10 Obstacles To Financial Success


The following are obstacles that investors face that can keep them away from financial success. In general, you can overcome all these obstacles with enough discipline and education. It is critical to realise that motivation is not an obstacle. Just because you do not feel like doing something that does not mean you should not do it. Therefore, your aim to get to financial success has nothing to do with your feelings as it usually can mislead you into making a logical decision.

1- Fear of losing money

Many people are afraid of losing money that they decide not to take the risk. For every investment, there is an element of risk to it. The truth is you have not lost any money until you accept the risk, and if you lose, you still have the chance to learn from the experience.

The most successful investors, such as Warren Buffett, follow a value investing strategy to analyse companies in detail to minimise their risks. Although they had numerous losses before and have been wrong many times, their winnings were way higher than their losses. Therefore you must learn to educate yourself to get over your fears.

2- Bad habits that keep you away from building wealth

Many bad habits can keep you away from your financial goals. The following are a list of bad habits:

  • Laziness: Laziness by being busy as Robert Kiyosaki mensioned in his best selling book Rich Dad Poor Dad. Many people keep themselves busy with work and other things to keep them away from accomplishing thier goals which makes it laziness by being busy.
  • Lack of discipline: Not having the motive to work toward your goals, makes financial sucess a less of priority. As I have stated earlier motivation has nothing to do with your fianacial sucess. Investing is making logical decisions, therfore, discipline can get you to your goal faster.
  • Arrogance: not listening to professionals can make you Ignorant and potentially lose money. No one knows everything, therefore sometimes it is best to consult professional to stay vigilant.

If you want to learn more, check this article about five habits for a strong and rich mindset.

3- Lack of financial education

Not knowing enough is a huge obstacle to financial success. Therefore, it is essential to educate yourself and learn as much as possible to have an edge that can distinguish you from the mediocre investor. Check an article I wrote here to help you to become financially literate through seven important steps.

4- Short term focused

Do not be focused much on the short term. People are so short term focused that they forgot that things tend to perform better in the long term. If you want to make a business deal, you should do your analysis carefully, and even if you do not expect results in the short term due to market fluctuation, you should focus on the results in the long term.

Thinking long term is a virtue that every successful investor must-have. Being patient and waiting for the short term speculation to pass is a key to financial success. Being short-sighted will not get you far into building wealth.

5- No structured plan

Not having a strategy is a bad sign that you are heading for trouble. If you are a real estate or a stock market investor, you need to have a plan and a goal that you want to reach. Sometimes it helps if you have things in writing or tracked on an excel sheet to stay up to date with your investments and ensure you have not overlooked anything.

Have weekly checkups where you sit down and track the performance of your investments and plan your future move; by doing this, you are making sure that you are not making any rookie mistakes.

6- Excessive spending

Spending too much can negatively impact your financial success. Many people are materialistic; they buy things they can not afford to impress people they do not know. This is similar to having a hole in your wallet; instead of using that money to build wealth, you carelessly spend the money.

7- Too much debt

Not all debt is bad debt; however, having too much credit card debt and a high mortgage can keep you from achieving financial freedom. For example, If you put your money in a cash flow generating asset that gives you a 10% annual return, but at the same time, the interest you pay on your debts is higher than 10%, then you are not building financial wealth; you are losing money. Therefore, you must keep your debts within a reasonable limit and pay any credit card debts that can get in the way of achieving success.

8- Taxes

You must pay your fair share of taxes, but you are not obligated to pay more than you should; that is why you need a basic understanding of the tax system to pay only what you should. This can significantly minimise your capital gain tax by using legal tax laws to your advantage.

9- Inflation

Inflation can eat away your money and lower your purchasing power. There is a reason why rich people do not keep a tremendous amount of cash sitting down in their bank because the interests you make from your bank can barely keep up with inflation. It would be best if you looked for investments that can give you a return on investments that is higher than inflation. Otherwise, if you keep saving and let your money sit in the back, it will be worthless in ten years than what it is worth today.

10- Not having an Emergency fund

Life is unpredictable, and you can always find yourself in hardship such as losing your job, insurance bill and medical care that require a hefty payment. Therefore, unless you have an emergency account to pay any unforeseen bill, you will end up dipping your hands into your investments. This can keep you away from achieving your financial goals.

You should have an emergency account that has enough money that can keep you going for three months without an income. This will ensure that you are not taking money away from your savings and that your money is working hard for you in the long term.

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