Getting rich is not an overnight process; it takes time and a lot of effort. However, most of us never build much wealth in our lifetime. So, recently Ramit Sethi, an American entrepreneur, broke down the secrets to getting wealthy. He talked about the 3 mistakes that are keeping you and most of the younger generation from getting rich. Let’s take a look at them.
3 mistakes are keeping you from getting rich
Ramit Sethi’s book “I will teach you to be rich” talks about these problems as he has seen young people make this mistake time and again. I can vouch for it, as even I am guilty of the 3rd one.
1) Taking too long to start investing
Have you heard the phrase “Time is money”? This is especially true when it comes to investing. When you start investing, the first 2 decades might not look like giving you much outcome. However, the magic happens in the next 10-15 years. Instead of focusing on building an investment habit from the early 20s, many just ward off the topic till their 40s, and it’s too late at that time.
A 5 years difference between two people’s starting date of investment means if they retire at the same age, the person who invested first will have double the money. This is because if we consider the rule of 72, which says that the approximate time to double your money is by dividing 72 by the rate of interest and an interest rate of 15%, which is achievable, your money will double almost every 5 years. So, start investing in your 20s.
2) Waiting to invest till your debt is cleared off
Clearing debt takes time, and if you do not invest at the time, the habit-building doesn’t happen. And if you fail to formulate the financial discipline early in life, it’s going to be a problem. So, unless your interest rates are too high, start investing a small portion and pay a little less towards your debt. Once the debt is cleared, you can put all the funds into investments.
3) Not building ‘financial discipline when it comes to crypto or other trend-based investments
Investing all your money into one asset type is very risky, and doing that is basically gambling If you want to invest in crypto or any hyped-up investments, limit it between 1%-5% of your portfolio. Keep the rest into safer options like index funds and bonds. It’s okay to play around and experiment with this 5%, so your investment journey doesn’t become boring, or maybe you do hit the jackpot.
What are your thoughts on the 3 mistakes that are keeping you from getting rich that Ramit talks about? Let us know in the comment below. And, if you found our content informative, share it with your family and friends.
Also Read: Younger generations are 7.5 times more likely to hold crypto: Bank of America survey