”. The idea of wealth being a lucky thing that is endowed upon a few fortunate souls is not the right mindset that is going to help you grow.

Lastly, avoid people that feel entitled to a certain type of lifestyle. I am not just talking about upper middle class people. This manifests in people of all walks of life. I am talking about the person that thinks regardless of the work they put in they are entitled to a nice house, cars, vacations, and college educations for their children. The world doesn’t work like this.

4. Always Play The Victim

Do you know someone who is always a victim? They are always down and out. They are always getting scammed or falling on tough times. I am a big believer in the statement “Luck is what happens when preparation meets opportunity”. Sure, bad things can happen to someone that does all the right things. But there is a certain type of person that seems to make a habit out of it. Finding a way to always be the victim will leave your poor.

There are people that continually put themselves in situations in which they are the victim. They let people take their money because subconsciously they need the approval and engagement of the other party.

Money is a strange thing. Whether rich or poor money gets entangled in romantic relationships, friendships, and family. I will give you an example. Have you seen the first season of White Lotus on HBO? Great show by the way. There is the lonely rich lady (Tanya McQuoid) that throws her money around as a way to connect with people. She tells one of the employees at the hotel spa (Belinda) that she will consider giving her the capital to open her own business. This builds up Belinda’s hopes only to let her down. It is clear from the scene that Tanya does this to people time and time again.

Let me be clear. Belinda is not to fault. She is a practical, balanced women that is looking to take advantage of a great opportunity. The problem is that if you surround yourself with emotionally unhealthy people like Tanya this type of manipulation will pop up time and time again.

5. You Live With A Poverty Mindset

Why do poor people stay poor? The poverty mindset is a complicated topic. There is the social science part of this. The challenging thing about poverty is that it traps people into repeatedly making bad financial decisions. Poverty actually negatively impacts their decisions making (and health as well). The poverty mindset leads people to make decisions based around money and opportunities being limited. The poverty mindset is a limiting belief that success or financially stability is not sustainable.

I am going to focus more on the financial psychology. It is not good when people views themselves as poor. This is not a judgement or a status thing. The problem is that this view is a self reinforcing view that the situation can not be changed. Everything in life becomes framed around being poor. It is the opposite of empowering. This ties in closely with always being victim. If someone views themselves as being a victim and being poor they give up agency to change their situation. They accept that they will need to rely on others or get lucky (say win the lottery) for things to get better.

6. Reactive Decision Making

Success in money and life boils down to decision making. Everything is about decisions. You know what the wealthiest business leaders in the world get paid to do. Check out Jeff Bezos’ thoughts on this. Towards the end of his time at Amazon he viewed his job as making a couple key decisions each day.

People that live the good life understand this. They are strategic with their decisions They make decisions when they are well rested and in the the best frame of mind. When it comes time to actually implement a decision the path was decided long ago. They have slept on it, and reflected on the different ways the situation could play out.

You will probably end up poor if all your decisions are reactive. You need to consider the information available about your finances (good and bad) and then make a long term sustainable plan. It can’t be “oh, my furnace went out today so now I need to get a second job”. These are the type of bad financial decisions that define the poverty mindset. You need to slowly break out of this type of thinking.

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7. Being Entitled Makes You Poor

No one deserves anything in life. Especially when it comes to money and material possessions. You need to make the connection between effort and reward. This is a core part of a strong financial psychology. Everything goes wrong when this breaks down. Usually, the problem is that people compare themselves to the people they are around. If other people have a certain lifestyle then they feel entitled to the same. This is not how life works.

Or here is another crazy thought. Many older adults feel entitled to live the same lifestyle they had previously in life, even if their financial situation has signicantly changed. They get use to a comfortable life and don’t realize that this was a privilege.

I had a family friend that recently went to prison for defrauding investors. He pretty much ran a twenty year long Ponzi scheme. He was a horrible investor and consistently loss money. Rather than be honest and admit that the fund had dried up. He sent fake statements showing that everyone was making a ton of money. This allowed the scheme to continue for decades. And for his family to benefit with an upper middle class lifestyle paid for at the hands of investors.

Here is the thing that is mind boggling. One this all blew up his family had trouble adjusting. They felt entitled to their 4500+ square foot house. I mean they had lived there a long time, right. It was not fair for it be sold or taken away. Again, this is not how life works. To succeed financially you have to break away from feeling entitled to anything.

8. Too Late To Start Saving For Retirement

Life is about timing. This is true for building wealth as well. One of the worst financial mistakes is waiting until it is too late to start saving money. I see this all the time. Making money is about leveraging your strengths. It is about using your background and education to fill a need in the market. Timing is a huge part of this. If you don’t make hay while the sun shines you will regret it. Let’s look at a couple examples.

I have an acquittance that was on the same path as everything else around me back when we were in our early twenties. But then he slowly slipped further and further behind in life. After college he didn’t have it in him to grind out an entry level business job. He wasn’t lazy. He was actually a really hard worker. Unfortunately, he just didn’t have the guidance and support around him. He was proud of his college degree. I mean he was the first one in his family to go to college. So it was a big accomplishment. He would make comments about how he had all the time in the world to figure out the whole career thing. I mean finishing college was the difficult part, right?

Unfortunately, this did not work out well. He moved around and took low stress, low pay jobs that did not leverage his college education. This wasn’t a big deal the first couple of years. There was always time to turn things around, until there wasn’t. At one point he was working at a clothing store and had the chance to take a step forward into a managerial role. He was the only one at the shopping mall with the a college degree. He passed on this opportunity. Now ten years have passed. The college degree is pretty much useless. Employers want to see someone who can leverage their education. Not just a degree typed on a resume.

Let’s look at another common example. Waiting until it is too late to address retirement. Some people incorrectly think that retirement is something you deal with when you get old. I mean if you are young you are going to be working for a long time, right? Then people get married and have children. Then they push off saving for retirement because they have a a lot of financial responsibility while the kids are in the house. Once the kids get older they will get around to the whole retirement thing.

This never works out. Life moves quick. And responsibilities continue to pile up. The time to save money and get ahead is early in life. Or frankly as soon as possible. It doesn’t have to be large amounts. It is all about building the habit.

9. Don’t Leverage Your Strengths & Skills

It takes time and effort to hone skills. You have to capitalize on them while you can. I am talking about both god given talents and skills you work towards. Capitalism is about connecting your unique skillset to where there is a need in the market. In the best case scenario you find something where you can leverage your skills for good pay, and also be happy. The happiness or passion aspect is not guaranteed. The younger generation focuses too much on this aspect. Unfortunately, this is not how the world works.

Everyone has things they are good at. Or simply things they have put a lot of time into mastering. It is helpful to spend some time reflecting on what this entails for you. Then also think about your interests and passions. Try a bunch of stuff. Life is not about perfect alignment. It is just about finding something that is good enough. If your job doesn’t check the passion box but it leverages your skill set for lucrative pay, then maybe pursue a passion project outside of work.

An uphill battle will be pursuing a profession that doesn’t match your innate strengths. Maybe you have always wanted to be a doctor. But you are terrible at science and find school painful. Yes, you can get tutoring and continue to work at it. And in some ways fighting through this may be satisfying. But this will also make life much harder than it needs to be. Is there a reason you are continuing at something that doesn’t’ align with you talents? Was it because you were told you could do anything? It can be helpful to take a step back and really understand why you are pursuing a certain track in life.

10. You Give In To The Urge To Buy Stuff

Don’t get sucked into this trap. Most people don’t even realize how much we are always being persuaded to buy stuff. We are surrounded by it at all times. If you buy this you will be more beautiful. If you buy this you finally be cool. It never stops.

Social media has only amplified this. We see people living what seems to be the perfect life. How do they do it? People that are traveling to the most exotic places in the world. Making tons of money. Hanging with beautiful people. How can the average person even compete?

The reality is a lot of this stuff is fake. A lot of social media content is made by some dude in an apartment spending all day trying to get the perfect footage to make his office or home studio or whatever look awesome. Or it is some corporate dude that is miserable 90% of time showing off the one week a year he is happy on vacation. Ignore this stuff. Or treat it for what it is, entertainment.

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The reason I am writing about this is the financial impact. It changes what you think is necessary to live a good life. Connecting happiness with material belongings never works out. It will keep you poor. Okay, I got a story for you.

This was awhile back. But it still cracks up to this day. I was talking with a lady back in my early twenties. As we were getting to know each each other we were talking about music. I mentioned something about an Ipod. She told me about the specific Ipod model she had just purchased. It was supposed to be a flex. I was blown away. These are the type of bad financial decisions that will leave your poor. Focusing your identity on arbitrary consumerist things like a specific Ipod model.

11. Don’t Understand That Financial Responsibilities Evolve

An important component of avoiding bad financial decisions is thinking long term. I have already covered this. Another component of this principle is understanding that financial responsibilities will change over time. You can’t project the rest of your financial life based on your expenses today. People understand this logically, but they do correctly compensate when making mental calculations.

I see people that feel financially well off with two incomes and no kids. So they spend the rest of their money. I mean they have a house and job, right? They are doing everything right. They blow money on unsatisfying short weekend trips and random shit. I guess this is fine if it is adding significant value to their life. But you shouldn’t be spending just because you can.

Saving this money could be the difference between getting ahead in life and always trying to keep up. You will end up in much better shape if you can take a step back and actually work through what your financial future will look like.

12. Focus On The Wrong Problems

You’re Asking the Wrong Financial Questions

Poor people focus on small problems. In some cases they don’t have a choice. In other cases they mess up with the big decisions and try to change things by micromanaging the small things. This rarely works. If you don’t save money, and invest wisely over decades. You can’t make up for it by shopping around on your cell phone bill. Even if you spend weeks comparing every possible alternative and looking for deals, and getting input from family friends. It is not going to change the big picture trajectory. People focus on the the wrong problems all the time without even thinking about it.

It is not just people without money that do this. I have seen the same behavior among high income individuals. I have seen someone with a family income of 400k+ a year endlessly deliberate paying cash versus financing a new luxury vehicle. The issue is all the energy and effort going into this. The decision itself is not really that important for his financial future. The time would be better off spent thinking about life insurance or an investment allocation.

13. Think Small

Focusing on the wrong problems is not good for your financial health. Neither is thinking small. I mean a couple different things by this. It could be putting time or energy into solving small problems like your cable bill. Or it could be thinking small in terms of career growth and future income streams.

Life is unpredictable. This applies to business and careers as well. You should always be thinking about the different paths available to make money, develop skills, and grow as a person. You have to be practical. But at the same time you should be dreaming about the potential upside. Your financial life is unlikely to change if you currently have limited financial resources and then simply accept the status quo as the way things will always be.

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14. Think Wealth Just Happens To Some People

This is more common than you would think. They are some people that view money and wealth as something that just happens. This is dangerous. In my experience, this is the mindset of people that really struggle with money management skills. The problem is that this mindset avoids personal agency. It stops people from taking personal responsibility. It stops people from coming up with a plan to change their situation.

How Many Millionaires Actually Inherited Their Wealth?

Yes, some people are born into wealth this is true. But there are also many people that come from nothing and then work hard to change their situation. According to Fidelity 88% of millionaires are self made. There is no use dwelling on the people that are born rich. This is not going to change your situation. It is more beneficial to try to pick up a few habits or skills from people that were able to change their financial situation.

The worst part of this mindset is the entitlement. It doesn’t acknowledge the hard work and good decision making of the other people. There are people out their making signicant sacrifices to get ahead. It is childish to not give this the respect and admiration it deserves.

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15. Let Emotions Impact Financial Decisions

Why Are We So Emotional About Money?

Emotions have their place in a well lived life. But not in financial decision making. Our brains are not good at thinking long term. We have to trick them into thinking this way. Do NOT make financial decisions based on your current emotional state. This will lead you astray.

How does this manifest in daily life? Sometimes in small ways. Maybe you go pick up a half dozen Krispy Kreme’s after getting yelled at by your boss. Or maybe you decide to go on an exotic vacation with your friends that you can’t really afford. Just because you don’t want to admit that you really shouldn’t be taking the trip.

It is critical to build the habit of not spending money when you are mentally exhausted. Sleep on a decision. Wait until you are able to reset. In general, waiting on purchasing decisions leads to much better outcomes.

I was all fired about to buy a Philips Hue Light set for my TV. I have the lights on my computer and I love them. They sync up with videos games and music. It is amazing. I went down the rabbit hole of what I needed to get this same setup on my TV. It was about $500. I had spent a few hours looking into. And I kind of felt like I deserved it. I held off and revisited the purchase a week later. I then realized how stupid it was to spend $500 to get some small lights for my TV. I decided to wait until the price went down.

16. Do What Everyone Else Is Doing

Keeping Up With The Joneses Is Keeping Your Poor

Let me start by saying this. Most other people make bad financial decisions. A lot of times bad decisions in general. According to MarketWatch, “the median savings balance — not including retirement funds — of Americans under 35 is just $3,240”. See, you really don’t really want to aspire to be like everyone else. Trust me, you don’t want to be financially stupid.

It is so easy to get caught up in this. Honestly, it is only natural. You will get farther in life by forging your own path. It can feel uncomfortable at times because people won’t understand it. They will make comments about how it impossible to pay outright for a house or to save a certain amount of money. But what they don’t see is that you are saving and investing every month while they drop a couple grand on a two day trip to Las Vegas. Year after year this starts to accumulate and from a financial perspective you are living in a whole different world.

It is difficult to go against the grain at first. But it is so worth it! I remember when people told me I couldn’t accomplish some of the financial goals I laid out in my early twenties. Here is thing. I was willing to make sacrifices that other people were not willing to make. And over the years the results started to snowball. It is self reinforcing. Once you see the results you get even more confident in the path you are carving out.

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17. You Don’t Understand The Difference Between Needs And Wants

This is a big financial mistake people make. To succeed financially you need to separate wants from needs. People like tricking themselves so they can purchase whatever they want. You have to catch yourself on this. I had a coworker that was looking to save money by canceling Comcast. The cable bills are ridiculous these days. They just keep going up and up. And for what? To watch the sensational, clickbait local news. This type of content is corrosive to the mind. Anyways…

The goal of this individual was to save money by cord cutting. I planned to share my streaming services with this individual so it was an easy win. Then I got a phone call. She was considering buying a smart TV so that it would be easier to stream. I explained this was unnecessary. A simple Roku or Firestick would allow streaming on the current TV. This led to a back and forth discussion on why it would be easier with a smart TV.

Here is the thing. To me this was just someone trying to justify to themselves that getting a new TV was a “necessity’. And a smart money saving move. People do this all the time. They frame every little purchase as some type of long term investment.

18. You’re Unwilling To Make Financial Sacrifices

Sacrifice is the name of the game in getting ahead financially. Again, wealth and money doesn’t just happen. At least for most people. You have to make trade offs. You have to give up things you may want in the moment. You have to delay gratification. You have to grind out a job you don’t like if it is on the path to better things. There is a quote I always see at Jimmy John’s whenever I am getting a sandwich. “If you do the things you need to do when you need to do them, then someday you can do the things you want to do when you want to do them.” This statement by John C. Maxwell really resonates.

The point is not that you need to be miserable, but that there is trade offs involved in accumulating wealth. This concept is all about prioritization. It is about making small sacrifices to get a bigger, better outcome. You don’t want to take it too far. You don’t want to sacrifice your health and overall happiness all the time to make money. But there are times when you will need to grind through unpleasant situations and dealing with unpleasant people to get ahead.

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19. Don’t Understand Marriage And Relationships

Money And Marriage

The biggest financial decision in life is deciding who you marry. I am not joking. Supposedly Warren Buffett even said this. The partner you select has an impact on your life beyond romance and love. This is true for many reasons. First off, the people you surround yourself with will rub off on your decision making. Second, your spouse is someone you will spend money with. As a pair your will both regress to the mean of your financial skills and decision making. So choose wisely.

I can’t say it any better than Warren Buffett. “You want to associate with people who are the kind of person you’d like to be. You’ll move in that direction. And the most important person by far in that respect is your spouse. I can’t overemphasize how important that is. Marry the right person. I’m serious about that. It will make more difference in your life.”

20. You Resist Change

If your financial situation is not good then you will have to make significant changes to get a different outcome. This may sound straightforward, but people refuse to accept it. People are creatures of habit. They have routines and they want to stick to them at all costs. Don’t be like this. Regularly challenge yourself to break out of this mindset in every aspect of life.

I am the same way. I get a certain level of success. I get to do the things I want. Then I am reluctant to do anything different. Even if I am not satisfied. I don’t want to give up what I have.

But you only live once. This is not the way to go about it. Dream big and accept change. What do you really have to lose if you don’t like your current situation?

21. View Yourself As Someone That Is Bad With Money

Psychological Reasons Behind Your Money Problems

I think people do this to let themselves down easy. They make bad financial decisions. Decisions that really screw up their lives. Then they accept it because “they are bad with money”. People do this to avoid accepting responsibility. It is much more difficult to say I am lazy and I didn’t feel like researching this topic. Or I am impulsive and couldn’t delay gratification. No one wants to admit something like this. It is easier just to accept that you not good with money.

At the core, this is a fixed mindset issue. As if money skills are something you have or don’t. This is not true. Money matters are really not that complicated. You just have to put in a little bit a time. You don’t need to understand how derivatives work or speculate on the impact on the Fed’s quantitative tightening approach. It is all about building simple and reproducible habits. Then sticking to them day after day, week after week, month after month, and year after year.

22. Wait Too Long To Make Decisions

It is important to be thoughtful with decisions. They say that Warren Buffet spends a year a working on a decision and a day executing it. Success in life is more influenced by our decisions than our day to day actions. There is a time for methodical research and thinking. It can be helpful to mull something over through the ups and downs of life. Sometimes time and careful reflection brings clarity. But other times it does nothing productive.

There are certain decisions in life when you just got to move. You got to pull trigger. It is not productive to be thinking about doing something year after year. I know one person that has been thinking about buying a house for five years. They are a high earner and can definitely afford it. Plus, they know they want to live in the area the rest of their life. But they wait, and wait, and wait.

The low 2.75% interest rates have now ballooned to 5% or 6%. Home prices have fluctuated up and down. There will never be a perfect time. At some point, you need to have the courage to move forward. Life starts to move pretty fast once you get into your thirties and beyond.

23. Always Get Further Behind In Life

Some people think about the trajectory of their life a lot more than others. I have realized this to be true especially with people in their late 50’s and 60’s. Some people understand that the clock is ticking and they better make the most of their remaining good years. Other act like things will just go on the same forever. In terms of finances this means making decisions as if everything will always be like it is right now.

Life moves quickly. There are certain stages that you need to capitalize on. In pop culture there is this whole idea that the thirties are the new twenties. This is false. We are humans. We have biological clocks. If you want to have a family you don’t get a throw away decade. If you want to go deeper on this check out the Defining Decade: Why Your Twenties Matter by Meg Jay.

You have to build the appropriate social capital in each life stage. It will be frustrating if you waste away your twenties living like a child. The time will fly by and then you will look around and see that your peers are so far ahead. They have careers, they have spouses, they have houses, and they have accumulated wealth. You will feel so far behind that it seems impossible to even catch up.

I am not saying that life is a race. It is not. No one wins. At the end of the day we will all die. You have decide what is important to you and prioritize accordingly. It is just important to remember you can not reverse the clock.

24. Get Tricked By The Gig Economy Scam

I hate to break it to you. The gig economy is a scam. This idea that you get to sleep in and work whenever you want. It actually is too good to be true. The ease and flexibility comes at a cost. The pay is not that great.

Here is the trick. These companies pay you above market rate hourly knowing that you will not think too much about running your car into the ground. People are not intuitively good about calculating the long terms costs. I hear things like I will make up for it on my taxes. When I hear this, it is clear to me that the individual does not understand how taxes work.

The gig economy may be acceptable for college kids or a short stretch when you need some quick cash. Other than that avoid it. I have never seen someone get ahead and build substantial wealth through these jobs.

25. Makes Excuses That You Are Pursuing Your Dream

This is so common with millennials. We were all raised with this notion that we were special and could do anything we wanted. We were told to follow our passions and explore the things that made us happy. Honestly, this was horrible advice. Well, it just doesn’t help lead people on the path to a satisfying life. Let me explain.

Money Excuses You Need To Stop Making

I have friends and acquaintances that took the whole “the thirties is the new twenties” thing to heart. They enjoyed music, or videos games, or whatever and decided this was going to be their thing. The problem is that these industries don’t really pay money. Yes, you see rich rock stars on Instagram or the video game sensation Ninja getting paid the big bucks. But again, this is social media. This is not real life for most people.

If you ignore a financially sustainable path with the excuse that you are pursuing your “dream” you will end up unfulfilled. You will become frustrated with the very thing you actually care about most. And on top of this you will be broke. Being broke is actually not that fun. You get behind in life because you can’t afford a house, or to get married, or whatever it may be. The point is not to give up your passions to be some unhappy corporate suit. The point is to not trick yourself by justifying every bad financial decision as “pursuing your dream”.

26. Treat A Hobby As A Job

This connects with the the advice on how to “avoid getting behind in life”. The twenties are not a period to explore your hobbies and see what happens. This is the type of bad financial decision that will lead you to being a poor thirty something.

Hobbies are great. Trust me, I have a bunch of them. Baseball cards, blogging, singing, playing guitar, computer games, making TikToks, and the list goes on. These are not investments and these are not jobs even if they bring in a little bit of money. There is so much hype about side hustles and breaking away from the nine to five. This is social media click bait. For the average person, these pursuits are something you should be doing for fun.

Plus, why put so much pressure on yourself for something you are currently passionate about. If you like playing music, this can be something fun you do in the evenings the rest of your life. You will end up frustrated if you decide that self releasing songs is your job. Trying to suck money out of a profession in which there is very little will leave you bitter and broke.

Get a day job. Conform. And then your hobbies and passions can still be fun and rewarding.

27. Not Strategic With Personal Finance

People are strategic with their school choices, career paths, and other big life decisions. But then makes personal finance decisions on a whim. As almost, this is cool and stylish. As if this being casual and informal about it makes you seem cool like the rich and famous people on TikTok. This is freaking stupid.

Long term personal finance decisions are more important than a school or career decision. Becoming financially independent opens up pretty much every door in life. You can do whatever you want. That is way cooler than making bad financial decisions so you can pretend you don’t care like Kayne West.

I met someone who was critical of those who reviewed all the flight options for an upcoming vacation. They booked the first one they saw and left it at that. The vacation is not more fun because you avoided an extra five minutes of research. Especially when the price difference between the flights is a actually signicant based on your income and net worth.

28. Decide Some Things Are Financially Impossible

This is sort of budgeting related. I have never been a fan of when people say something can’t be done. People make certain financial choices for themselves and then project those onto everyone else. This is a big financial mistake. To build wealth sometimes you need to be a contrarian. You need to think for yourself and break away from the grain.

Back in my early twenties I liked to play around with the idea of saving enough money where I could buy a house in cash back in my home down. Moving back home seemed pretty cool because I was living in a super high cost of living area as a recent college grad. I loved thinking about how much control this would give me over my life. No mortgage, no dependence on a employer, etc.

Over a couple of beers one night, I was telling a friend about my idea. His immediate response was that is was not possible for me to save $300,000 or $400,000. I did not appreciate this type of thinking. The reality was I had been working really hard at saving every dollar I could. At the time, my friend and I probably had similar incomes. The difference was he spent his paycheck as soon as it landed in the bank.

Fast forwarding five years, I find this discussion almost comical. I no longer desire to buy a house outright in my hometown. Honestly, I don’t even think buying a house in cash is really that good of a financial move. But the point is that I could. I have made choices that make this possible. That is okay if others make different choices. But I should not allow these projections to limit what I view as possible.

29. Collect Material Material Possessions

This is advice is coming from a man who has loved collecting stuff since he was a child. Baseball cards, beanie babies, pencils, comic books, travel knick knacks, etc. But collecting and hyper focusing on material possessions is for poor people. The people collecting designer clothes and luxury watches on TikTok are not real. These are industries that are so clever at selling junk to people that they have infiltrated social media in a way that appears organic. It is all marketing.

Breaking Free From Consumerism

Why do you think Kevin Rose (the guy that founded the website Digg back in the early days of the internet) now makes a killing running a luxury watch website? Seriously, the dude’s website Hodinkee makes a hundred million a year off this stuff. Because it is super profitable. These products are marked up through the roof. Yes, it is disguised in the language of high quality, blah, blah, blah. It is all a scam. Unless you are super wealthy (to the point that money really doesn’t matter) you are stupid to be buying this stuff. It will leave you poor.

30. Live With Fear

In many cases bad financial decisions come from a place of fear. People avoid investing because sometimes the market goes down. They stay in a job they hate because at least they get a consistent paycheck. Maybe they view themselves as too old to go back to school or start a new career? Fearful thinking compounds and leaves people in a place where their life is guaranteed to not get any better. Don’t live like this. These states of mind will lead to dumb financial decisions.

It is never too late to change your situation. There is the old cliché that “luck is where preparation meets opportunity”. This holds true for money as well. Wealth is not a zero sum game.

31. Resentment Of Money And Wealth

You may hear people say things like “money is the root of all evil”. This is nonsense. This is the type of mindset that will keep you poor. Money is tool. Money is something useful to control your life. Obsessing on wealth is definitely not healthy. People who live this way will never get enough. The number will never be big enough.

The right approach is to value money and understand the ways is can help you live a better live. You don’t have to work a job you hate if you have enough money. You can live wherever you want. You can focus on spending time doing the things you want.

There is no need to resent other people. You should respect people that worked hard to build wealth and leave it at that. Yes, some people inherit a ton of money and will probably waste it. Who cares? The important thing is that you identify a balanced and healthy relationship with wealth and material possessions that works for you.

32. Think You Know Everything

Honestly, I can’t stand people who think they know everything. They are seriously the least interesting people to be around. There is always something new to learn. There is always another perspective to get. I love when someone else approaches a problem that gets me to see things in totally new way. Be curious. Be open minded. How could you possible know everything there is to know about personal finance?

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