{"id":1326,"date":"2025-01-03T15:53:26","date_gmt":"2025-01-03T15:53:26","guid":{"rendered":"https:\/\/thethinkingplanet.com\/?p=1326"},"modified":"2025-01-03T15:53:29","modified_gmt":"2025-01-03T15:53:29","slug":"a-short-article-on-5-most-common-money-traps-that-makes-you-poor","status":"publish","type":"post","link":"https:\/\/thethinkingplanet.com\/a-short-article-on-5-most-common-money-traps-that-makes-you-poor\/","title":{"rendered":"A short article on 5 most common money traps that makes you poor"},"content":{"rendered":"\n<p>Hello readers! In today\u2019s blog, we\u2019ll discuss <strong>five reasons why most American families never build wealth and fail to get rich.<\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/thethinkingplanet.com\/a-short-article-on-5-most-common-money-traps-that-makes-you-poor\/#Reason_1_Investing_in_Real_Estate_and_the_money_traps\" title=\"Reason #1: Investing in Real Estate and the money traps \">Reason #1: Investing in Real Estate and the money traps <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/thethinkingplanet.com\/a-short-article-on-5-most-common-money-traps-that-makes-you-poor\/#Reason_2_Not_Investing_Enough_in_Mutual_Funds_and_Stocks\" title=\"Reason #2: Not Investing Enough in Mutual Funds and Stocks\">Reason #2: Not Investing Enough in Mutual Funds and Stocks<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/thethinkingplanet.com\/a-short-article-on-5-most-common-money-traps-that-makes-you-poor\/#Reason_3_Paying_Medical_Expenses_Out_of_Pocket\" title=\"Reason #3: Paying Medical Expenses Out of Pocket\">Reason #3: Paying Medical Expenses Out of Pocket<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/thethinkingplanet.com\/a-short-article-on-5-most-common-money-traps-that-makes-you-poor\/#Reason_4_Retiring_Early\" title=\"Reason #4: Retiring Early\">Reason #4: Retiring Early<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/thethinkingplanet.com\/a-short-article-on-5-most-common-money-traps-that-makes-you-poor\/#Reason_5_Not_Prioritising_Your_Own_Growth\" title=\"Reason #5: Not Prioritising Your Own Growth\">Reason #5: Not Prioritising Your Own Growth<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reason_1_Investing_in_Real_Estate_and_the_money_traps\"><\/span><strong>Reason #1: Investing in Real Estate<\/strong> <strong>and the money traps <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>We are all very attached to real estate. Now, I\u2019m not saying you shouldn\u2019t buy real estate. I\u2019ve always lived in rented houses, so I understand the value of owning your own home. It\u2019s not just a financial decision; it\u2019s an emotional one, and that deserves respect.<\/p>\n\n\n\n<p>So, I\u2019m not against buying real estate, but I\u2019m critical of the assumptions we make about it. When we buy a flat, we think we\u2019ve invested in real estate. However, the true component of real estate is the <strong>land<\/strong> itself. The rest is an experience.<\/p>\n\n\n\n<p>When you purchase a flat, only a small portion of your money actually goes toward the land. The rest goes into amenities, the building&#8217;s prestige, the address, the landmark status of the property, the society, and the facilities\u2014which are not &#8220;real&#8221; in the true sense of real estate.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"900\" height=\"500\" src=\"https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.1-1.jpg\" alt=\"money traps \" class=\"wp-image-1328\" srcset=\"https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.1-1.jpg 900w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.1-1-300x167.jpg 300w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.1-1-768x427.jpg 768w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.1-1-600x333.jpg 600w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<p>For instance, if you buy a flat for $115,000, check how much square footage of land you actually get and then compare it to the local land prices. It\u2019s possible that in a $115,000 flat, only $25,000\u2013$35,000 is the actual land value. The remaining $80,000\u2013$90,000 is spent on lifestyle, safety, security, and enjoyment, which don\u2019t necessarily appreciate in value.<\/p>\n\n\n\n<p>People often assume that if a flat costs $115,000 today, its value will grow to $575,000 in 20 years. But in reality, it might only rise to $345,000. The appreciation comes mainly from the land, while the rest of the investment\u2014$25,000 to $35,000\u2014depreciates because newer, better buildings, societies, and amenities emerge.<\/p>\n\n\n\n<p>So, I\u2019m not saying you shouldn\u2019t buy a flat; just keep in mind that your investment may not fully appreciate. Only the land value is likely to increase, while other components will depreciate over time. Plan your future net worth growth accordingly.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reason_2_Not_Investing_Enough_in_Mutual_Funds_and_Stocks\"><\/span><strong>Reason #2: Not Investing Enough in Mutual Funds and Stocks<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Many of us watch a few financial videos, invest a bit in mutual funds, and feel financially aware. But in reality, we are not.<\/p>\n\n\n\n<p>If you\u2019re not allocating a substantial portion of your net worth to equities, your money isn\u2019t going to grow as it should. For example, let\u2019s say your total net worth is $100,000. You own a car, a flat, and some other assets, but you invest only $2,000 in stocks or mutual funds. Then you claim you\u2019ve \u201clearned\u201d that mutual funds are the right choice or that you\u2019re financially aware.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"900\" height=\"500\" src=\"https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.2-1.png\" alt=\"\" class=\"wp-image-1329\" srcset=\"https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.2-1.png 900w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.2-1-300x167.png 300w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.2-1-768x427.png 768w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.2-1-600x333.png 600w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<p>If you don\u2019t invest meaningfully in fast-appreciating assets like equities, especially when you\u2019re young or middle-aged, you won\u2019t build significant wealth by the time you reach the end of your working life.<\/p>\n\n\n\n<p>Simply investing in mutual funds isn\u2019t enough\u2014you need to invest substantially, especially when you\u2019re young. This is crucial.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reason_3_Paying_Medical_Expenses_Out_of_Pocket\"><\/span><strong>Reason #3: Paying Medical Expenses Out of Pocket<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If you\u2019re paying a significant portion of your medical expenses out of pocket, that money comes directly from your financial planning reserves.<\/p>\n\n\n\n<p>We are aware of basic life and health insurance, but there are many medical expenses we could insure against to reduce out-of-pocket costs. Unfortunately, we don\u2019t know enough about these options.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reason_4_Retiring_Early\"><\/span><strong>Reason #4: Retiring Early<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This problem is growing rapidly today. The idea of <strong>financial independence and early retirement (FIRE)<\/strong> has become very popular, but it seems a bit dangerous to me.<\/p>\n\n\n\n<p>Many people aggressively try to retire early, often compromising their present lifestyle significantly to escape work as soon as possible. However, you need to realise that by doing this, you\u2019re sacrificing the best years of your life.<\/p>\n\n\n\n<p>This approach can lead to a lot of stress in the present. While planning for the future is good, stressing yourself out excessively in the present is not.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"900\" height=\"500\" src=\"https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.3-1.png\" alt=\"\" class=\"wp-image-1330\" srcset=\"https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.3-1.png 900w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.3-1-300x167.png 300w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.3-1-768x427.png 768w, https:\/\/thethinkingplanet.com\/wp-content\/uploads\/2025\/01\/3.3-1-600x333.png 600w\" sizes=\"(max-width: 900px) 100vw, 900px\" \/><\/figure>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reason_5_Not_Prioritising_Your_Own_Growth\"><\/span><strong>Reason #5: Not Prioritising Your Own Growth<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This is the most important reason. Once we start earning, we focus on keeping our parents, family, friends, and partners happy. In the process, we forget to prioritise ourselves.<\/p>\n\n\n\n<p>As a result, we lag behind in wealth creation. Being emotional is a wonderful quality\u2014as long as it doesn\u2019t interfere with your personal growth and goals.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\" \/>\n\n\n\n<p>These are the key reasons why many families struggle to build wealth. Be mindful of them as you plan your financial journey!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Hello readers! In today\u2019s blog, we\u2019ll discuss five reasons why most American families never build wealth and fail to get [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":1327,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","_EventAllDay":false,"_EventTimezone":"","_EventStartDate":"","_EventEndDate":"","_EventStartDateUTC":"","_EventEndDateUTC":"","_EventShowMap":false,"_EventShowMapLink":false,"_EventURL":"","_EventCost":"","_EventCostDescription":"","_EventCurrencySymbol":"","_EventCurrencyCode":"","_EventCurrencyPosition":"","_EventDateTimeSeparator":"","_EventTimeRangeSeparator":"","_EventOrganizerID":[],"_EventVenueID":[],"_OrganizerEmail":"","_OrganizerPhone":"","_OrganizerWebsite":"","_VenueAddress":"","_VenueCity":"","_VenueCountry":"","_VenueProvince":"","_VenueState":"","_VenueZip":"","_VenuePhone":"","_VenueURL":"","_VenueStateProvince":"","_VenueLat":"","_VenueLng":"","_VenueShowMap":false,"_VenueShowMapLink":false,"two_page_speed":[],"footnotes":"","_rishi_post_view_count":43},"categories":[1],"tags":[],"rishi__cb_customizer_meta":"","comments_count":"2","_links":{"self":[{"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/posts\/1326"}],"collection":[{"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/comments?post=1326"}],"version-history":[{"count":1,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/posts\/1326\/revisions"}],"predecessor-version":[{"id":1331,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/posts\/1326\/revisions\/1331"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/media\/1327"}],"wp:attachment":[{"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/media?parent=1326"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/categories?post=1326"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thethinkingplanet.com\/wp-json\/wp\/v2\/tags?post=1326"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}