5 Traps Preventing You from Building Wealth (2024)

Truth be told, if you are reading this article, then chances are you have a deep desire to begin the journey towards building wealth. There is also a good possibility that your desire goes well beyond yourself, and it includes the longing to build a financial legacy for your family for generations to come. There may have been a few traps in the past that sprung up on you that caused you to fall off course. As a result, you have not been able to build the wealth that you have so desperately aspired to do.

With that thought in mind, we wanted to take some time and outline what those traps are, and also help you think a little bit different in how to overcome and avoid those traps moving forward.

5 Traps That Are Preventing You from Building Wealth

Comparison

The first wealth-building trap that people often fall for is the comparison trap. You are always looking to the left, to the right, to the front, and looking around at everybody else, and what everybody else has. You do this to the point, that you begin to desire what they have. As a result, you end up getting trapped and unable to achieve your own financial goals, because you are so busy trying to chase after those things you see that others possess. You have to realize that what they have, is for them, and not necessarily for you.

That doesn’t mean that you need it, or that you should want it. For example, just because your friend has a new car or your cousin is getting married and you’re not, doesn’t mean that you should place yourself in hot pursuit of these same things. You have one life to live, and that one is yours. Don’t fall into the comparison trap that has you looking on TV, looking at your neighbors, looking at your co-workers, looking at other family members and trying to be them. Be the best you that you can be.

The Bible tells us that,

But Godliness with Contentment is Great Gain (1 Timothy 6:6)

Instead of focusing on the comparison and looking at other people and trying to aspire to be them, just look at the things that you have in your life currently, and begin to practice gratefulness. In that moment, you’ll begin to gain greatly.

Complacency

How many times have you heard someone say, “Well, this is what it is,” “I will always have a student loan debt,” or “Everybody has a car loan, it’s just a part of life.” You absolutely must stop being complacent. The Bible says,

For as a man thinketh in his heart, so is he… (Proverbs 23:7)

So what are you thinking? Are you saying, “This is me and this is all I’m going to do.” You have to start thinking differently. No matter what other people are saying about their financial situation, you should always push yourself to strive for better. Strive to get out of debt; strive to build long-lasting wealth for yourself and your family.

Consumerism

The third trap that many people fall for, which in turn stops them from building wealth, is consumerism. In our country, especially here in the USA, people love to buy and spend every dollar that comes in. Research shows that 3 out of 4 American households are living paycheck to paycheck. Why is that? It’s because of our love for new and shiny things! Hence, most have more month than they have money, and are left with little to no income to invest.

People are constantly bombarded with advertisem*nts on TV, their phones, and the radio. In just a swipe or click of a button, you can purchase just about anything you want with ease. The number one wealth-building tool that you have right now in your possession is your income. If you are using your income to buy more stuff you don’t need, you’re not using your top weapon to build long-term wealth.

Contradiction

How many of you know someone who is very intelligent, and very knowledgeable about a subject or a topic but they don’t put any action behind what they know? They in no way, practice what they preach. It is very contradictory if you read all the personal finance books, or you went to all the budgeting seminars, and yet put none of the information that you gathered into action. That is going to hold you back from attaining and building the wealth that you desire and need, in order to leave a legacy for your family.

Confusion

Many don’t have the knowledge base to know how to build wealth. The sad reality, though, is that there is tons of information available for anyone who wants to obtain it. There are countless books, podcasts, and blogs being written on the topic of building wealth and it costs you nothing to acquire this knowledge. If you have not taken the time to invest in your knowledge base, you prohibit yourself from having the ability to build wealth, because you don’t know what to do. You need to change that by seeking knowledge and information on what you need to do long-term to build wealth for your family.

Now is the time for you to do some real deal self-evaluation. Where do you stand in comparison to these five traps that we have outlined? Are you currently in the midst of them? Do you see them as being potential traps in the future?

Whatever it is, you need to make the proper adjustments to avoid these traps at all cost. The goal here is not just to teach you how to be good stewards of your finances and how to be good money managers alone. We want to move you into the realm of building long-term generational wealth. You have to put in the work and you will start to see the results!

5 Traps Preventing You from Building Wealth (2024)

FAQs

What are the 5 steps to building wealth? ›

Follow these five steps to get started on your generational wealth building journey:
  • Step 1: Pay off Debts. Think of debt as missed opportunity. ...
  • Step 2: Buy a House. ...
  • Step 3: Start Long-term Investing. ...
  • Step 4: Put an Estate Plan in Place. ...
  • Step 5: Share Your Financial Wisdom.
Mar 19, 2024

What is the biggest obstacle to building wealth? ›

Debt can be a major obstacle to wealth-building. Effective debt management, consolidation, and financial education are key to overcoming this challenge. Financial literacy is essential for making informed decisions about money and investments.

What's a money trap? ›

If you don't automate your savings and plan on saving what's left after you handle your expenses, it might be tough to get ahead financially. This is a money trap because spending before saving is challenging. You're much better off saving first and then spending the rest.

What are the 4 key things you need to build wealth? ›

Here are the 4 steps that you should follow to create wealth over time.
  • Step 1: Save Smartly. Saving is the first step towards wealth creation. ...
  • Step 2: Turn your monthly saving into investment through SIPs. ...
  • Step 3: Increase your investment periodically. ...
  • Step 4: Invest lumpsum when possible.

What are the five pillars of wealth? ›

These five pillars are: earning, saving, investing, budgeting, and protecting. The first pillar of wealth is earning. To build wealth, you need to have a steady stream of income. The more you earn, the more you have to put towards savings, investments, and debt repayment.

What are the 3 pillars of building wealth? ›

The 3 Pillars: Everyday Money Management — Saving, Spending and Investing.

What is the number 1 key to building wealth? ›

While get-rich-quick schemes sometimes may be enticing, the tried-and-true way to build wealth is through regular saving and investing—and patiently allowing that money to grow over time. It's fine to start small. The important thing is to start and to start early. Earn money and then save and invest it smartly.

What builds your wealth faster? ›

One of the key ways to build wealth fast -- and over the long term -- is to earn passive income. And one of the best ways to generate passive income is to own one (or several) rental properties.

Why is it so hard to get rich? ›

The things that stop us from getting rich aren't just our lack of financial knowledge and lack of economic chances; they also have a lot to do with how we think and act. How we think about money and how we feel about making financial decisions have a big impact on how much wealth we can build up.

What is the easy money trap? ›

I like to call this the easy money trap: anything used as a store of value will have its supply increased, and anything whose supply can be easily increased will destroy the wealth of those who used it as a store of value.

What are your money blocks? ›

book, I describe a money block as “anything that holds you back from making the money you want.” This is usually an underlying belief or fear about money. You may or may not be aware of it, but it's there. Sometimes it's a completely hidden story that sabotages you in sneaky ways.

How to stop wasting money? ›

Here are some ideas to help you stop spending money and build healthier financial habits:
  1. Create a Budget. ...
  2. Visualize What You're Saving For.
  3. Always Shop with a List. ...
  4. Nix the Brand Names. ...
  5. Master Meal Prep.
  6. Consider Cash for In-store Shopping. ...
  7. Remove Temptation.
  8. Hit “Pause"
Jan 19, 2023

What are the 7 areas of wealth? ›

  • Financial Capital. Our society focuses a lot of attention on financial capital as it is our primary tool for exchanging goods and services with others. ...
  • Material Capital. Material capital is just what it sounds like: non-living physical resources. ...
  • Wisdom Capital. ...
  • Nature Capital. ...
  • Spiritual Capital. ...
  • Social Capital. ...
  • Time Capital.

What is the quickest way to build wealth? ›

One of the key ways to build wealth fast -- and over the long term -- is to earn passive income. And one of the best ways to generate passive income is to own one (or several) rental properties.

What is the most effective way to build wealth? ›

Investing puts the money you save to work, increasing your wealth. It's also the most effective way Americans can build their net worth and achieve long-term goals like retirement. The stock market is an ideal place for long-term investments.

What are the golden rules of wealth creation? ›

Spend Less and Save More

However, it is the key to your financial success. Though it is boring, only by spending less and saving will help you through your wealth management process. To create wealth, you need to have surplus funds to invest. Simply exhausting your income and not saving is not going to make you rich.

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