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8 money mistakes to avoid on your way to being wealthy

Steer clear of these bad money habits if you want to be wealthier.
By Grant Cardone |

 

There is a difference between being rich and having wealth. Wealth is the abundance of something in such surplus that no conditions can destroy it. Making a lot of money is one thing, getting rich another. Creating wealth, well, that’s what very few people ever learn. You have heard the expression "get rich quick," but you will never hear "get wealthy quick."

 

Ever hear the saying, “money never sleeps?” The wealthy take this literally and believe that money must work around the clock to grow. The wealthy respect and pay attention to their money knowing that nothing multiplies without attention. They also know money wants to be loved and acknowledged.

 

Related: 9 things rich people do differently every day


The wealthy also avoid mistakes that big income earners and the rich make. Here are some common money mistakes you must avoid to create wealth:

 

 

1. Seeking comfort, not freedom. 

Comfort is the enemy of abundance and the most dangerous element of finances. The entire middle class is built on seeking comfort. The wealthy seek freedom and so much abundance that money is no longer dependent on their efforts. More is the mantra, abundance is the affirmation, comfort isn’t on their menu and freedom is the focus.

 

 

2. Diversification. 

You can never get truly wealthy by diversifying your investments. Wall Street has done a great job of selling the public on this idea of diversifying because it benefits Wall Street.

 

Mark Cuban says “Diversification is for idiots.” Andrew Carnegie said “put all your eggs in one basket and then watch that basket.” 

 

If you want to create real wealth learn everything you can about a space and go all in.

 

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3. Depending on one income flow. 

To create wealth, you must make investments that will create dependable streams of income flows, independent of your main source of income. I use rental income from apartments and partnerships in other companies to throw off passive flows of income. I continue to pay attention to each of these flows to make them stronger. This is not diversification—it’s fortification of wealth.

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4. Comparing to others. 

Comparing your finances to others will ensure you never create wealth. People often compare their situation to some starving nation in a remote part of the world to justify being "better off." Another person’s finances, good or bad, will not pay your bills, won’t fund your retirement and will not provide you peace of mind. Don’t compare your finances to someone else’s.

 

Related: 6 simple strategies for better money management

 


5. Investing in trends.

Avoid investing in the latest and greatest technologies that can be displaced by new technological developments. Warren Buffett invests in electricity, railroads, banks, insurance, soft drinks, food companies and candy. Don't get on the roller coaster. Take the longer, slower ride that guarantees arrival.

 

 

6. Trusting without proof. 

Disregard your feelings when it comes to people and always look for solid evidence. If you are so close to people that you are not willing to ask them to provide evidence, make it a policy not to do business with them.

 

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7. Saving to save. 

It is impossible to create real wealth just by saving money. The banks only pays .25%, so it will take you 40 years to grow your money 10% if rates stay where they are. Dave Ramsey suggests you not carry cash or credit cards because when either is available—you’ll create a reason to use it.

 

 

8. Pretender spender. 

On the other end of the spectrum is the pretender spender. They try to impress others with how they spend money. It’s not their money; it is always someone else’s. Sports cars, expensive clothes, designer bags, shoes, V.I.P. tables—the list is endless.

 

The wealthy are not trying to impress anyone, they are seeking freedom. Sounds good doesn’t it? So what will it be for you: middle class, rich or wealthy?

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You know money won’t make you happy and just getting by won’t either. There is a price to be paid for whatever choice you make. Wealth provides you with options and the person that has options has freedom.

 

Related: The myth of the have-nots

 

Copyright 2014 Entrepreneur Media, Inc. All rights reserved.
This article originally appeared on Entrepreneur.com. Minor edits have been done by the Entrepreneur.com.ph editor.

 

Photos from Flickr (Wealth Safe), Freedigitalphotos.net (Hin255), and Flickr (Michael and NohoDamon)

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