There are various arch enemies that will hinder in our journey towards financial freedom. We should recognize these obstacles so that we can prepare before hand and anticipate their effect. We can plan ahead before possible problems occur. Lack of Financial Goal. When we go out and sail in the open seas towards our journey to financial freedom without planning of destination we can be easily blown out by the wind of challenges and difficulties along the way. It is necessary to set our financial goal and equip ourselves with the right information and will to succeed to make our sail to financial freedom smooth and hassle-free. Conduct your own personal finance strategy to plan your financial goals.
Procrastination. Doing things tomorrow what you can accomplish today will delay your money to accumulate. This is termed as “mañana” habit. Always remember that time is a great ally in building wealth. If you save and invest early, we can grow our money faster. Imagine the earning potential of your money when you put it in a facility that will give you 12% per year rate of return, it would be big. I have made a sample calculation in my previous article in the importance of saving money early.
Inflation. Inflation refers to the purchasing power of our money. Relatively, our money loses value because of the economic conditions and increasing prices of commodities. I still remember the time when the cost of bread is only 25 cents. Now the cost per piece is Php 2.00 already. This is mainly because the cost of making bread is getting more expensive every year causing your money to lose it purchasing power. On the average, the Philippines is experiencing 6-8 percent increase in inflation rate per year. Be mindful that you should beat inflation when you plan to invest your money. This means that you should put your money into a facility that will give you a rate of return more than the inflation rate.
Taxation. When we buy any kind of commodities or pay services, tax is being imposed. This will be used by the government in building new roads, erect new schools and other projects that will improve the lives of the community. Different taxes are charged to the people on different types of commodities and services. We should consider this obstacle when choosing for the appropriate rate of return of your hard-earned money.
Blaming others about your current financial situation. Some of us blame our low financial situation to other people or to the government. Some condemn our boss or the company because we are poor. Whenever the government says that the economy is getting higher, why are most people are still complaining and say that they have not felt the progress? We are the one controlling our sail. The wind is out there affecting our journey but still we will be in charge of what direction we want to be. Bear in mind that we control ourselves and only our own self is accountable for whatever financial situation we are in. If your financially low right now and trapped with debt, you need a change in your habits. That change should start from you and make a decision to get in touch with your dreams again.
Lack of Financial Knowledge. Right financial education is very important in growing your money. The money will work against you if you lack financial knowledge. Most of the people are trapped in the rat race because they lack the right information on building wealth. Even if they are determined to grow their money, without financial education they cannot increase it consistently and the earning potential of their money is not maximized. Seek appropriate financial education by attending financial seminars and trainings. Read financial books like Robert Kiyosaki’s Rich Dad, Poor Dad and T Harv Eker’s Secrets Of The Millionaire Mind. These will arm you with the right information in properly building you wealth.
Unreasonable requests of family and friends. Most expatriates abroad are suffering from the dilemma of meeting the demands of family and friends even it is no longer reasonable. As one of those expats, the reason why we go abroad and sacrifice being away from our family is to earn more money. We want to give their family a bright future. Sometimes, they request money more than their financial needs. They engage into unwanted purchases and spend money without thinking that earning money in abroad is difficult. On the other hand, you should pay yourself first before giving any financial assistance to family and friends. All help that you are giving to them should have a limit, beyond that; do not give anymore. They should understand that they should be wise in handling nad managing the financial assistance that they are getting. This will also ensure that you are secured whenever you need something for your self.
Impulse Buying. Buying things that you do not need will definitely lose the potential earning capacity of your money. Impulse buying usually happens because of poor spending habits. Especially if you do not plan your purchases, when you go out for shopping, you end up buying things that are not necessarily what you need. You need to determine the difference of your need versus your wants.
Your Own self. The greatest obstacle in your journey towards financial independence is yourself. This is because your mindset about money matters has a great impact in all your actions. If you always think negatively in growing your money, you might end up doing nothing and the time opportunity to build up your wealth will be lost. Have a financial abundant mindset and take charge to meet your financial goal. If you are financially down right now or you are trapped with debts, go out of your comfort zone and decide to make a change. Enrich yourself with financial knowledge and surround yourself with people of similar goals.
The next time you made a major purchase, think of your arch enemies towards financial freedom. They will snatch the opportunity of your money to grow. Knowing and anticipating your enemies towards your journey to financial freedom will make your travel smooth and easy.
What are the other arch enemies of building wealth? Share your thoughts and meet us in the comments.