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4 Bad Money Habits That Have Left Millionaires Broke

The fundamental mistake newly-rich people often make is to think they have so much money they can’t blow it all.

John Rampton

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Millionaires are known for having habits like carefully planning and spending their money wisely, constantly educating themselves, waking-up early, and especially for taking care of their health.

But, we have all seen the millionaires who don’t have those self-control habits. Those millionaires who connect-up with a spouse or partner who hasn’t had money before and doesn’t know that money has to be taken care of.

The millionaires who just plain do the opposite of what it takes to make and keep money – and they have bad habits that ultimately leave them broke.

Related: 6 Skills Of Self-Made Millionaires That You Should Be Using, Too

Here are four of those most common habits of millionaires who have gone broke:

1They didn’t track their spending

bill-gates

Whether you’re a freelance writer or Bill Gates, everyone needs a budget. When looking at your money, you should be tracking every penny you spend. Set a budget and know where every penny goes.

I personally recommend watching the little costs that we normally don’t pay attention to.

The R100/month accounts add up over time. The more of them you have, the more money will be going out of your account each month.

While this is a habit that most millionaires follow, millionaires in the process of going broke are not watching and following their money – they do the opposite. They cannot even tell you where it went. These soon-not-to-be millionaires don’t even go-over their bank statements or monthly bills to make sure that there aren’t any unauthorised transactions.

They also don’t look at bills from restaurants, hotels or retail purchases, much less the grocery store, to make sure that they weren’t overcharged. They also don’t compare prices for items they routinely purchase, such as their cell phone bill.

In the end, these millionaires waste a lot of money simply because they don’t track their spending. It may not seem like much of a problem in the beginning, but it can quickly add-up. In the end – well – no money is a problem.

Related: 15 Wise Money Quotes From Millionaires And Billionaires

2They made pricey and emotional purchases

Millionaires who are going broke have a nasty habit of making emotional purchases. For example, when they’ve had a bad day at work they may go on a Amazon spending spree, or they may determine a couple of times a week that they have to have DoorDash because they are depressed about something and don’t want to cook.

Most millionaires are frugal and known to be careful with their spending. They avoid making emotional purchases because millionaire emotional purchases tend to be a bit more spendy than Amazon. These are often the expensive “sink the boat” type purchases.

Remember M.C. Hammer and his gold-plated driveway gates emblazoned with the phrase “Hammer Time” and his 21 racehorses? He would have done better to sit on the couch with a quart of Häagen-Dazs Ice Cream and zone out to an old movie.

One interesting thing about the millionaires who stay rich is that many use coupons, look for the best bargains, and cause a scene if they’re overcharged. Then, they’ll turnaround and go on a luxurious European vacation or purchase an item like a massive diamond ring. One of my best friends is a multi-billionaire. Last week I was over at his house and heard him on the phone arguing with a company over a R400 charge.

Be frugal no matter what stage of life you’re living.

Related: (Slideshow) Best Advice From Self-Made Millionaires

3They didn’t have multiple streams of income

Eike Batista,

Eike Batista,

Author Thomas C. Corley’s five-year study of self-made millionaires discovered that a majority of them have multiple streams of income. In fact, 65 percent of the millionaires he studied had three streams of income, while 35 percent had four streams.

However, not all millionaires follow this multiple stream rule. Take the case of Eike Batista, a Brazilian businessman who was worth an estimated $35 billion. Batista truly believed that nothing could hurt or even slow down his oil and gas business, OGX. This company was his crown jewel. But when oil production slowed he was forced into bankruptcy.

“Having multiple income streams makes a lot of sense,” says Corley. “When one stream is negatively affected by systematic economic downturns, of which you have no control, the other streams can come to the rescue and help you survive the downturn, without seeing your lifestyle dramatically affected.” This also means that you follow the rule of, “not putting all of your eggs in one basket.”

Related: 15 Ways Millionaires Manage Their Money That Make Them Richer

4They were Impatient, aggressive investors

Unlike long-term investors who are patient and remain calm, aggressive investors use “The Wolf of Wall Street” as their playbook. They pick stocks on a hunch and then unload their investments panically when things start heading south.

Even worse, because they were successful making millions, they believe that don’t need the advice of educated investors and rely on their own street smarts or delusions of grander.

The bottom line is, educate yourself about your money.

Protect your money, watch your money, take care of your money so that you, too, won’t be a broke millionaire.

This article was originally posted here on Entrepreneur.com.

John Rampton is an entrepreneur, investor, online marketing guru and startup enthusiast. He is founder of the online invoicing company Due. John is best known as an entrepreneur and connector. He was recently named #2 on Top 50 Online Influencers in the World by Entrepreneur Magazine and has been one of the Top 10 Most Influential PPC Experts in the World for the past three years. He currently advises several companies in the San Francisco Bay area.

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Personal Finance

(Infographic) The Financial Advice Millennials And Gen Zers Want To Know

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful. And that starts with getting the right advice.

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Whether it’s saving for retirement or paying off credit card debt, money management can be a challenge. Of course, different people have different concerns – and that often comes with age. While a 60-something baby boomer might be organising their savings for retirement, your 20-something millennial might be focused on paying off student loans.

In a recent study, financial intelligence company Comet surveyed more than 1 000 people to uncover the top financial concerns of various age groups, as well as the financial advice millennials and Gen Zers want to know and what they hear instead.

Overall, saving for retirement was the top concern across all age groups, with saving for an emergency and affording monthly bills following in second and third. However, it’s no wonder these are some of the most pressing worries – according to the research, 23 percent of people admit they don’t have a savings account, and 43 percent reported not being on track towards their retirement goals. Perhaps that’s because they didn’t hear the right advice growing up. At least that might be the case for Gen Zers and millennials.

According to the research, these young people want to learn things such as how the stock market works, how to manage an investment portfolio, how to invest in real estate and how to build credit. Instead, they’re simply told how to create a budget, save for retirement and pay credit card bills in full every month.

Related: 7 Critical Things Your Financial Advisor Must Meet

Having a grasp on your financials is tricky, but it’s crucial if you want to be successful and comfortable. To learn more, check out Comet’s infographic below.

1532099434_2-cents-worth-infographic

Related: Financial Wellness Coach Nelisiwe Masango Shares Retirement Wealth Advice

This article was originally posted here on Entrepreneur.com.

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Personal Finance

14 Ways To Make Quick Cash On The Side

If you need money quickly, here are some solid ideas.

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Need to make some fast money on the side, whether it’s to pay off a credit card or to make your rent?

Keep in mind, making quick side cash isn’t about making a lot of money or getting rich. It’s about getting a shot of capital to help tide you over and put something extra in your pocket. However, some of these side-income ideas can build up your wealth over time. There’s many ways to accomplish this: By participating in the gig economy, the sharing economy, online sales networks, passive income techniques and more.

If you’re looking to make extra money in a relatively short period of time, check out these 14 slides.

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Personal Finance

Take Advantage Of Financial Democracy Made Possible By The New Stock Exchanges

Why should financial democracy matter to entrepreneurs?

Etienne Nel

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Because it creates a society able to afford products and services. Without it, even the innovative products and services that are entrepreneurs’ bread and butter will fail.

What is financial democracy, exactly?

It’s both the right and the ability of the (wo)man in the street and business people to make the decisions that affect their financial circumstances.

Financial democracy does not automatically follow political democracy. For almost 25 years after South Africa’s political transformation, the exclusiveness of our financial markets continued to deprive the vast majority of South Africans of the means to invest, save, and build wealth. South Africa has, therefore, never developed a retail stock exchange environment. So, it has deprived the majority of small and medium sized business of access to capital.

For entrepreneurs to truly flourish, they need a mechanism that easily and seamlessly connects the investor pool with every size of business. And, they need affordable ways to enter both the retail and institutional market.

In short, they need stock exchanges. Ones on which listing takes weeks rather than years, doesn’t break the bank for listing fees, and provides the shortest route to the largest possible potential investor base.

That’s not been possible in the stock exchange monopoly that existed for six decades. Now, it is.

What’s changed?

We now have four new stock exchanges. The resulting competitive environment will significantly reduce the cost of listing – and the cost for investors of buying and selling shares.

Instead of restricting share trading to people or organisations who already have tens of thousands of rands to invest or millions to spend on listing, by licensing four new stock exchanges, the Financial Services Conduct Authority (FSCA, formerly the FSB) has recognised that most financial decisions do not call for high levels of education.

Related: The Role Of Foreign Exchange In The Economy

Most people know how to spend their own grocery money. Most know that it’s better to keep their R1 000 monthly income in a coffee jar than spend R50 of it on bank account fees. People who can barely read and write are immensely skillful at manipulating air time deals to their advantage.

There is significant financial savvy in all social strata.

In the same way, although the mechanics of bookkeeping and accounting may be unfamiliar territory to many entrepreneurs, most have a clear understanding of the difference between profit and loss.

The FSCA has therefore enabled democratisation of the financial markets by enabling the broadest possible spectrum of entrepreneurs and investors to use stock exchanges to participate in and contribute to the economy – on their own rather than prescriptive terms.

How do you take strategic advantage of this democratisation?

  1. Base your business strategy on people’s instinct for making decisions in their own best interests. Trust financial decentralisation, such as one sees in crowd funding and in digital environments such as block chain, where people would far rather trust one another than institutions and governments. This is democracy innately at work in the financial environment and it’s accelerating organically as digital technologies give people more means and the confidence to help themselves – to information and opportunities. Ride the wave.
  2. Tap into people’s desire to innovate. Consumer organisations have proved that letting people interactively help them develop products is a powerful growth engine. Apply the principle by letting people grow your business by buying shares in it, giving you capital and themselves a platform on which to build wealth.
  3. Remember, the ultimate loyalty reward is equity.

Your financial democracy business plan

Look to list on an entrepreneurial stock exchange; one that was founded by entrepreneurs on entrepreneurial principles.

That means: A stock exchange that is already built on financial democracy and decentralisation. One that has, at its core, a single operational concept that keeps things simple for you, automatically gives you an immediate competitive advantage, and, ensures that no matter what your business needs in terms of attracting capital, the exchange can provide all the options in the same, consistent way.

What does such an exchange look like?

It has fintech capabilities. So:

It slashes your listing costs. It achieves this, among other things, by enabling you to populate an electronic prospectus, demonstrating your financial viability, and self publish.

It gives you control by having the granularity and agility to impose relevant governance right down to the individual investor. You get to decide the types and quantities of investors you want to attract. This also enables you to achieve black economic empowerment in perpetuity.

It leads the world by clearing and settling trades in T+0. No-one in the value chain has to hold large sums of money for days following a transaction. Small transactions become profitable. Investors don’t have to risk their life savings on a single large trade. A retail market is opened. An investment and savings culture is entrenched. The economy expands. Your business grows steadily.

It enables anywhere, any time trading via a mobile app that allows investors to see share value in real time. See economy expansion point above.

It integrates processes and procedures, simplifying them and ensuring rapid onboarding of issuers and, therefore, speed to market with new concepts and alignment with the digital economy.

It operates a principles-based regime. So:

It treats you, as an executive, with respect. It’s not prescriptive. It does not insist on excessive oversight, allowing the Companies Act to guide you to sustainability.

It does not attempt to squeeze your company into a pre-defined business or listings format. It recognises and works with your uniqueness.

It obviates the need for expensive specialist listings advisors.

It focuses on financial inclusion and access. So:

Shares can be bought and sold for no more than R1 000. See economy building point above.

Related: 27 Of The Richest People In South Africa

The new world of stock exchanges is integrated, synergistic, holistic, organic, self-fulfilling

Decentralisation of financial control, democratisation of opportunity leads to a whole new economy. One in which, for instance, a taxi operator can finance a minibus through a company in which his purchase gives him shares. A single purchase gives him two benefits: a vehicle on which to found his business and a longer-term investment in shares that he can trade. The funding company gains liquidity through access to a wider base of investors while being able to control who buys and sells and the conditions on which trading takes place. Increasing black equity in business becomes an organic, natural, self-perpetuating process.

Everyone wins in a decentralised, democratised financial market. And it’s the stock exchanges that drive the process.

As an entrepreneur, can you afford to ignore the acceleration that listing could give your business growth?

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