10 (More) Reasons You're Not Rich

Many people assume they aren't rich because they don't earn enough money. If I only earned a little more, I could save and invest better, they say.

The problem with that theory is they were probably making exactly the same argument before their last several raises. Becoming a millionaire has less to do with how much you make, it's how you treat money in your daily life.

The list of reasons you may not be rich doesn't end at 10. Caring what your neighbors think, not being patient, having bad habits, not having goals, not being prepared, trying to make a quick buck, relying on others to handle your money, investing in things you don't understand, being financially afraid and ignoring your finances.

Here are 10 more possible reasons you aren't rich:

1) You care what your car looks like: A car is a means of transportation to get from one place to another, but many people don't view it that way. Instead, they consider it a reflection of themselves and spend money every two years or so to impress others instead of driving the car for its entire useful life and investing the money saved.

2) You feel entitlement: If you believe you deserve to live a certain lifestyle, have certain things and spend a certain amount before you have earned to live that way, you will have to borrow money. That large chunk of debt will keep you from building wealth.

3) You lack diversification: There is a reason one of the oldest pieces of financial advice is to not keep all your eggs in a single basket. Having a diversified investment portfolio makes it much less likely that wealth will suddenly disappear.

4) You started too late: The magic of compound interest works best over long periods of time. If you find you're always saying there will be time to save and invest in a couple more years, you'll wake up one day to find retirement is just around the corner and there is still nothing in your retirement account.

5) You don't do what you enjoy: While your job doesn't necessarily need to be your dream job, you need to enjoy it. If you choose a job you don't like just for the money, you'll likely spend all that extra cash trying to relieve the stress of doing work you hate.

6) You don't like to learn: You may have assumed that once you graduated from college, there was no need to study or learn. That attitude might be enough to get you your first job or keep you employed, but it will never make you rich. A willingness to learn to improve your career and finances are essential if you want to eventually become wealthy.

7) You buy things you don't use: Take a look around your house, in the closets, basement, attic and garage and see if there are a lot of things you haven't used in the past year. If there are, chances are that all those things you purchased were wasted money that could have been used to increase your net worth.

8) You don't understand value: You buy things for any number of reasons besides the value that the purchase brings to you. This is not limited to those who feel the need to buy the most expensive items, but can also apply to those who always purchase the cheapest goods. Rarely are either the best value, and it's only when you learn to purchase good value that you have money left over to invest for your future.

9) Your house is too big: When you buy a house that is bigger than you can afford or need, you end up spending extra money on longer debt payments, increased taxes, higher upkeep and more things to fill it. Some people will try to argue that the increased value of the house makes it a good investment, but the truth is that unless you are willing to downgrade your living standards, which most people are not, it will never be a liquid asset or money that you can ever use and enjoy.

10) You fail to take advantage of opportunities: There has probably been more than one occasion where you heard about someone who has made it big and thought to yourself, "I could have thought of that." There are plenty of opportunities if you have the will and determination to keep your eyes open.

The Ins and Outs of Debt Consolidation

My family and I found ourselves living the American dream. We both had great incomes, built a house, bought cars, bought toys, but what we didn't realize is that the ease in which we obtained credit was creating a nightmare for my future. We deserved it all right? Worked hard, played hard. It was nothing to go shopping and rack up a $500.00 bill for trivial stuff that wasn't necessary. It never concerned me, I was making my payments and the credit offers kept rolling in. Things happened and my life changed dramatically, leaving me alone with debt that two of us made, three children to feed and job changes that further crippled my ability to pay. Was I stupid? I don't think so, I was simply living with blinders on. It was a learning experience that I hope to never see anyone have to endure. So let me open your eyes.

Debt is a trap. Being aware of it and committed to eliminating it is the beginning to a life you deserve, free of debt. The majority of companies that offer debt consolidation are in existence because they make money. They have to, in order to cover overhead and keep their investors happy. Where does that money come from? You! Origination fees, points, property surveys and interest are all revenue generators for these companies.
While seeking help with debt, it is imperative that you ensure the company is reputable. Ask many questions and do not be timid. I do not care how bad your situation is, you still deserve to be treated with respect. If the information doesn't seem right, ask more questions and do research regarding the specific company. Fees vary from each company and you could find yourself in a situation that you are paying out enormous fees for their services which could and should be applied toward your debt.

So here you are, in a situation where you have a large number of creditors with payments due at different times and normal life demands on your shoulders, this can be overwhelming. Offers for debt consolidation loans come to us everyday that seem very attractive. They advertise reducing payments, reducing interest, stop creditors calling, and taking the stress off of your bill paying. Increasing your awareness so that if you enter into a debt consolidation loan, you are better prepared to optimize the outcome.

First of all, if you have already performed a debt consolidation, you need to focus on two primary goals. Paying off the loan and not increasing your debt. Yes, you probably are reaping rewards from the decrease in payments but take into consideration that your debt repayment has likely been spread out over a longer period of time. The immediate perception of benefit of the lower interest rate and lower payment creates a false sense of relief when in all actuality since the majority of people are unable to discipline themselves to make more than the minimum payment, they are likely incurring more interest debt than if they had worked hard to pay down on the existing bills.

Consolidation loans often require collateral. If you are a home owner, this will be the first choice as hopefully it is your largest asset and you have positive equity in it.

This type of loan makes you more attractive to creditors as the current debt is secured by the asset so they will immediately begin to offer more unsecured credit generally in the form of credit cards. The repayment period is usually five or more years for a consolidation loan, which may seem attractive because you are able to see an end to the debt as opposed to credit cards which as a revolving account does not appear to end. The interest rates offered are often lower because it is secured by your collateral which is wonderful as long as you focus on those two goals. Paying off the loan early and not incurring additional unsecured debt. Here is the viscous cycle that often occurs.

The consolidation loan goes through and your payments decrease. Whew! Now you may even be committed to paying the debt off early and not incurring more bills but over time people become complacent with every resolution and often seek the path of least resistance. I would bet that the credit cards that you consolidated a while ago are still in your wallet ready to go. Then your car breaks down and it is going to cost $1,000.00. It is easier to swipe the card and move on with life than it is to sacrifice your Friday night dinner and a movie to contribute toward your repair, so on the card it goes to be paid off over time. Thus setting yourself up for another snowball of debt.

What happens the next time? You may find yourself a few years down the road with the same amount of debt hanging over your head, plus the consolidation loan that ate up your available equity and even less avenues to find relief of the pressure from the creditors. In order to get the best outcome of your debt consolidation you must commit to eliminating your open credit. If you do not feel comfortable getting rid of all of your unsecured lines of credit, eliminate those that have higher interest rates and annual fees. The less you have available to you the more conscious your purchases will become.

Food for Thought: Being an educated consumer will help you on the road to debt elimination and a much happier stress free lifestyle. Work hard and revisit your financial goals often to remain focused. Your initial sacrifices will pay off over time. Don't wait until there appears to be no light at the end of the tunnel start making changes and educated decisions now, you deserve it.

The author Erine Adams is excited to bring trusted information, product reviews, and anything relevant to credit repair, building wealth, and the goal of living debt free. Visit http://www.debtisatrap.com/ and http://www.creditsecretsbible2008.com/ for the best, current, straight up information available regarding personal finance.

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