Money Mistake #1 - Lifestyle Creep

I see this ALL the time. Executives getting pay rises, then their expenses rise to meet this new disposable income. They are working long stressful hours but not actually getting further financially. They are subconsciously keeping up with their friends and their new (leased) Audis, expensive overseas holidays and consumer goods.

Then I see the tradies who live simply, stashing cash on a monthly basis and on their 3rd investment property.

(Also please note horse people, as I explain to my kids buying another horse is exempted from this discussion as its a need not a want)

The Solution:

1. Pay yourself first

Set up a separate bank account. As soon as you get paid, set aside 10% of your income (or whatever you decide works) into your “investment account”. You dont get to see it when you are out and about. Look at automating purchasing ETFs or any investment that you cant just go to your bank app and spend without making a conscious choice to redeem this.

2. Be Aware

Awareness is half the battle. Notice what you are spending on. Do you really need this? Do you need to upgrade your iPhone, or your car? Is the one you have now perfectly fine.

Try and be conscious about living a more simple life. It can be done.

I always say to my kids:

If you want to be rich, live like a poor person.

If you want to be poor, live like a rich person.

Now, there is a middle balance here, you cant take it with you, but this is the number one mistake I see when people are trying to build wealth.

Want to chat about it? I look forward to your email at [email protected] or call me 0403397060

Stay tuned for number 2 next week.