Becoming wealthy is about more than investing and picking stocks. It's about your mindset and avoiding common misconceptions. Here are 10 dangerous lies that can destroy your chances at building wealth – particularly if you’re a beginning investor, writes Gav Blaxberg, CEO of Wolf Financial.
1. “I can start later.” People who say that end up letting 10 years go by without doing anything. It costs $500/month to become a millionaire in 30 years. But it costs over $2,500/month to do it in 15. Don't fall into the "start-later" trap.
2. “Investing is what rich people do.” True. Rich people do invest. So, why don't you? There's no barrier to entry to investing. The stock market is the most accessible way for people to build wealth. It doesn’t matter if you start with $1 or $10M.
3. “Once I have $X, I’ll be happy.” A goal post that never stops moving is your wealth’s greatest enemy. The happiest people on Earth are the ones with "enough." Figure out your definition of enough and stick to it.
4. “I can beat the market.” People have been trying for years. I’m not saying don’t try, it’s just unlikely you will. Trying is fine if you love the process (this is what I do). But trying to beat the market because you want to get rich quick won’t work. It rarely does.
5. “I don’t have time to learn how to invest.” This is more like saying you don’t have enough motivation. It doesn’t take much time to learn. Nowadays you can learn everything you need to know through your phone in your spare time. The accessibility is there. The commitment isn’t.
6. "I'll just work harder and longer to make more money." Hard work is essential to success, don't get me wrong. But eventually, you have to learn to work "smart." Without working hard first, you'll never learn how to work smart. Work smarter AND harder.
7. "I don't need a financial plan; I'll figure it out as I go." Even the most successful daytraders have long-term financial plans in place. You need to be intentional about increasing your net worth and putting a solid plan in place. People don't build wealth by accident.
8. "I don't make enough to invest." You don’t need a lot of money to invest. You can start with $1, $10, or $100. How much you start with doesn’t matter. What matters is you start in the first place.
9. “Investing is risky.” The truth is…NOT investing is riskier. When you don’t invest, you may need to work until you die, end up with no assets to pass down, and struggle with job loss along the way. Investing solves each of those problems.
10. "I'll just rely on my job for financial security." One of my favorite definitions of a job is "just over broke." If you want to build wealth, you need to build multiple streams of income and diversify your assets. The average millionaire has seven streams of income.
