Why We Make The Mistakes We Do When It Comes To Our Finances

Don't Make This Mistakes

 Mistakes We made with money
We grew up without any money.
Perpetually in debt. Hand-to-mouth existence,
Which is why I grew up hating money.
I thought it was the cause of all our problems.
And I never wanted money to rule over me.
What I didn't realize though was that this
desire to dismiss money led me to disrespect it,
Because I had a knack for making money, I
never really spent any effort in understanding
how to manage and grow it.

In the process, I ended up making a lot of

Mistake 1

I took loans to buy real estate.

Assuming the price appreciation would take

care of the interest rate | pay.

I didn't take into account taxes.

I didn't take into account inflation.

didn't do the maths, that to get


respectable return, the price will have to grow

approximately twenty percent year-on-year.

Mistake 2

Whenever I made any extra cash, instead of

paying off the loan, I invested it in startups.

Convinced that the startup would multiply my

money several times over.

I basically went to a casino convinced I would

make enough money to repay my loans.

That's what I did!

Mistake 3

I invested in illiquid assets - startups, real


And rarely in liquid assets - stocks, gold.

So, when tough times happened, I had a lot of

paper wealth' but no cash.

Which meant collecting even more debt.

Never trying to pay it back.

Because hey, the previous example - of not

paying off loans with extra cash!

Mistake 4

For an entire decade, I took lower-than-market

salary, over-indexing on equity.

believed the equity would make me much

more than the salary ever would.

So when things didn't end up as expected, I

was left with no wealth.

Mistake 5

over indexed on the future.

Continued to maintain my lifestyle when I

should have lowered it.

Maxed my credit cards.

Accumulated more debt.

All in the hope that one mega event in the

future would resolve all issues.

Mistake 6

I invested in stocks when the markets went

high, in the hope of making fast money.

I sold in panic when the market tanked, so

that I didn't lose money.

It should have been the exact opposite.

Mistake 7

Whenever I was in need of money, I broke my

mutual fund investment to generate cash.

I basically broke compounding.

I persisted with it during the painful slow-

growth period.

And just when compounded growth was about

to take off, I clipped its wings.

Mistake 8

I discouraged my wife from investing in

mutual funds and buying gold.

She still did.

I mocked her and laughed at her.

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Credit:- Do Epic Shit By Ankur Wariko

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