8 Upper Class Money Traps That Ruin Your Wealth
8 Upper Class Money Traps That Ruin Your Wealth
Cindy Lamothe Mon, June 10, 2024 GoBankingRates
Having a higher income doesn’t make you immune to making poor financial decisions. Those in the upper class might have access to more resources, but they can also easily fall for money traps that may jeopardize their wealth.
“One bad money habit that I have noticed among wealthy individuals is overspending,” said Paige Robinson, real estate investor and owner of House Buyers. “With their high income, some people tend to develop a habit of living beyond their means and indulging in expensive purchases or lifestyle choices.”
She added that this can lead to mounting debt and a false sense of financial security, as these people may believe that their high income will always cover their expenses. Below are eight more financial missteps the wealthy should be wary of making.
Believing You Have Unlimited Funds
“The most common money mistake I see wealthy people make is the false sense of security they have in their current bank balance,” said Martin Gasparian, attorney and owner of the law firm Maison Law. “They seem to think the money will always be there, without real awareness that zero is indeed a number, and at some point without proper planning, it may just come up.”
He continued, “So perhaps more of an attitude than behavior, I advise my financial clients to keep a keen eye on their current financial condition, as well as how they intend to stay there.”
Wealthy people know the best money secrets. Learn how to copy them.
Impulsive Spending
Even if someone has a lot of money, it doesn’t give them a free pass to spend recklessly, warned Sherman Standberry, licensed CPA and managing partner at My CPA Coach.
“Some wealthy people can get so used to having plenty of disposable income, that they develop a habit of buying things they don’t or will ever need,” he explained. “If they’re not careful enough, this habit can lead to some financial trouble in the long run.”
Not Vetting Who You Give Money
Another bad money habit that the wealthy succumb to, according to Gasparian, is the habit of handing out money to people who — while may seem in need – -really have no intention of paying them back.
“This includes investments that are not properly vetted or any large-scale financial purchases that lack forethought and true investment purpose.”
Neglecting To Pay Bills on Time
“I have also seen many well-to-do clients with dismal credit scores and a ledger full of late notices,” said Gasparian. “Those with capital may know how much money they have, but if their bills are delinquent or unattended to, this type of behavior leads to an unfavorable financial impression, and if one’s credit history is ever called into question, such debt may come back to haunt someone in a poor way.”
To Read More: https://www.yahoo.com/finance/news/8-upper-class-money-traps-150052645.html