5 Money Beliefs Keeping You Stuck

🔍 Deep Dive: 5 Money Beliefs Keeping You Stuck

1️⃣ I can’t invest until I have money.

If you say this, you’re ignoring the fact that investing small amounts is how regular people build wealth over time.

You don’t need thousands to start. Many brokerages accept $1 minimums, and there are apps that invest your spare change.

By waiting for “enough” money, you miss years of compound growth that can build into substantial wealth.

2️⃣ Rich people are just lucky.

Sure, there’s an element of luck in building extreme wealth. And for some people, the riches were handed to them.

But that isn’t always the case.

Thinking everyone else’s wealth was built solely on luck leaves you feeling powerless about it yourself. It also gives you an excuse to do nothing to build wealth.

Most millionaires built their wealth through consistent saving, investing, and smart financial decisions over decades.

This belief will keep you waiting for luck to strike rather than taking action to create wealth for yourself.

3️⃣ Budgeting is for poor people.

This belief confuses tracking money with lacking money, when the opposite is true.

You don’t build wealth flying by the seat of your pants. You build it by being intentional about where you’re spending.

Avoiding budgets because they seem “beneath you” is keeping your money from being used intentionally to build wealth.

4️⃣ I’m too young/old to start.

Time is your greatest wealth-building asset, and this belief wastes it regardless of your age.

Young people think they have forever to start (I thought this back in my 20s) and miss out on compound interest.

Older people think it’s too late, ignoring that even 10-15 years of investing can dramatically improve your retirement.

5️⃣ The market is too risky.

This belief confuses short-term volatility with long-term risk.

Sure, trading stocks daily (called day trading) is extremely risky because of frequent market fluctuations.

But when investing for the long-term, these daily market fluctuations aren’t so important. Over the last 30 years, the market has returned 9.33%.

This means that despite any daily ups and downs, your investments could still have grown (roughly) 9.33%. If you let your cash sit in a bank account, it would’ve lost value due to inflation.

Don’t let your fear of temporary losses prevent you from having a secure, financially stable retirement.

Put It Into Practice

Which of these money beliefs have you fallen prey to? Take one of the following actions based on the belief you hold:

1. I can’t invest until I have money → Invest your spare change or set a small budget to invest each month.

2. Rich people are just lucky → What can you do today, that involves action rather than luck, to improve your finances?

3. Budgeting is for poor people → Create a budget.

4. I’m too young/old to start → Start investing, regardless of age.

5. The market is too risky → Explore index funds and start investing.

💵 Budget Breakdown: Saving to Have a Child

This week’s WWYD comes from a recent Yahoo article.

The TLDR: While there’s no universal amount a family should have before having a kid, experts say a practical guideline is 3-6 months of expenses in an emergency fund, plus $20-30k for child-related costs.

Example: If your monthly expenses were $4,000, you’d need $12k-$24k in your emergency fund + $20-30k for child-related costs. That’s $32k to $54k…in cash…in your savings account…prior to having a child.

Here are my thoughts: Does this feel unrealistic to anyone else? It’s incredibly financially responsible to prepare this much before having a child, but this is quite the feat for the average person.

Let’s assume a couple has the median household income of $78,000. They’re saving $3,432 per year, which is the current average savings rate in the US. It would take 9 to 15 years to save the experts’ recommendation.

🔗 Quick Links

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