June 26, 2015 7 Comments

Look, something is clearly not working for most of the middle class of America regarding their money. This is the time of year when you and those around you could be tempted to take a break—go out for a drink, spend a weekend at the beach, BBQ with your friends. It reminds me of the great line from Michael Douglas as Gordon Gekko in Wall Street 2, he said, “Money never sleeps.” Now is not the time to relax, no matter how well you did or didn’t do since the beginning of the day, week, month or year. Gordon Gekko was a fictional character, but you aren’t, you are living in the real world. Here are 10 mistakes Gordon Gekko didn’t tell you about money to keep in mind as you finish out this month and move on to the next: 1. Not Paying Attention People tend to confront something only when it becomes a problem. If you want financial freedom you will have to regularly invest time into looking at your finances. What you pay attention to is where you get results. Once a week, on a set day, I sit down with my wife and kids to discuss our finances for 30 minutes. This gets everyone on the same page and demonstrates the importance of having control over our finances as a family. For finances to work you must have everyone paying attention and on the same page. 2. Paying Others First Don’t pay others first, pay yourself first. You are taught not to be self-centered, but when it comes to money, be self-centered—pay yourself and then bill collectors. This seems impossible when you first start, but it works like magic once you commit. You will see yourself actually cutting unnecessary expenses and creating more income to meet your real requirements. 3. No Future Investment Accounts Most people don’t establish future investment accounts and then are baffled why they aren’t able to invest or start a business. Solution: Set up three investment accounts—beyond emergency funding—that you start putting money into every month for future investments. I started doing this when I was 25 years old and didn’t invest in anything until I was 30. I had a real estate investment account, but no real estate; a business account, but no business; and a stock investment account, but no stock portfolio. When it was time to do these things I had the money set aside to do so. 4. No Emergency Accounts One of the biggest mistakes people make is not having an emergency account in place when things go a way other than you planned. As economic events of the past ten years have shown us, unexpected happens. In order to make your wealth recession-proof you should set up emergency accounts that are never touched except in urgent situations. Also, your goal should be emergency accounts of at least 12 months of your income, not the popular 3-month model—and I would prefer 30 months. 5. Hating Debt A common misconception is thinking all debt is bad debt and hating the idea of it—not all debt is created equal. Some debt is good, contrary to what some financial ‘experts’ and politicians tell suggest—remember, the media has an agenda and financial backers to make happy. Debt that is paid off by others or debt that actually generates income is good debt; assume all other debt to be bad. Solution: get rid of all debt that cannot be funded by others or does not directly generate income. 6. Bad Budgeting People spend most of their time budgeting money they have, rather than focusing on creating new money. I spend 90% of my time looking at ways to increase income and how to invest and grow my money and only 10% of my time on how I am spending it. A budget suggests what I am allowed to spend each month, and a financial plan is a road map to creating finances. 7. Not Prioritizing Expenditures Hey, you can get tripped up struggling to meet expenses that aren’t necessary if you don’t have your expenses prioritized. Solution: Take the last 60 days and rate all of your spending on a scale from 1 to 5—5 being most important. Anything not rated a 3 or higher should be stopped immediately. 8. Spending Unconsciously Look, most people don’t have a clue what their money is being spent on. A couple that complains about $4/gallon gas goes and spends $4/day to get 800 TV channels delivered to their home that they don’t even watch. Solution: Make a list of all your spending, and don’t use cash. Either put everything on a credit card or write a check so you have a complete record of each expenditure you make. If you are going to give a homeless person money, write a check so you have a record. 9. Bad Formulas Most people base their income needs on their immediate expenses, not their future expenses, investments and financial goals. Solution: quit calculating your income based on your current spending. Use this magical income formula to get ahead: Future Savings Monthly + Emergency Funding + Current Spending = INCOME TARGET. 10. A Money Shortage Mindset Most people struggling with money think there is a shortage of money on this planet. The reality is that money is plentiful, and even when there are shortages we print more. The very wealthy don’t think in shortages. Change your thinking to think in terms of money being abundant and plentiful—this isn’t some esoteric, new age concept, it’s reality. While money won’t make you happy, surveys suggest that not having money can tear a family apart. Most agree that economic troubles for the American middle class are only going to increase, and most don’t believe the government can solve this problem. A man once told me, “The best way you can help people in need is to not be someone in need.” Help yourself out so you are in a position to help others. Comment below with the biggest money mistakes you have made. Be great, GC

7 Responses

Joy
Joy

December 30, 2016

All the internal links in your post are broken / returning a 404. I thought you might want to know.

Clark Albert
Clark Albert

November 01, 2016

Grant you are a great inspiration , I am 32 and I watch your show every day , learning step by step your advice and it works , by the way when are you having your next sales Class or investment I would like to go

corey Verstraete
corey Verstraete

November 01, 2016

It is all about mind setting, these advices keeps me awake.

William Benibanks
William Benibanks

November 01, 2016

Each day with a new surprise With Grant and all the Cardone family, Every middle of the night I wake up and thinking I have got it and today is going to be awesome then Mr Grant Cardone and his family team show me something new; If GOLD has a value these are more valuable couse they build the value which is appreciated in GOLD.

Grant Thanks for all your support – We really appreciate it! / Tursty Young Entrepreneur from Sweden.

Reg Gilroy
Reg Gilroy

November 01, 2016

Sound advice.
Thanks!

Jim Madden
Jim Madden

November 01, 2016

Grant you awesome man!!! Listen to you all the time!!! WIT, your podcast , your books, and audiobooks!!! I was cutting back trying to cut expenses instead of focusing on making more money. That’s what I need to focus on. I own my own business but not sure if it’s the right vehicle. Wanna start a second stream!!! Awesome article!! Love you too Jarrod!!

Monge Jay
Monge Jay

November 01, 2016

I would like to see you and Dave Ramsey go 1 on 1. It would be very interesting.

Leave a comment