We all have heard numerous stories about people who started from scratch and with empty pockets but turned out to be millionaires and billionaires. Lots of people usually ask what are the habits to overcome poverty and become rich? so let’s have a look.
What makes these people different from us? Have we really accepted our so-called “pre-written” mediocre fate? Sadly yes. Like it or not, but these behaviour and habits do play a life-altering role. To be in a much better place, financially, we have to stick to a previously written set of rules; don’t worry, there are very easy to follow. We can always look for inspiration from those who have gone through similar phases.
In this post, we are going to let you know about some life-altering habits that will make you have a tighter grip on your financial aspects. However, some pieces of advice work for some people while they don’t for the other set of people. In that case, take your pick wisely!
Who’s actually poor?
The notion of being poor is actually quite subjective. But moving forward, we have to establish who we are considering poor?
A person has the insufficient wealth to meet the necessities or comforts of life or to live in a manner considered acceptable in society. (Quick note: Being poor is different from being broke. Poor is a long-term situation. While broke means that you have no money, but it’s a temporary situation.)
Needless to say, nobody prefers to be poor or would want to live a life of misery. But this world is full of terrific examples of people who were born poor but ended up becoming super-rich. Fancy!
Nonetheless, if you are not satisfied with your financial mobility/stability right now, you can always move past this phase and search for better opportunities. Always remember; good things come to those who fight for them.
Quick Note: There was a famous survey posted by the Wall Street Journal regarding how to get rich. Here’s the result of the poll. Carefully observe the manner by which people think they can get wealthy.
3 Simple Habits To Overcome Poverty and Become Rich
Let us now see what all habits you need to incorporate into your daily life in order to make financial stability follow you.
1. Change Your Mindset:
“The starting point of all achievement is DESIRE. Keep this constantly in mind. Weak desire brings weak results, just as a small fire makes a small amount of heat.” ― Napoleon Hill, Think and Grow Rich:
After a while, you’ll definitely understand that life is nothing but a game of mindset. If you are considering your situation to be the end game then sorry to burst your bubble there, it is definitely not. Even if you have a chance to tilt-shift your mindset, why not focus on positive aspects then? Your financial position is not fixed, it never will be.
There’s a simple rule in life that follows everywhere and hence in the financial world as well: change your mindset and see things rolling back to you quickly.
Changing your mindset also does relate linearly to changing your environment. If you are stuck in a toxic environment filled with alcoholics and gamblers all around, you already know where you are lacking. Looking for a solution? Change your location by choosing a better surrounding and environment around you. Simple, right?
2. Be a little Analytical about Your Financial History
We understand how long a chain of debts can become roadblocks when it comes to having a grip on your financial status. That’s pretty normal even. What’s not normal is not analyzing where your money is going or how long has it been going. The solution is both simple yet tricky; use analytics as an end game.
Every repetitive history has a loophole if it doesn’t seem to work out. Find yours. Keep looking for better investment options while considering the safety factor, of course. Moreover, make sure that you don’t get trapped in the web of “easy money” through illegal sources. It is never, I repeat, never an option. If you look up to someone who manages his/her financial structure quite tremendously, don’t feel shy about striking a conversation with them.
Unload your pressure of debts and other faulty saving schemes and drop out the traditional ways that don’t work well in the current scenarios.
3. Live Within Your Means
Interestingly, if you notice the survey mentioned earlier, luck ties savings in the poll. “Getting lucky through an inheritance or winning the lottery.” tied with “live frugally and save money.”
Earning millions of bucks wouldn’t matter if you wouldn’t know how you can actually put them to use. Let’s statistically give you a harsh reality check; more than 65% of your salary goes into your housing and food expenses. While these two things are certainly the most important things in life, you can save a lot more here. Swear to yourself to not spend more than 25% on your housing and 15% on your food. I know it is more of a rosy picture but you certainly can do it.
Adding to the list never be in one of those never-ending credit card debt loans. No matter how tempting it feels at first, it is going to get your financial account crooked for the longer term. Out of all your expenses, primarily shift your focus to your emergency fund. You can always buy that extra piece of cloth or that extra piece of footwear later. This is one of the top habits to overcome poverty.
Also read: The Best Ever Solution to Save Money for Salaried Employees
BONUS: 50-30-20 Rule
Till now we just covered the theory. However, this rule gives you a practical formula for spending to avoid poverty. Here is the straightforward 50-30-20 rule.
- Spend 50% of your income on your needs: For example- Housing, food, utility, necessities etc.
- Limit your wants to 30%: For example- dining out, vacations, entertainment etc.
- Save remaining 20%: Final twenty percent should go towards financial goals like an emergency fund, retirement fund, debt repayment, investing etc
This rule of 50-30-20 can be very beneficial if you are just starting out budgeting. Breaking down the basics categories (percentage-wise) can help you create a balance between your obligations, goals, and extravagance.
Bottomline
Being rich is a goal of the majority of the population. However, most people never get there. Many of us are just one paycheck away from becoming poor.
The hacks discussed in this post are solid and proven methods or habits to overcome poverty and become rich. Nevertheless, there’s a reason why these strategies are called personal finance. Well, personal finance is ‘personal’ and totally depends on how you deal with it. Good luck.
Kritesh (Tweet here) is the Founder & CEO of Trade Brains & FinGrad. He is an NSE Certified Equity Fundamental Analyst with +7 Years of Experience in Share Market Investing. Kritesh frequently writes about Share Market Investing and IPOs and publishes his personal insights on the market.
