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Money Down The Drain: This Is What To Do If You Want To Destroy Your Wealth

23 September 2016 No Comment

canstockphoto26602819Building your wealth in today’s economy has never been more challenging. Interest rates are low; the job market is sclerotic. The system is rigged against the small investor and business owner. And if you’re a young person, you might as well forget it.

Things are bad, relatively speaking. But of course, it’s always ten times easier to make things worse. Here’s how young people today are blowing their wealth and destroying their life chances.

Impulse Purchases

The Bank of Montreal recently looked into how many people make impulsive buying decisions. They found that about 21 percent of men and 13 percent of women made impulsive decisions to buy something they didn’t need. The problem isn’t so much that young buyers are bottoming out their bank balances every month with these purchases. It’s that they’re actively going into debt to do so. And with the costs of bank overdrafts and personal loans so high, they end up paying effective interest rates in the thousands of percent.

Drink Driving

Drink driving is bad for your finances – no surprises there. But the financial ramifications of getting caught go well beyond the fine. Every year, 1.5 million people in the US are stopped on suspicion of being under the influence. And many of those people will end up with a criminal record and be banned from driving. Thus, people with a DUI will find it hard to get well-paid jobs and suffer losses as a result of not being able to drive. The best solution is to seek help from a legal professional, like a Mace Law DUI attorney. Professionals are experts at picking apart the case that’s been made against you and looking for ways to avoid a conviction.

Not Diversifying

Younger people tend not to have the hard-won experience of those who’ve been playing the financial game for longer than they have. They get an idea for something that’s a surefire way to make money. Then they get burned when the value of the asset tanks. Take tech stocks for instance. Thousands of young investors exclusively bought tech stocks back in the late 1990s. But soon afterward, the dot-com bubble burst, and they lost everything. The same happened to a lot of young (and older) investors when the housing crisis hit. Investors saw it as a surefire way to make incredible gains. But in the end, many wound up losing everything.

Divorce

According to the statistics, a staggering 43 percent of marriages end in divorce. It’s bad enough from an emotional and psychological point of view. But it’s arguably even worse from a financial perspective, especially if children are involved. Often the wealthier partner has to part with a significant chunk of cash. And courts can order parents to pay a monthly childcare allowance to their former partner.

Banking On Your Inheritance

Lastly, there’s are a bunch of people who are currently relying on their inheritance to bail them out. According to the Bank of Montreal, 40 percent of people are simply waiting for the money to clear their debts. What they don’t realize is that inheritance can change, and wills can be rewritten on a whim.

 

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