Many Americans dream of building wealth, but common financial habits may be quietly sabotaging their progress. In a recent Instagram post, personal finance expert Humphrey Yang broke down four behaviors that could be keeping you from getting rich.
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Here’s a closer look at the four habits Yang said could be holding you back financially.
Spending on Liabilities Instead of Assets
Yang believes that too many of us spend too much money on “liabilities.”
“Liabilities are anything that takes money out of your pocket — cars, vacations, shopping expenses, unused subscriptions and more,” he said.
Instead, he said to focus your spending on acquiring assets that appreciate over time.
“Examples of this could be rental properties, stocks, metals, collectibles, etc.,” Yang said.
Learn More: 4 Secrets of the Truly Wealthy, According To Dave Ramsey
Overspending To Signal Wealth
The second trap many people fall into is paying too much for things that symbolize status, Yang said.
“Too many people want to buy things to signal their wealth because it represents to outsiders that they are successful,” he said. “But pretend you buy a designer good that costs you $2,500 — that one single purchase alone could derail 1,000 perfectly reasonable money decisions.”
Yang said that if you are buying a designer item, make sure that you can afford it multiple times over and that you aren’t just buying it to show off.
Avoiding Calculated Financial Risks
Getting rich often requires getting outside of your comfort zone.
“One of the biggest reasons people don’t get rich is that they are comfortable and want to avoid risk altogether,” Yang said. “While reckless gambling can ruin your finances, calculated risks and pushing yourself to learn new skills or investing your money are great tools to build wealth.”
Focusing on Short-Term Gains
To get rich, you need to keep a long-term perspective.
“Warren Buffett puts it best,” Yang said. “He says that wealth is the transfer of money from the impatient to the patient. So if you want to get rich, start thinking in decades and not days.”
By avoiding these common pitfalls, you can set yourself up for long-term financial success.
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This article originally appeared on GOBankingRates.com: Humphrey Yang: 4 Bad Habits That Stop You From Becoming Rich
