10. Investing in get-rich-quick schemes

Many people do not want to put the required financial effort to make money. This is why they are usually looking for an opportunity to make millions with the least effort and time.

As they do so, they invest in fraudulent investment schemes that promise them so much using very little. They put everything they have in it and lose all of it.

In investment, when a deal is too good, think twice. Most probably, someone wants to take your money. When it is too good to be true, it probably is not.

Always do your due diligence and trust your instincts. Do not be greedy for gain and believe everything people tell you.

As Warren Buffet says, be paranoid when others are greedy and greedy when others are paranoid.

11. Not borrowing to invest

This is also a great financial mistake. Borrowing is part of financial growth. No one can grow without debt; at least not fast enough.

When you have an asset that brings you cash, say a business, you will need to grow it. At this point, you can get a loan to finance the growth.

Observe the following rules when getting into debt:

·     Borrow only what you need.

·     Invest everything you borrow; avoid consuming from the debt.

·     Do not borrow just because someone else is ready to lend.

·     Always negotiate the terms of the debt. I.E the interest rate, repayment period, type of loan, etc.

·     Invest in a project with an ROI that is higher than the rate of interest of the loan.

If you can properly manage debt for growth, you can easily gain financial abundance.

12. Not calculating ROI when investing

ROI stands Return of Investment. It is calculated by dividing the return (Profit) by the investment (Capital invested). The higher the ROI, the better.

When making any investment, make sure to calculate the ROI. If you have two potential projects that you are comparing, calculating ROI is a must.

In most cases, it will not be clear how much you will get from a certain investment. This is where financial forecasts come in. This are educated guesses based on data from the industry and the prevailing conditions.

13. Not giving money

Giving is a great financial principle of abundance. This is not just a spiritual principle but a financial one too.

When you give, you are communicating with your mind that you are not poor. When the mind holds on to that notion, the law of attraction will set in.

The law of attraction states that we attract into our lives what we think about most of the time. If you think that you are poor, you will attract poverty. The vice versa is also true.

This is a rule I purposed to follow and it does not fail.

The following are important when giving:

·     Give when you are not ready; do not wait to have excesses for you to give. Give even when you are running on a deficit.

·     Give out of gratitude. The best way to do this is to give where you are nourished.

·     Expect to receive after giving. This faith will bring financial resources to you.

In all you do, make sure you become a giver.

Final thoughts on financial mistakes

If you can avoid these financial mistakes, you will be on your way to financial abundance. It does not matter how old you are or your status in society, if you make financial mistakes, you will reduce your financial wellbeing.

Let’s recap. These are the 13 financial mistakes everyone should avoid:

·     Lack of financial goals.

·     Lack of financial knowledge.

·     Spending more than you should.

·     Buying liabilities using your salary.

·     Consuming what you do not have.

·     Buying more liabilities than assets.

·     Not having multiple sources of income (MSIs).

·     Increasing your spending when your income increases.

·     Not taking financial risks.

·     Investing in get-rich-quick schemes.

·     Not borrowing to invest.

·     Not calculating ROI when investing.

·     Failure to give money.

All the best as you work on your financial goals.