subject: How To Be Rich [print this page] If you have ever wondered what it takes to be rich, a good place to start is to know the seven obstacles that keep people from being rich and achieving financial success in life. These obstacles are so important that your ability to pursue your financial goals, and create wealth for yourself and generations to come, may depend on how well you are able to avoid these obstacles.
Obstacle Number 1 "" Lack of Knowledge
People often say that if you think education is expensive, try ignorance. The fact is, many people don"t fully understand how things work in the financial world, and how to make their money work effectively for them. Most people are used to trading hours for dollars. Let me ask you a question; what would happen if you were no longer in a position to trade those hours for the dollars? Life could quickly become challenging couldn"t it? A major key to financial success is to acquire the knowledge you need to put yourself in a position where your money is working effectively for you. Many people do not appreciate the power of compound interest, which can have a dramatic effect on an investment portfolio over a long period of time.
Obstacle Number 2 "" Lack of clearly defined goals
The problem with not having clearly defined goals is that you will have no direction. In addition, you will have no way of knowing whether you are on track or not. Your financial goals and objectives have to be clearly defined. They should be categorized into short-term, medium-term, and long-term goals.
Obstacle Number 3 "" Debt
It is very important to understand debt, and the role it plays when one is trying to create wealth and build financial success. Credit-card debt is a big hindrance to financial success. Have you ever wondered why the balance on your credit-card never seems to go down, especially if you just keep making the minimum payment? Unless you are paying off your entire balance every month, credit cards can be very expensive. Now, all borrowing is not necessarily bad. Sometimes, long term borrowing can be appropriate for investing. For example, buying a house, an investment property or assets that can generate more income or growth for you.
Obstacle Number 4 "" Inappropriate Investments
Unfortunately, many investors can lose money when they make inappropriate investments or investments that are not congruent with their financial objectives. It is important to take the time to research investments and the people or companies with whom you are investing.
Obstacle Number 5 "" Inflation
The effect of inflation is another obstacle you must consider. If your money is not working for you, then it is losing ground to inflation. If your money is earning less than the rate of inflation, then your money is not working effectively, and you are still losing.
Obstacle Number 6 "" Taxes
If you do not take steps to manage your taxes, they can be a serious obstacle in your effort to create wealth and be financially successful. Being aware of the tax implications of your financial decisions can turn out to be extremely beneficial to you in your quest for financial success.
Obstacle Number 7 "" Procrastination
If you don"t start, then it will never happen! If you never get around to planning for your future, it will be extremely difficult to reach your financial goals.
