This article is a 6 min read.
5 Powerful Lies that Keep You Trapped in a Cycle of Middle-Class Poverty
“Middle-class poverty” is the state of earning a decent to great salary but living entirely on this income. You live in March with the salary from February; you live in April with the salary from March; and if you don’t receive your salary for April, you’re not sure how you well you’ll be able to live in May.
If you’re in a similar situation and want to get out of that loop of “pay cheque to pay cheque” living, read on:
LIE #1:
The only way to become rich is through earning a huge salary or running your own business.
THE TRUTH:
The only way to become rich is to spend less than you earn and convert a significant portion of your savings to investments. Wealth is decided by expenses, not income (regardless of whether the income is via working at a job or having your own business). This is why entertainers, lottery winners and even heirs to generational wealth with billions at their disposal go bankrupt. This is also why an uncomfortable retirement can happen to a well-paid engineer, but a janitor who was strategic with their money could retire with total comfort.
YOUR ACTION:
Focus on your expenses. It is here you will find the source of funds which you should re-direct into greater savings and investments – the true way to grow wealth.
LIE #2:
Investors are people born rich or lucky enough to have come into money.
THE TRUTH:
Investors are people who were deliberate and consistent savers. If you earn an income, you have enough to begin saving. Once you persevere with saving, investing will follow. In life, the Procrastinator and the Actor are both offered the same opportunities. The Actor tries 10 things and the Procrastinator 1, but when the Actor achieves success on opportunity #10, the Procrastinator says “what a lucky guy”.
YOUR ACTION:
Believe that you are in full control of your life, and not eddying about on the currents of circumstance. It is irrelevant whether your last name is Hilton or you won the lottery. There are investment options out there with attainable starting sums. This is for you. Start today.
LIE #3:
The richer you are, the further away from God.
THE TRUTH:
Proverbs 22:2 says: “Rich and poor have this in common: The LORD is the Maker of them all.” This is a Judeo-Christian source but still undoubtedly a true statement across the world’s religions. God looks to the heart of a person, not the contents of their purse (whether meagre or abundant). Money should never be your ultimate goal and if your pursuit of wealth is tied to money as its own god, then yes, Lie # 3 is in fact your truth. But that has nothing to do with the money – that’s on you.
YOUR ACTION:
Rich or poor, you have the responsibility to keep your morals upright and your priorities straight. Always remember that you earn money to trade it up for experiences, capacity, and assets of greater value than money itself.
LIE #4:
Investing is too risky because you no longer have access to your money and lose ultimate control of it. It’s better to use a savings account to protect your future.
THE TRUTH:
Deciding not to invest is riskier than investing because having immediate access to all of your money via a savings account often works against you as it dissipates due to your weak will (constantly dipping into it), and the ravages of inflation. In the end, you still lose control of your money.
YOUR ACTION:
Make sure you have a detailed “No Investment Needed Plan” that comfortably caters for your retirement. If you’re in any way uncertain about the strength of this plan to see you through life’s ups and downs, you should examine all alternatives before making a decision that has long-term repercussions.
LIE #5:
Investing with a financial institution is not the best way to get rich. Make money with your side hustle.
THE TRUTH:
Investing with a financial institution should not be set in opposition to other ways to earn income. They co-exist. In addition, they are on different rungs of the ladder. After you make money with your side hustle you must be sure to invest the surplus. Remember truth #1: wealth is decided by expenses, not income.
YOUR ACTION:
Research, consult, strategise. The siren song of entrepreneurship has drowned many a sailor. There is a lot of advice out there that makes “being your own boss” sound easy. In reality, it requires just as much, if not more, research, expertise and risk-taking as financial investments.
So what’s the take-away from all of these exposed lies and explained truths?
Investing is necessary to assure yourself of a comfortable life.
Any thoughts that you have which stop you from investing – you must probe them seriously and question their assumptions. Do not simply accept them as truth. This is a favour you must do for yourself.
What are some other powerful lies that need crushing? There are countless more and it was tough to choose just 5 of these devious thought-worms rotting our brains. Share other lies with us (along with the real truths!) and we’ll add them to the list for the benefit of all of our readers.
