By Laura Gariepy | Published May 24, 2024

You may not have all the money you need and want for many reasons. Maybe you haven’t received an adequate personal finance education. Or perhaps life has thrown some devastating circumstances your way, limiting your opportunities.

But, if you’re like many others, you may not be getting rich because you’re not focusing on the right ingredients to build wealth. We spoke with several financial professionals about what you have to give up if you want to get rich. Here are three of the most common answers.

1. Overspending on Things You Don’t Need

Carman Kubanda, a certified financial planner at Innovative Wealth Building, said, “The biggest culprit I see is overspending. Most people don’t realize that the eating out, [using] vending machines [and] online shopping culture is keeping them where they are at. The adage of ‘pay yourself first’ needs to be restored across all income levels.”

Fortunately, you have the power to break this poor financial habit.

“The easiest way to determine how to fix the issue is to identify where you are spending your money each month and then identify the expenses that are not necessary to your life,” said Christopher Mankoff, CFP at JTL Wealth Partners. “Once you have identified the expenses that are not essential, then plan to eliminate or decrease the expenses and use the money saved to invest for the future.”

Mankoff continued, “One of the largest expenses most people have is their car payments. By forgoing that new luxury vehicle and opting for something less glamorous and less expensive, you can use the amount saved to invest and create wealth. Unreasonable auto payments make me cringe as a financial planner because that is money being used to pay for an asset that loses value through deprecation each year when you could use that money to invest for your future.”

Larson Patty, a financial planner at Rothman Investment Management, offered this bottom line: “Whether an individual decides to spend some now or more later is a judgment call every person has to make on every spending decision. Current consumption comes at the cost of reduced future consumption, and every person has to establish the balance that is best for them.”

2. Your Time

Unless you win the lottery, you won’t get rich from a single event. Instead, you must build wealth mindfully, strategically, and consistently over time.

“Buying investments that appreciate or generate income, like stocks and real estate, consistently is key to success,” said Trevor Scotto, CFP and partner at Fiduciary Financial Group.

You can also boost your wealth-building capacity by making yourself more valuable in the job market.

“People really need to invest their time, energy and sometimes a little money into themselves if they truly expect to get a bump up in their own personal earning potential,” Scotto said. “The economy is always evolving, and so should you. Learn a new skill or enhance your knowledge in your current field.”

However, maximizing your paycheck at your 9-5 might not be enough. A side hustle can help you become rich on an average salary. Said Scotto, “You may need to put in some time over the weekends and be willing to devote the hard work and time to those supplementary endeavors to accelerate debt reduction, savings and investment goals.”

3. The Unenjoyable Grind

Many will get so caught up in trying to get rich that they forget to enjoy the process and burn out before they can build financial freedom.

“Most people have a difficult relationship with money because the ways they earn and spend it are unhealthy,” noted Ken Honda, a money and happiness expert. “This is to say that a lot of people work at a job they hate just for the paycheck, and the stress adds up quickly.”

What can you do if you want to get rich?

“Find an occupation that you actually will enjoy and where you can thrive, grow, and contribute,” Honda said. “Whatever you choose, it’s absolutely possible to become a millionaire or successful. It may take time, but finding the place where your skills and talents shine is the most important thing you can do to guarantee your own success.”

Michael Hills, a financial advisor at Apex Wealth, added, “There’s a greater degree of passion and drive that somebody is able to put into something when they enjoy it.”

When you don’t enjoy something, you get burnt out quickly, and it’s likely you will give up before you get rich.

How To Build Wealth

Follow these rules to get rich.

Adhere to a Values-Based Budget

Sticking to a budget can be much easier if it allows you to spend money on your priorities.

Stephanie McCullough, founder of Sofia Financial, said, “With my clients, we always dive deep into their values, what’s most important to them, and the life they want to create for themselves and their families. Then, we use that filter to look at their spending. That analysis often reveals areas where the money flow doesn’t match with their values.

“Our goal should be to align the use of all our resources, money included, with our particular personal values — and the security and happiness of our future self should be high on that list of values.”

Grow Your Income

While more money can create more problems, an increased cash flow likely solves a few concerns, too.

“Growing your income makes it easier to spend your time and energy on your career and the fun things in life instead of worrying about every penny and using large amounts of your time to save small amounts [of cash],” said Jenna VanLeeuwen, CFP at Aligning Wealth.

Invest

It’s not enough to cut your expenses and pocket the difference. Where you put those dollars matters.

“Money tucked away in a savings account won’t keep up with inflation as costs rise over time,” VanLeeuwen said, “but investing will help your hard-earned savings outpace inflation and grow into wealth for the long haul.”

Read the full article here.