Do you find that your money is always stagnant, and no matter how hard you try, you never seem to be building wealth?
This feeling is exhausting and can often leave you wondering what it is that you’re doing wrong. For some, it may be that by the time your money starts rolling in it suddenly makes its way out again to pay for your living expenses. Then, by the time you review what you’re left with you’re back to square one.
Below, we explore some of the common reasons why you may have trouble building wealth. Additionally, we’ll share some strategies that could make you more money; resurrecting your finances from the dead.
1. You haven’t set any financial goals
We say this time and again, the key to building wealth is setting financial goals. When we create goals, we give ourselves purpose, drive, and motivation to achieve what we need to.
The key to setting attainable financial goals is by following the SMART formula. That is, being Specific, Measurable, Attainable, Relevant and Time Bound. Additionally, you should be creating goals that relate to your finances from short-, medium-, and long-term perspectives. For more information on financial goal setting, click here to see one of our previous articles that explores this in detail.
Creating goals allow you to determine necessary and unnecessary spending habits. This can support you in creating budgets and becoming more consciously aware of your situation. Furthermore, leading to disciplined financial related behaviours.
2. Your budget isn’t working for you
It could be possible that you don’t have a budget or at least one that works for you.
After you’ve established your goals, it’s imperative that you create a budget. A budget will help you determine your incomings and expenses. When budgeting you should determine the specifics of your expenses. Expenses should cover things that are essential and discretionary. The image below breaks down the types of expenses you may incur in your everyday life.
When you break down your spending habits into these two categorise you create more financial awareness, and you can then make logical decisions around where you can disperse your money accordingly.
3. You’re paying more money in fees and repayments than necessary
It’s hard to make more money for yourself and sustain it when you’re paying more than you need to in repayments. If you’re currently repaying a home loan, it could be possible that your're paying more than you need to.
People that don’t regularly review their lending put themselves at risk of paying more than necessary in home loan repayments. By consulting a finance specialist, who have access to a range of lenders, you could be presented with a more suitable offering and reduce your repayments.
4. You’re not consulting the right people
Following reason three, there are a few people who can help you resurrect your dead money.
These people include finance specialists/ mortgage brokers and financial planners. Finance specialists are responsible for all things relating to loans and sourcing you the most suitable market offerings from a wide range of lenders.
Additionally, financial planners help you establish a solid financial plan. These professionals support you with listing your immediate priorities to make them come into fruition by expanding on your budget.
5. You’re not investing (specifically, making money from real estate)
A great strategy for accumulating wealth and making more money is by making money through real estate. A positively geared property that generates money from day one is a great way to produce an additional income and grow your net worth.
Investing your wealth into real estate can also allow you to leverage equity and purchase more property. Over a number of years an original investment in real estate can produce a generous, well-diversified property portfolio and substantially grow your savings.
We explore this topic in our eBook 'Building Wealth Through Property.' Check it out here for FREE!