Reasons Why Most People Are Still Broke (Avoid at all Cost) - Charlie Munger

reasons why most people are broke we all experience being broke at some point in our lives whether it's due to low or no income or not having enough savings to make ends meet in the future this can leave you feeling like you don't know what to say or do it's very uncomfortable and can ruin your mood or even make you depressed so what is the reason behind most people broke here are just some of the factors draining us financially number one you try to appear rich most people are broke because they aren't willing to live on less than they earn if a person earns a hundred dollars an hour and works 40 hours a week at that job they wouldn't be able to live on limit than what a hundred dollars an hour is capable of producing the same thing goes for someone making ten dollars an hour if that person Works 40 hours a week at their job like the other example they'd only be able to live on nine dollars an hour when you buy something you don't pay in dollars or rupees instead you pay an hour's worked which is precisely what people don't realize which makes them broke you see an iPhone 14 sold for two thousand dollars you have the money in your bank and you make the transaction you think you have traded off two thousand dollars for a phone but in reality you have just traded off your time and hours worked assuming you have a salary of a thousand dollars per month and work 22 days a month for eight hours the total worked hours would be 22 times 8 equals 176 hours a thousand dollars divided by 176 equals five dollars per hour is your hourly rate this means that to buy an iPhone 14 you need to work for two thousand dollars divided by five equals 400 hours which is equivalent to 400 divided by eight working days per day equals 50 days what if you bought a cheap techno phone with decent features for a hundred dollars or about a hundred and seventy it would take you a hundred dollars divided by 176 6 equals 20 hours yes the iPhone 14 has much better features than techno but when you can pair it with working 20 hours for owning a techno versus working 50 days for an iPhone just for those extra features and a good camera is it worth it you have to work a whooping 50 days for 8 hours to afford those additional features in a phone you will barely use are those additional features worth 50 working days for you you decide for yourselves buying an iPhone or any expensive stuff only makes sense if your hourly rate exceeds the price of the product if your hourly rate is around 50 to 100 dollars per hour you don't have to think twice about buying an iPhone once you realize the actual math behind buying things you will never be broke again we must be willing to have a lifestyle at least one step down from our income level that is what the price of Lifestyle means it means giving up some of our wants and most people will not do that repeat after me no Gucci belt no Armani suit no dng shoes no Rolex watch no fashionable outfit and no single piece of jewelry the goal is being rich and not to look rich look broke be rich number two you are controlled by fear fear makes you lose faith and say no no and no again it will take your money from you like a lightning strike from a clear sky while cheering crowds are dancing to celebrate your success and others are laughing at your failure we all need courage to keep going in life and no one sees this more clearly than an athlete who ran a marathon or a basketball player who dunked the ball but what is it that allows them to run past fear if you want to evade fear and be wealthy and well off in life you must start thinking about changing your mindset about fear and conquering it forever risk number three your lucky financial goals you probably don't have millions in your bank account yet you want it you want to be rich this is natural the wealthy individuals around us are dreamers who want to become the next Bill Gates Steve Jobs or Warren Buffett millionaires with the nerve to create companies that dominate their field and that's admirable but if you don't have significant financial habits like these individuals you might work hard for a while similar to the time it took Beethoven to write a symphony and then quit your job when it looks like you'll never earn a million dollars or end up broke that's why it helps if you set financial goals for yourself and make them realistic are you willing to make a million dollars from just starting with zero then hit that subscribe button and turn on the notifications I'll take you into steps of making your first million dollars and become financially independent number four you play the lottery if you think playing the lottery is a good idea I have some bad news if you rely on luck and play hoping to strike it rich the odds of winning the grand prize are one in 292 million 201 338 but that's not all the odds of winning a near lifetime payout or the one million dollar top prize are about six percent and if you play for just one year you have virtually no chance of winning any jackpot playing games of chance such as slots or bakra won't help either a 20 per week Lottery habit adds up to one thousand and forty dollars per year wasted are you throwing your hard-earned money away on lottery tickets want to make better financial decisions for your future then put that money to better use by opening a Roth IRA the idea behind the Roth IRA is that you aren't taxed on any distributions from it until the account has been in place for five years you can also try out profitable Investments I've covered them in my previous video episodes you can check them out if you don't want to be broke forever number five you have bad habits we've all heard the saying you are what you eat but it can be just as valid for money it's one thing to drink alcohol smoke cigarettes and enjoy Taco Bell but what about those other things that take money from your checking account without giving you any fun in return if you think about it Bad Habits Like These can be downright depressing and it's no wonder some people can find themselves broke at the end of December if you're using your finances to keep bad habits going you need to stop spending money on smoking drinking and drugs don't build wealth it destroys it and so do not taking care of yourself physically and emotionally by getting proper rest and nutrition now there are many ways to make money rather than giving up those vices you can check my previous video episodes to find out number six you have limiting beliefs about life and money there's an old saying if you don't have money you don't have anything if you want something ask for it broke people think that life happens to them while rich people make things happen broke people think money doesn't matter and rich people value money however this is not entirely true your mindset and attitude towards your finances will determine the outcome of your financial situation you may have been brought up thinking that money doesn't matter or that it's all about how hard you work to earn it but this is not correct money tends to flow into your life as soon as it is earned through various means to stay in the game you need a good mindset if you don't believe you can succeed then there is no way that you will just change your attitude take some deep breaths and get rid of negative thoughts by thinking a little positively if you let yourself down you'll feel like a failure but thinking positively when the going gets tough helps to have the right attitude and willpower if you think your attitude is the reason why you are broke then these books will have a positive impact on you the Power of Positive Thinking by Norman Vincent peel is one of the best selling self-help books ever written the book tells the story of Peel's life and how he became a best-selling author and founder of the 52 weeks for Christ movement the book contains powerful insights on how to master your thoughts leading to a happier and more fulfilling life Success Through a positive mental attitude this book is a unique opportunity to learn from the most successful people Napoleon Hill who was one of the most prominent personal development authors and motivational speakers in history sharing success principles of about two decades of study of over 500 most successful individuals in history individuals in the caliber of Thomas Edison Henry Ford John D Rockefeller as a man thinketh James Allen shares teachings from Modern Day motivational speakers it is based on the principle that you must first think correctly to be successful in any Endeavor and love whatever you do Allen says the thoughts become things and as such our thoughts are like seeds that if planted during childhood will bear good fruit throughout life it will be one of the books you refer to again and again when you want to take your life back into your own hands creating whatever kind of life you desire and lastly debts being broke is something that I'm sure people have no dreams about but too often it happens to people without them realizing how their assumptions about their circumstances were unfounded until it's too late the truth is we all fall into the Trap of taking on too much debt or not saving enough for emergencies which ultimately leads to financial problems down the road and because you stayed with me till the end here's a bonus for you only plan a budget planning a budget is the most critical thing you can do to avoid being broke it's hard to know your income until you make a budget and even if you have a salary raise if you haven't planned you could use that extra money before it comes in and then goes broke what you spend on a daily basis helps determine your financial future becoming financially independent is one of the essential goals in life you want to retire early save money and travel the world I will help you achieve all that with my next video learn how to be broke free by watching it now

Channel: Brothers Invests

Views: 473,703

Keywords: why most people are broke, reasons why most people are broke, why people are broke, broke, personal finance, personal finance management, money management tips, how to save money, money saving tips, here's why most people are broke, reasons why most people are still broke, how to stop being broke, ways to save money, financial independence, sisters invests, how to budget, reason why you dont have money, reason why people don't have money, reason why most people dont have money

Id: sGN-qf46JfQ

Length: 11min 0sec (660 seconds)

Published: Mon Oct 24 2022