Why is it that people don't become wealthy? In a country like India, which has the right set of demographics, opportunities for business can be found in everyday life. Ours is a country, where a tea boy can rise to become the prime minister. Certainly, opportunities abound for those who set their eyes on achieving something big in their life. The question then arises is; Why there are so many people who are not rich, even though they desire to be? There are a majority of people who could have been much wealthier than what they are today. Why are there such a limited number of people retiring financially independent? Here are a few factors which can be the reasons as to why many haven't yet achieved the bank balances that they long for.
SELF DOUBT :
Let us begin by the one thing that kills most dreams than challenges do. It is self doubt. Most of us do not believe that we can be wealthy. An average middle class family person mostly would not be friends with someone who is 'really rich'. The social circle of such a person is limited to people, who share more-or-less his own financial background. If someone has grown up in a middle class setup and has his personality molded in this fashion, it is less likely that he would 'believe' that he can be rich. On the other side, a person who has grown up in a wealthy family, is more likely to become wealthy as he believes that he can be wealthy too.
MAKE A DECISION :
The second reason that people are not wealthy is that they do not decide to be wealthy. Yes, it is true in spite of many of us yearning to be wealthy. Reading motivational books, listening to success stories or being friends with the wealthy can't make you wealthy if you do not decide to be rich. And without necessary actions, results will not follow. The primary reason many do not become wealthy is that they don't decide to be successful ‑financially. They avoid even taking the basic steps of wealth creation like saving, investing, etc. at the right time. To become wealthy, you have to believe, decide and take the ‑first step and every step thereafter, until you have become wealthy.
PROCRASTINATION :
There is no better poison than procrastination in your ‑financial life. People always have a good reason to not do something which has to be done to achieve ‑financial independence. It is always the wrong maths, wrong doubts, wrong concerns or wrong market, to be blamed while procrastinating your investment/business decisions. One does not want to take risks or give up security. As a result, most keep putting o decisions until it is too late. Being someone who procrastinates or having too many delayed decisions in life, ultimately ensures that you are not wealthy.
LIVING IN THE MOMENT :
Another big reason why people are not wealthy is because of their inability to delay grati‑cation. They fail to procrastinate purchase decisions that give them instant grati‑cation, pleasure, leisure and comfort. Majority of us have an irresistible temptation to spend on everything; gadgets, clothings, holidays, cars, holiday homes, etc. Most of us have read about budgeting but have never practiced in real life. Unless we control our temptations and spendings and follow a budget in our lives, we cannot achieve ‑financial independence. As W. Clement Stone rightly said, “If you cannot save money, the seeds of greatness are not in you.”
TAKE THE LONG VIEW :
Most of us are devoid of the bigger vision in our lives. We lack the right time perspective to look at things. The amount we spend in planning our day to day activities and smaller decisions nowhere compares to the time we spend in identifying and planning for our goals in life. We do not project ourselves into future and decide what to do or not to do in the present. An example of long term planning is starting to save for your child's education right after his birth, irrespective of the fact that the saving will not be utilized until the next 16-18 years. Another good example is saving for your retirement well before you hit the age of 30.
STAYING IGNORANT :
In today's world knowledge has become a commodity as it is freely available. However, what is valuable today is your ability to put that knowledge into right use. Unfortunately, most of us even lack the basic knowledge in areas of personal ‑finance. Most of us are unaware of the asset classes, investment avenues and basic principles of savings and investment. In a world where knowledge is freely available, have we all put an effort to learn and understand how to save and invest? I am sure most of us have not put in any special effort and instead relied on our friends and family alone.
MAKING BAD DECISIONS :
There are many of us who have made ‑financial decisions in absence of the right knowledge. Without proper awareness and disclosures, there are countless people who have fallen prey to fake money making schemes and promises. We tend to follow our friends and families in making the same mistakes that they have made on the assumption that they are right, or worse, it will be a shared fate if wrong. Quite often, the outcomes are nothing proud to speak of. As a safety net, we should all resolve to never put in even a rupee in unregulated plans that are from doubtful promoters.
NOT PROTECTED :
There is one big reason why some of us fall into debt traps or lose all our existing wealth. A common situation in all such cases is that the person, family or business is not adequately protected. Any unforeseen, unwelcome event can potentially wipe out all your wealth and dreams. It is a losing game if we do not get ourselves, our families and our professional /business assets protected. Our ‑financial well-being and dreams are just too big to put on the table, just to save the costs of protection.
ALL EGGS IN ONE BASKET :
What do we find common among all the rich people? A likely answer to that question is income from multiple sources. Most of the wealthy people tend to spread their risks and also put their stakes in multiple opportunities. This is done by engaging themselves and having ‑financial interests in multiple income sources and/or businesses. But it need not only be limited to businesses. Aiming to generate and then reinvesting the income from investments is also a great way to build wealth. Most of us who are not wealthy are dependent on a single salary or business income.
FIND A MENTOR :
Finding a guide or a mentor or the right ‑financial planner /advisor can do wonders for our financial well-being. In a life where we may not have any close role models who are wealthy, having someone to guide our financial decisions can be wondrous. A mentor will be someone who is trustworthy, knowledgeable and genuinely concerned about your ‑financial progress. The most valuable role of your mentor will be to manage your emotions and make sure that you are not biased or emotionally driven to take wrong ‑financial decisions.
CONCLUSION :
While it is not in our hands to decide fate and destiny, it is definitely in our hands to influence it in ‑financial terms. Be it savings, investments or protection, it is all well within the realms of reality, that we take the right, informed decisions. The story of being wealthy begins by having the right self belief, a strong intent, backed with actions and decisions and sometimes guided by the right people. An important part of being wealthy is also about managing our emotions and our habits where we do not procrastinate our ‑financial decisions and keep control on our spendings. None of the reasons why we are not wealthy are beyond our control. What is now required is that we practice what we have read.
