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What Causes Poverty – Four Factors To Avoid

Focuses On The Opposite Side of Wealth

Knowing the four factors that what causes poverty, we can look at the opposite side if we want to work hard to become rich and need to do something. This article will systematically introduce these four factors that cause poverty.
In the article of WeChat’s circle of friends, some of the headlines are particularly glaring and jealous – “Poverty is a disease, but it is also inherited.” “Why are you so calm and so secure?” Articles with similar titles are usually forwarded in large numbers, creating a “100,000+” explosion article.

Why Are We Always Feel Lacking Money?

Why do we feel that we are short of money? In fact, for money, we have misunderstandings that we can’t imagine. Even many times, it is we who have prevented ourselves from becoming a rich man.

Is this real?

Maybe you will ask yourself this way. We are not trying to study and work every day, just to live a happy life with our family?

Am I really doing the right thing with the money?

The reason why we have some misunderstandings about the rich people is often, because we and the rich have different ways of thinking.

Buffett’s decades-long partnership, Charlie Munger’s investment philosophy, and wisdom have influenced many people. Two very famous words.

In the first sentence, “If I know where I will die, I will not go to that place.”

In the second sentence, “If I want to help a country like India, how can I help it? I should first consider what will hurt it, as long as I don’t do things that will hurt it, just help it.”

 

These two sentences illustrate the reverse thinking in investment. If we want to become rich, we may first use reverse thinking to figure out what will make ourselves poor and then avoid them.

Let’s look at an arithmetic problem that tells us very intuitively why we should pay special attention to the opposite side of wealth, the factors that will make us lose our wealth.

Suppose you take 10,0000 yuan to invest and invest in a stock, you can have a daily limit today. But the next day it performs exactly the opposite – down limit. Then, after a daily limit, have you earned or lost? A little calculation, we know the loss. Conversely, it is difficult to make up for the losses caused by the down limit before the daily limit. The loss beforehand also affects the growth of wealth.

It should be said that no matter how much money you make through investment, as long as there is a considerable mistake in size, it is very likely that the accumulation in front will fall short.

Daniel’s Story

Let’s look at an example of life, which is a bit extreme, you will find the answer to a question what causes poverty.

Daniel is 23 years old and has just graduated from college. He hopes to save 300,000 yuan as a venture fund when he is 30 years old. Currently, he is working at an Internet company in Shanghai with a monthly salary of 10,000 yuan and an average wage increase of 10% in the industry. After work, he basically achieved financial independence and felt that the future was within reach.

At this time, he began to have a variety of enjoyment needs, leading to “moonlight.” Most young people are similar to him at this stage. He began to fall in love at the age of 24. In order to make his girlfriend happy, he started to use credit cards, revolving loans, and the money was gone.

At the age of 25, their relationship has stabilized, and the girlfriend said that it is better to travel once a year. However, he had an accident while traveling, so that he had no income for six months. At this time, Daniel can only take out all the money he invested, because he is still losing money, so the original 50,000 yuan became 40,000 yuan. When Daniel took the 40,000 spent six months, there was no more money on his body.

27 years old, they talked about three years of love. The girlfriend said: “Let’s get married!” Both had a warm wedding, and the money received and the money spent on flat. After getting married, they found that colleagues around them bought a good car and felt that it was necessary to buy a good car. They took a look at the CLK of Mercedes-Benz and found that the down payment was more than ten thousand yuan, and the monthly payment was more than 8,000 yuan. After buying a car, they found that there is not much left the money.

At the age of 29, their baby was born and the annual expenditure was 30,000 yuan. His parents are sick and their bodies are not very good at this time. This year’s expenditure has increased by about 50,000 yuan.

At this stage, Daniel has not found anything wrong. By the time he was 30, Daniel took out his passbook and found that the grand goal and status quo he had set up was very different. There were only 50,000 yuan in the bank card.

This is a true story.

Four Factors That Contribute to Poverty

The example of Daniel is not a case. In the past few years, we have helped many small partners around us to do financial management and planning and found similar situations are very common.

Lack of planning for life, or some sudden things that make people feel very weak.

I used to think that there was a lot of time and a lot of dreams, but when I look back, the money and resources in our hands are not enough to realize the dreams and wishes.

Going back to the original topic, when we want to achieve financial freedom or achieve a rich state, we must first think about what is the obstacle to our success.

The Accident

For example, when Daniel went out to travel, he had an accident, could not work, and had no income. He is going to the hospital and has medical expenses. He wants to use money and can only raise money when the investment is still in a loss. An accident brought about three kinds of losses.

The Disease

Needless to say because of illness, there is a lot of such examples around us.

Unplanned Expenditures

There is a versatile four rules in life, if you don’t, you can buy, drink more water, and try again. These are simple and straightforward methods. When you fall in love, you feel that you have problems. If you have a headache or a stomachache, you should drink more hot water. If the digital product is black or blue, restart it. And If you like to buy, it is actually unplanned expenditure. This is a wayward lifestyle. Although it makes you feel relaxed at the moment, it will actually kill many opportunities to accumulate wealth.

A Fragile Investment System

It is important to have a good investment system or logic that will allow you to invest in a risk-controlled environment. The risks are relative, such as tightrope, which is very dangerous for people who have not received any training. However, for acrobats, the risks are basically controllable.

Knowing these four factors that cause poverty, we can look at the opposite side if we want to become rich and need to do something. We must always have a concept in our mind that these four factors of poverty are what we should try to avoid. We should also reflect on whether or not we are currently affected by them.

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