Money traps are what keep people from becoming wealthy, people generally blame house prices their low income job or taxes. Although Ireland has some of the highest taxes in Europe this is still probably not the reason most people never accumulate wealth. Today we are going to list some of the biggest money traps that may be keeping you from becoming rich.
We have all seen the neighbours new car the BMW or the Mercedes you do the math and with the money you would get for trading in your Toyota you could afford that dream car you always wanted. In truth you could probably afford to make your payments but the savings that could be made by just upgrading your own brand can be significant. The point here is that by not going for the luxury brand car you could save thousands a year that could be invested to create some real wealth.
2. New Tech
Every year almost any tech company you can think of brings out the newest models of their products. Buying these products on a yearly basis has become a routine for some fans. Phones are probably the best example of this with companies like apple releasing a new Iphone every year and often increasing the price. When you break it down these products change very little and holding on to your old phone for 3 to 5 years can save you quite a lot of your life time.
3. Not Investing
When you do have some money leftover now that you're no longer over paying for your car or splashing out for the newest tech the next thing to do is figure out what to do with all that money. The majority of people tend to put their extra income into savings accounts. Saving accounts only return about 1% per year this means that you may actually lose money to inflation. Investing into a low cost broad market index fund is the best way for most people to create wealth and passive income (to learn more about investing in Ireland check out our other posts).
There are many money traps and we just touched on a few here. Breaking out of money traps and managing your money better can make a bigger difference to your wealth than even increasing your income. This is not financial advice just our opinions and insights to learn more about all things finance and crypto give a like on face book and check out our other posts.