17 Mistakes that don't let us become rich

It is very hard to make money, spend money and invest profitably. Here are common mistakes that prevent people from achieving financial success.

1. Signing documents without reading them.

It seems funny, but many do not read credit and other contracts, and then it turns out that they are subject to high fines, commissions, or they include less services than the signatories assumed. This applies to the acquisition of insurance, borrowing and even registration of bank cards.

2. Not planning a family budget

You must clearly know how much you earn, how much you spend and what you plan to purchase in the future. The budget can be maintained in a notebook, application or in Excel.

3. Not saving for retirement

In 20 years, few people think about it, but after 30 it is definitely worth starting to save money for retirement. If this is not done, then you will have to rely on the state, and this is risky.

4. Not having airbags

This is a special personal fund, which should contain an amount equivalent to 3-6 amounts of your monthly expenses. Money from there can only be used in an emergency - for example, in case of illness. Otherwise, there is a risk that you will have to take out a Loan in an emergency, and then pay interest on it.

5. Not investing or studying financial instruments.

Earned money must be invested in order to generate income. At the initial stage, you can earn on deposits. With the growth of financial literacy, you can switch to other tools for making a profit:

• investment in securities;
• business investments;
• investments in real estate, etc.

6. Not issueing tax deductions

The state can return you 13% of the money that you:

• paid for the purchase of real estate , education and treatment  or life insurance ;
• transferred to charity (13% of any amount);
• made to an individual investment account .

It should be borne in mind that they can only get those who pay taxes at a rate of 13%. To refuse this money is unwise.

7. Buying unnecessary staff on sales

Stores constantly arrange sales. There is a risk to buy a thing simply because of the low price - “3 for the price of 2” or something with a 70% discount. But it's not necessary that you then will use it. The “24 hours” rule will help you to cope: just wait a day before buying a thing and evaluate how much you really need it. Do not give in to emotions.

8. Being naive

9. Not being able to scale

It's about seeing big in small. For example, if you spend $300 for lunch every day, then $3,600 a year goes up. If you pay interest on the loan at $50 per month, over the year the overpayment will be $600. Try to scale any expenses and incomes.

10. Not refinancing loans

Rates on loans are growing, then decreasing. If you have taken an expensive loan, and after some time the option appeared cheaper, then issue it and pay off the old one in this way. This is called refinancing. It is especially important with significant amounts of loans, for example in the case of a mortgage. You can save hundreds dollars.

11. Generally living on credit

Apply for a loan only in two cases: when you can earn on it or when you really have no other choice. If you can't cope with one loan - do not borrow again, it will only get worse.

If there are no ways out except borrowing money, be responsible and careful. Compare all your options at first and only then apply.

12. Having only one source of income.

Salary is the most popular source of income for most people. But we must try to make it not the only one. Ideally, it is worth having several sources of income in different areas. This will be insurance in a crisis situation.

13. Investing in only one asset.

Investing in one asset is extremely risky. For example, if all the money is spent to buy shares of one company, you are likely to lose a significant part of the investment. If you buy shares of 10 companies in different industries, then such a business will have a lower drawdown probability.

14. Selling during crisis

In a crisis, the value of securities falls. New investors often panic and sell off assets at a loss. This is used by experienced players who buy promising low-cost stocks.

15. Keeping to old plans.

Life is changing, and from time to time you need to adjust the financial plan, current budget, investment portfolio. If you do not do this, then you risk missing out on new opportunities and benefits.

16. Helping relatives too much. 

It is important to help relatives if they have problems. But when they can, but do not want to work and require financial support - this looks like arrogance.

17. Not making money on unnecessary things.

Almost everyone has a lot of things that they do not need. At least once a year, arrange a general cleaning and sale of such items.