5 Signs You Will Never Be Rich

When is the last time that you did a financial life check?

Whether you live paycheck to paycheck or earn a sizeable salary, your financial habits may be creating obstacles on your path to building sustainable wealth.

The path to prosperity is not driven by how much you earn, but rather the smart financial decisions that help you invest in your future.

Here are 5 ways that you may be working against your financial interest and creating a roadblock to financial freedom.

1. You don’t maximize your retirement benefits

If you are not maximizing your retirement benefits each year, then you are missing out on your financial future.

Pay yourself first.

When you pay yourself first, you contribute the maximum amount each year to your 401(k), or your IRA. If you are self-employed, then open a SEP IRA.

But what if you have other debt obligations (like student loans or a mortgage) and cannot contribute the maximum amount each year to your retirement plan?

You don’t have to choose between saving for retirement and paying off debt. Do both.

At a minimum, contribute enough to your 401(k) to receive an employer match, and always make your required minimum monthly debt payment.

You should apply any remaining funds to whichever is higher – the interest rate on your debt or the expected investment return in your retirement account.

2. You don’t have an emergency fund

Starting an emergency savings fund won’t make you rich, but it will help protect you in a time of unexpected need.

You never know when an emergency will strike. Whether it’s an unforeseen medical expense, home repair or unemployment, don’t get caught off guard.

Be proactive. Build a financial foundation with at least six to nine months (or more) of cash to cover expenses.

Keep your emergency fund cash in its own bank account so it does not become co-mingled with cash for daily spending needs.

3. You live beyond your means

As Warren Buffett said, “Do not save what is left after spending, but spend what is left after saving.”

Living beyond your means is the fastest way to never achieve financial freedom.

Build an emergency fund, save for retirement and pay down debt. Invest in yourself first.

If you want to spend money you don’t have, it’s a recipe to deplete your savings and incur unnecessary debt.

4. You have too much debt

If you can’t pay off your full credit card balance each month, then you shouldn’t have a credit card.

The interest rate on your credit card is likely higher than the average investment return in the stock market. If you have credit card debt, that lost opportunity cost can significantly hurt your bottom line.

If you have existing credit card debt, take this action step to get out of debt and save money.

You might be able to obtain a personal loan at a lower interest rate than your existing credit card interest rate.

For example, if you have $10,000 of credit card debt at 15% interest and can obtain a personal loan at 6% interest (depending on your credit profile and other factors), you can consolidate your credit card debt and potentially cut your interest payments by more than 50%.

5. You haven’t refinanced your student loans

Refinancing your student loans allows you to consolidate your existing private and federal student loans into a new, single student loan with a lower interest rate.

The result is lower monthly payments, which frees up extra money to repay more student loan debt, save or invest.

Depending on your degree, loan balance and interest rate, you could save up to $30,000 with student loan refinancing.

What if you can’t get approved to refinance your student loans?

Make financial changes. If you can’t get approved now, you can still get approved in the future.

Improve your credit score by becoming more financially responsible. Create extra income with a side hustle. Pay down credit card debt, or refinance with a personal loan. You can check out our top private lenders for personal loans.

If you implement these 5 changes, you can be on a clearer path to achieve sustainable wealth.


Best Credit Card Consolidation Loans For 2018

Lender
Rates (APR)
Minimum Credit Score

Overview

Minimum Loan Amount:$5,000
Maximum Loan Amount:$100,000
Loan Terms:3, 5, 7 years
Minimum Income:$50,000

Details

Origination Fees:No
Late Fees:No
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$2,000
Maximum Loan Amount:$50,000
Loan Terms:1, 2, 3 years
Minimum Income:None

Details

Origination Fees:No
Late Fees:No
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$1,000
Maximum Loan Amount:$45,000
Loan Terms:3, 4, 5 years
Minimum Income:No

Details

Origination Fees:No
Late Fees:No
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$1,000
Maximum Loan Amount:$50,000
Loan Terms:3, 5 years
Minimum Income:$12,000

Details

Origination Fees:0% - 8%
Late Fees:Greater of (a) 5% of payment due or (b) $15
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$2,000
Maximum Loan Amount:$35,000
Loan Terms:3, 5 years
Minimum Income:None

Details

Origination Fees:1% - 5%
Late Fees:Greater of (a) 5% of payment due or (b) $15
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$1,000
Maximum Loan Amount:$40,000
Loan Terms:3, 5 years
Minimum Income:None

Details

Origination Fees:1% - 6%
Late Fees:Greater of (a) 5% of payment due or (b) $15
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$5,000
Maximum Loan Amount:$35,000
Loan Terms:2, 3, 4, 5 years
Minimum Income:None

Details

Origination Fees:2% - 5%
Late Fees:No
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$1,000
Maximum Loan Amount:$50,000
Loan Terms:3, 5 years
Minimum Income:None, but must have at least $1,000 per month of free cash flow

Details

Origination Fees:1% - 5%
Late Fees:$10 after 15-day grace period
Prepayment Penalty:No
Soft Credit Check:Yes

Overview

Minimum Loan Amount:$2,000
Maximum Loan Amount:$35,000
Loan Terms:3, 5 years
Minimum Income:None

Details

Origination Fees:0.99% - 5.99%
Late Fees:$15
Prepayment Penalty:No
Soft Credit Check:Yes

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