A Personal Finance Blog for Malaysian: You have any of these "Worst Money Mistakes"??

Tuesday, June 7, 2016

You have any of these "Worst Money Mistakes"??

Do you agree that the Golden Rule in Personal Finance is Earn More than Spend.

So long as you spend less than you earn (i.e. saving) over a long long period of time and you invest the different, you will be doing better and better.

The KEY words are:- Saving and Invest.

People said, The Poor being poor usually because of poor decisions.

What are the "Worst Money Mistakes" people made?

  1. Over-spending over a long period of time. It kills.
    • Couple spend too much on wedding, via borrowing, tends to end the marriage sooner than other couple. If you don't believe, look around.
  2. Not working hard enough to maximize your career i.e. your income is being limited.
    • if a person works hard and grows his income, he will have earn a lot more over his lifetime. So, not working hard enough can cost you millions of dollars.
  3. Being deep in debt for too long. This might be related to #1 mistake above.
    • It is very common to be in debt but don't get used to it. Get Out Of Debt (G.O.O.D.) as soon as possible while you are young, by not making the #2 mistake above.
  4. Waiting (too long) to invest
    • time is your best friend when come to growing your wealth.
    • to compensate shorter time frame with higher rate of return is simply unrealistic.
  5. Buying too much "unproductive assets"
    • Malaysian likes property, houses, condo etc.
    • Buying too much at right time and right price, you will be rich beyond imagination (haha... a bit exaggerated)
    • Buying too much at wrong time and wrong price may kill your cashflow and holding power.
    • Not all assets can produce income, e.g. no tenant, unable to collect rental.
  6. Marrying the wrong person
    • Seriously? It happens. If your spouse get you into a loan and he/she may drag you into bankruptcy.
    • Your spouse mismanage the finance. Marriage may be gone with your money.
  7. Not having enough emergency fund
    • An emergency fund is your first line of defense against unexpected financial problems.
    • "unexpected" events can be regular... car breakdown, washing machine breakdown etc
    • "unexpected" event can be irregular but still happens like hospitalisation due to illness or major accident causing disability to generate income.
  8. Not having enough insurance
    • Yup, some people don't believe insurance matters but "insurance" is the biggest emergency fund when you are in need. You can avoid #7 mistake with insurance.