This article is a 6 min read.
5 Powerful Lies That Can Keep You Trapped In A Cycle Called “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 in 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 are deliberate and strategic with their money. If you earn an income, you owe it to yourself to begin investing a portion of your savings. 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.
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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.
If you’d like some help with planning for your future goals (education, fun, passions, philanthropy, and retirement) don’t hesitate to schedule a call with us. One of our Relationship Managers will be glad to assist you.
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.
28 Comments
Hi
I have read a few financial books so these lies were exposed a couple of years now.
Hi Rodney, that’s great to hear! Do you find the lies / habits easy to ignore and avoid or it’s a work in progress?
Lie#4 & 5 for many years have been a deterrent for me , and the fact that you mush have big bucks to start with.
Hi Tysha, Lies 4 & 5 are similar in that savings accounts and having your own business are great things on their own, it’s just that you need more than that. Investing bolsters your financial security. We hope they’re not a deterrent any more and you’re now more open to investing.
Lie number 4 has at the forefront for me, investing is risky and I’m not sure I want to take the risk of losing whatever I put it
Hi Sharon, we hear you. Thankfully, there’s a wide range of investment types – some of them with principal guarantees which mean you will not lose what you put in. The trade off will be that you may not earn very much more than a savings rate, but it’s still an option there for you. Investing isn’t inherently risky – with robust advice and planning, you can make safe but still fruitful decisions.
Lie number 4 is what I heard all my life, it’s the reason I afraid of investing….. it’s hard to loose the little that I have.
Hi Marissa, my name is Anna and I’m a Relationship Manager here at Firstline. If your risk tolerance is conservative you can have your hard earned money invested in a conservative type of portfolio. An investment can be tailored to your specific financial needs and objectives. I hope this encourages you to seek out further information.
lie # 1 for sure I still can make enough money
Lie number 1and 2 I always believed. Do I need to get rid of my debts in order to invest and how much money is needed to start an investment
Hi Candice, there are two distinct schools of thought with respect to debt & investing. Very popular American finance guru Dave Ramsey insists that you first clear all of your high-interest, short / medium-term debt before starting to invest. For our part, we share the more moderate review of several other financial gurus that you should make arrangements to work on both matters, though dependent on your personal circumstances, one may at times take precedence over the other. But in short, there are as many answers to this question as there are people because our investment journeys are all different. If you’d like to have a no-obligation, no-payment introductory call with us, you can write to info@firstlinesecurities.com. We’ll respond, we promise.
As for how much money is needed to start and investment with us at Firstline specifically, it’s TT$25,000.
Have a great week.
Good day, I am familiar with all of those lies but I still have to associate with the bank, since my money goes. I prefer to have dealings with the credit union though because I received better service.
Lie #4 I invest so much lost all till I have no more to invest
Hi team.. all 5 lies have been my reality… and have been what I have been discussing with my mate all along out of agonising frustration.. I am qualified and still no job after 5 years of completing an mba.. really, properly caught and badly wounded in this trap… I want out!
Hi Nicole, this is really tough to read so we know how tough it must be for you to live. While we don’t have any magic bean or potion to immediately improve your situation, one of the best things we think about wealth creation is that it’s a specific process. If you do steps ABC, steps 123 and so on, you *will* make a difference in your life. So, nothing fancy and no need for luck or chance. But once you have access to these steps, and the self belief and dedication to see them through, there will definitely be light at the end of the tunnel – the tunnel you would have dug yourself out of by smart work and keeping positive. If you would like to speak to one of our colleagues, even if you’re not ready at this time to actually start investing, let us know and we’ll definitely get in touch. We’ll help you however we can.
I would like to know how to earn extra income
Will you be suggesting investment in Bitcoin or Dodgecoin or trading in Forex to increase assets?
Hi Satie, this article on cryptocurrencies sets out our current position on these matters: https://firstlinesecurities.com/crypto-craze/
In short however, investment in these assets or via forex trading should be undertaken when your appetite for risk is relatively high.
Lies 4&5 i’m just fed up of living from pay cheque to pay cheque
Lie #4
As much as it is fair to say you look at your expenses. These expenses become even more difficult to re divert when you have a family to think about. The vast majority of investors require larger initial start fund and promise miniscule returns and so makes it very difficult to invest for those with already tight budgets. And how does one not dip into his accessible funds when a mandatory expense circumstance pops up? I am open to being informed about options that may be at my disposal that i may not be aware of though.
I am aware of the lies and am interested to learn despite my current situation as a single parent.
I struggle with 1,2&5
I have noted the 5 lies spoken about and after reading them my first feeling is yes maybe this investing matter is something that I could seriously consider as I am in the category of living from pay cheque to pay cheque. However when I saw the sum to start investing being $25,000 I saw my hopes in investing crash for want of a better expression. Is there an avenue to accommodate budding investors who does not have access to 25,000 but may have a much smaller sum? Or would one of your recommendations be that the person takes a loan for say 30,000, invest that sum and then use whatever gains on that investment to help pay off the loan? Thanks in advance for your response.
Hi Denise, we do have an avenue to accommodate budding investors that we call the Road to 25k. On this road, we focus on your savings plan all with a target to move on to a full-fledged investment portfolio when you attain the minimum starting investment amount for our boutique portfolio management service. One of our colleagues will be in contact with you soon.
I watched the video. Yes it was very well put together, informative, easy for the layman to understand and it held my interest from the first minute to the last. The practical experiences talked about was truly an inspiration for me. Thank you Firstline Securities I am more than interested now in investing than before, but my problem is that I don’t have that 25,000 at this time. I can certainly say that as soon as I have that sum I would be marching to your office to make my investment and should the good Lord bless me with lotto winnings, I would definitely be giving Ms. Hernandez a call. Thanks again for all this valuable info.
Thanks Denise! We’ve attempted to reach you to share further information about our Road to 25K program. Hopefully you see our messages soon (via email).
Do you give access to equity based funds? I have specific investment needs.