(ARTICLE) 99% of People Don’t Follow These 4 Money Rules — And That Keeps Them in Poverty

Money is something that a majority of people do not master. The more I talk about money with people, the more I realise that many have a total ignorance of the subject.

It’s not that surprising. The education system has never taught you what money is, and even worse, how to manage your money in order to make the right decisions for your future.

So the less you know about money, the more you risk losing a lot of it. Whether you are very rich or very poor, this rule applies equally.

I don’t know how many stories I’ve read of extremely rich people who have squandered all their hard-earned money in a few years.

Yet these people had everything they needed to enjoy their wealth. Well, when I say everything, I should say almost everything.

These people did not know enough about money to manage it properly.

If you don’t know how to manage your money, you can still become rich, but you won’t stay rich.

On the other hand, even if you are middle-class or poor, you have a real chance to improve your life enormously if you learn how to manage your money wisely.

(Go and rewatch the financial videos I have up so far)

Pay Yourself First

From a very young age, the education system has conditioned us to follow the same path. It starts with studies, then it goes on with a 9-to-5 job more or less well paid.

Then you have to buy a house to take care of your family. And of course you have to buy a car for your family.

Ideally, society wants you make these purchases on credit (long term payment plans).

That way, you are stuck, and you will have to keep going to work day after day to earn this precious salary.

The goal for the government is that you can pay your taxes so that the monetary and financial system can function properly.

You become conditioned like a robot to pay all your bills as soon as your paycheck comes in.

Then, once all your bills and other credits are paid, you will fall into the trap of the consumer society that pushes you to spend your money on a whole bunch of things that you absolutely don’t need.

Then At the end of the month, you realise that you have nothing left to save.

Instead of being at the bottom of your list, YOU, should be at the very top of your list when it comes to the payments to be made each month.

This means that as soon as your salary comes in, you should directly set aside the amount you have decided on beforehand. The best thing is to automate this so that you always pay yourself first.

You’ll forget about the amount you’ve saved, and you’ll have to make sure you live with the money left over to pay your bills, and enjoy your life.

Save For A Rainy Day

If you’ve been with me for a while, you’ll know how much I go on about this.

With real savings at your disposal, you will be ready to face difficult days. If you lose your job, get injured or stop receiving an income all of a sudden, you’ll be able to get through those bad times.

Many people think it’ll never happen to them.

But look what happened in 2020 when Covid came. People lost their jobs overnight and were scared and stressed on how they was gonna be paying their bills.

If they had an emergency fund which could cover them for AT LEAST 6 months, they’d have not been that stressed and worried.

Live Below Your Means

As I have explained, the consumer society we live in is doing everything possible to ensure that we spend more and more money. Advertisers are being more inventive so that you always want to buy new things.

But if you take the time to think about it, you’ll realise that you don’t actually NEED to change your phone every year to get the latest iPhone for example.

If you take a step back, you’ll realise that you’re buying a lot of things you don’t need.

“He who buys what he does not need, steals from himself.”

Instead of continuing to steal from yourself, you need to start living below your means. This is a basic money rule. By applying it, you will boost your personal finances like never before.

Don’t Get Into Bad Debt

Go and rewatch the video I made on the differences between good debt and bad debt.

I’ve always been surprised to see so many people using and abusing credit. I even know people who have practically ended up financially ruined by accumulating all kinds of credits and loans.

The worst thing is that the majority of these credits were contracted for useless things they don’t need.

Debt gives you that feeling that everything is free, and that’s a mistake.

By taking the time to save, you’ll give real value back to the things that consumer society constantly pushes you to buy. The result is guaranteed: you’ll spend much less.

Perhaps the only debt exception is the purchase of your permanent home. But even so, many will tell you that it is ultimately more profitable to remain a tenant.

The only time you should go into debt is if that debt is to be used as an investment to return you more money.

Conclusion

People who do not master the basic money rules will end up in poverty for sure.

This applies whether you are rich or poor, because in any case, not knowing how to manage your money will condemn you to spend it all.

By always paying yourself first in order to save for a rainy day, and then avoiding buying unnecessary things, you will be able to put yourself in a good position to build a prosperous future. The final point is of course to avoid debt as much as possible.

If you follow these rules, which are basically common sense, I can guarantee that your life will be changed forever.

Till next time.