Why do most of us live paycheque to paycheque when we live in one of the wealthiest countries in the world?  

There are two keys to wealth: making money and keeping it. The problem is, we aren’t keeping it. As a result, we aren’t creating wealth. Wealth is not only a function of what we do, but also of what we stay away from – things that destroy our opportunity for financial security. "Dollar destroyers" include:

Pursuing expensive hobbies – Fun can be expensive. The more you own, the more it costs to insure, fuel and maintain those toys.

Living the lifestyle of one’s parents – Many young couples desire the same standard of living as their parents, who have worked more than 20 years. This expectation is unrealistic and places the couple down a long road of debt.

Enabling others – Make sure any assistance you provide others doesn’t make them more dependent.

Not including both spouses in financial decisions – When only one spouse manages the household budget, the couple will rarely meet their financial goals. Both husband and wife should be actively involved and knowledgeable about their finances and investments.

Not taking care of your health – With soaring health-care costs, neglecting your health can have devastating financial consequences. Watch your weight and blood pressure, exercise, don’t smoke and visit your doctor regularly.

Owning a business with narrow profit margins – The problem with many businesses is they are commodity-oriented, such as car washes, florists and restaurants. The item or service offered has little differentiation among various retailers. For this reason, profits are minimal.

Succumbing to addictions – Drugs, gambling, alcohol, pornography and other vices can destroy the addicted, their personal relationships and their finances.

Being over-insured or under-insured – Buying too much insurance creates an unnecessary burden on your household as you struggle to pay the premiums each month. On the other hand, having too little insurance (including medical, disability or life) could lead to severe financial hardship in the event of an unexpected tragedy.

Following poor advice – While the vast majority of financial advisers strive to improve people’s lives, the profession is not immune to unethical and illegal activity. Be careful in selecting your advisers.

Taking unnecessary risks – Investing is best when it is simplest. Steady, moderate gains will get you where you want to go. Stick with what you know. Don’t risk borrowed money. Avoid get-rich-quick schemes.

Is your household doing things that keep you from wealth?

Rick R. Schramm was vice-president of commercial loans for Illinois National Bank at the time of publication. 

© 2008 Focus on the Family. All rights reserved. International copyright secured. Used by permission.

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