Now, I know they say that money can’t buy you happiness, but not having money can sure bring you stress, anxiety, and sleepless nights.
So, here are 10 harsh truths about money that most people don’t find out until later in life. I for sure didn’t find out until later in life. So, if you’re in your 20s, your 30s, even your 40s. This blogpost could save you years, maybe decades of financial mistakes.
We’re pulling back the curtain on money and on everything we’re not taught about in school, but everybody seems to have to learn the hard way.
Now, numbers 1 to nine are going to make a major impact on your financial health. They did for me, but number 10 is a big hitter.
1. Earning More Money Won’t Fix Your Money Problem
Most people think if they earn an extra 10 or $15,000 a year, they will solve all their money issues. But let me tell you, it won’t, because of something called lifestyle inflation.
If you can’t manage $40,000 and live on that, there’s no way that $80,000 is going to save your problems. You’re going to spend that extra money on a new car, a new house, renovations.
It all comes down to money management. You need to live below your means. You need to manage what you have and so you know getting extra income, an extra 10 or $15,000. It won’t solve your problems.
As my business took off and I earned more money, I managed to spend it all as a consumer. I got a bigger car. I moved to a bigger house. I took multiple vacations. I didn’t manage my money. This was the big mistake I made.
If you can manage your money and live below your means, as your income increases, you can put that to good use.
As your income increases over time, instead of spending it like a consumer, spending it on a new car or trips away, you can invest the money. You can have complete money management over your money. It’s a skill. It’s not an income level.
Don’t make the same mistakes I made as a consumer. Don’t let lifestyle inflation take away all your money. It’s what happens to most people and you can avoid it with good money management.
2. No One Is Coming To Save You
If you’re waiting for that lottery win or that perfect job or that rich uncle, it’s financial suicide.
You’re eventually going to come to the same conclusion as I did, that your financial future is your responsibility.
Now, it sounds harsh, but nobody’s going to come to save us. We need to manage our financial future ourselves and get prepared instead of waiting for that perfect time, that perfect job, or that perfect opportunity. Stop wasting time. Get educated about money. Get control of your finances and build yourself a financial future that you can work towards.
By taking control of your financial situation and improving your financial health, you can empower yourself to do more and get yourself financially healthy.
When I realized nobody was going to come to save me and that society wanted me to continue being a consumer. I was able to educate myself and break free. And now I am working towards financial freedom. And I’ve never felt more financially secure or excited about the future. It’s just a decision and you can do that today. Take your first big step.
3. Saving Alone Won’t Make You Rich
Now, I’m sure you were brought up to save your money. At least 10% of your wages.
The thing is, saving money doesn’t grow money. In fact, with inflation, saving money actually diminishes money. It loses its value over time.
We have to learn to start investing. Now, up until my mid-life, when I changed my mindset, I thought investing was all about retirement, and I had plenty of time for that in the future.
But investing is all about time. The sooner you start doing it, the more wealthy you’ll become. It all comes down to compound interest and using time as an investment tool will always trump money.
If you start early enough, you just need small amounts. The later you leave it, the larger amounts of money you’ll need to invest to get to the same point.
Ultimately, saving money at best is storing it. You need to invest to grow wealth. And you can only do that with compound interest over time. The sooner you start, the more you’ll get.
Get online and use a compound interest calculator and have a play with that. It really opened my eyes and it will do the same for you.
4. Time Is More Valuable Than Money
We can get money back. We can even grow money in the future, but we can never get back our time.
The longer you delay in saving, investing, and even learning about money, the harder it gets. Saving $100 a month at 25 beats saving $1,000 a month at 45. It’s compound interest. And the longer you delay, the less you’re going to make.
Every single year you delay is another year that compound interest isn’t working for you and it’s the only way to build your wealth.
5. Debt Is A Dream Killer
It doesn’t matter how much money you earn. If a portion of that is going towards consumer credit, it’s a dream killer.
Consumer debt is the biggest problem we’re all facing today in the financial world. And it’s the biggest killer of your dreams.
Don’t delay paying off your consumer credit. Don’t kick the can down the road. Start paying it off today. Even small amounts. Tackle it. Tackle it aggressively as you can.
The faster you remove that consumer credit and pay down your high interest debt, the faster you’re going to realize things are much easier.
Holding and servicing consumer credit could be your biggest problem. And you may be shocked just how much interest you’re paying each month.
6. Your Friends Are Probably Faking It
Social media flexes, vacations, nice cars. Don’t compare yourself to what you see on Tik Tok.
In this new modern swiping digital world, it’s so easy to compare yourself to all the bright lights and the flash cars that you see on Tik Tok.
The thing is, these people aren’t rich. They’re drowning in debt. They’re not acting like true wealthy people. There’s too much flexing going on. And it’s there to make you jealous and to feel like you’re losing out.
Don’t let their illusion and they’re flash flexing. Bankrupt your reality. Focus on building wealth.
7. You Can’t Budget If You Don’t Track It
How do you know where all your money is going each month? Most people think they’re spending $200 and easing out. It could be $500.
If you’re not tracking your money, you have no idea what you have and you have no idea where to tell it where to go.
By tracking your money each month, you can give every single one of your dollars a job to do. And you’re going to be shocked just how much you can cover.
Tracking your money each month doesn’t have to be boring. It can be exciting. You’re planning to get your financial future. Do it for 30 days. I’m sure you’ll be shocked where your money is going.
Now, a little bonus tip. It’s going to be uncomfortable, but it will be an eye opener and it will set you on the right path. I promise you.
8. Passive Income Isn’t Passive At First
Now, you don’t have to go far on the internet to find somebody’s telling you you can get rich very quickly or at least quicker than most other people. We don’t need to believe this. Passive income takes time.
Now, I’m sure we all love the idea of making money while we sleep. In fact, that’s a true measure of being wealthy.
But building a portfolio of stock that pays you a dividend income takes time and consistency. The work is all upfront. But once the work is done, you’ll be reaping the rewards for years to come.
It takes effort, planning, and patience, and believe me, a lot of hard work. But if you plant the seeds, if you put the work in, the fruit will come.
Don’t fall for these overnight success lives. If it sounds too good to be true, it probably is.
9. You’re One Emergency Away From A Financial Disaster
Now, if you’re not prepared, if you don’t have an emergency fund, you need to get one. Even just $1,000. Build up to that. It could be that car repair, some dental work, even a job loss.
Life won’t prepare you. It won’t tell you in advance. But having that one emergency bill that comes up can put you back for months.
Start building yourself up to $1,000 emergency fund. That $1,000 will save you from most small emergencies. And those small emergencies come around with an annoying regularity.
Once that $1,000 emergency fund is secure, start building yourself for a full month supply and then go from there.
You’re going to find in this increasingly uncertain world that emergencies come up all the time. But being prepared, they won’t financially crush you.
Most people don’t have an emergency fund and they’re living paycheck to paycheck. You need to fix that.
10. Money Magnifies Who You Are
Okay, this is the big one. This is the one I discovered when I actually started building wealth. If you tend to be generous, money makes you generous. But if you tend to be reckless with money, money will amplify that, too.
So what I learned along the way instead of trying to build wealth, I actually worked on our mindset and tried to become the person I wanted to be with wealth.
So for example, by tracking money, by budgeting our money, we learned the value of money instead of spending it on instant gratification.
So by learning money management and building wealth, we learn to become humble because when we are wealthy, we don’t want to be flash.
In this journey of building wealth, it becomes apparent it’s not just about making money. It’s actually becoming the person who you want to be. It’s changing your mindset and having a much more positive outlook on life and being grateful for what we have, not just what we want.
After all, I certainly don’t want to be flexing on TikTok with my flash new watch, a new car, and a new house.
And it’s become important to be the best person I can be and to pass those lessons down to my kids. It’s not just about building wealth, but also about being the best you can be.
Final Words On These Harsh Truths:
Now, the problem is most people don’t come across these harsh truths and until they are knee-deep in problems.
like myself, they could be in their mid-life, knee-deep in debt, and living paycheck to paycheck.
So, if like me, you’re in a financial spot and you need to tackle the issues, then face them head on and use these principles to tackle them.
If you haven’t got an emergency fund, start building one today. If you haven’t started investing, start today. Even if it’s just $20. If you don’t budget your money, if you don’t track your money, do it today.
The thing is, if you don’t challenge your old habits, nothing will change. And you’re going to find 12 months will go past and you’re in the same position.
I know this because it happened to me. It wasn’t until my mid-life that I started to challenge my old habits and make a mindset change.
And at that point, I had missed 10 or 15 years of compound interest, growing my wealth. Now, being a grateful person, I am grateful that I’m doing it now. And I’m building financial freedom for me and my family, but I could have started 10 years ago, even 15 years ago. Where would I be today?
Take the opportunity to make the change. I promise you, it will be worth it. It will be hard work. There’s going to be blood, sweat, and tears, but it will be worth it.
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