Investor Jones

Who or what are Wealth Assassins? Wealth Assassins are businesses and banks that are constantly trying to kill your financial health. Read on for my list of the 5 factors that can be most damaging to your wealth.

1. Cars – one of the biggest wealth killers. Most people end up taking loans to buy the latest and greatest car. The only two advantages of buying a new car are that they are less likely to break down and that you’ll get a few years under warranty. The major disadvantage of buying a new car is that it will rapidly depreciate in value. This could run into thousands of pounds of dead cash within a few years. What’s even worse is that if you took out a loan to pay for the car, you’ll be paying interest on top of the depreciation. It’ a little like owning a house with negative equity. While you could also buy a cheaper, older car, the downside is that you could be spending money on breakdowns, repairs and spare parts, but the car is likely to be fully depreciated.The solution to this dilemma is in striking the right balance between a new and an old car. For instance, many rental companies sell cars with a few thousand miles on the clock and an excellent service history. Buying a car like this strikes the right balance between old and new and offers you a reasonably well depreciated asset.
2. Bank Credit/Loans – If you don’t require a loan then don’t take one. Banks love to give out money, and the longer you’re in debt with them, the more money they make. Interest rates often vary, so if you need the money, then don’t pay a fraction more interest than you have to. Do your research.  Remember, though – Don’t take out a bank loan unless you really need it!
3. Direct Debits – How many direct debits have you got? Direct debits are the silent killers of your wealth. They’ll just take money out of your account each month without any notification until you stop them with the bank. Companies have a habit of charging the maximum amount possible each year. Many utility companies have millions of pounds of customer’s money gathering interest in their accounts. You trust them and they take more than they should! Solution – Remove any unwanted Direct Debits (DD) such as an old Gym Membership or Internet Subscription that you don’t use. Also, check up on essential DD’s to see that you’re not being overcharged.
4. Alcohol – How much do you spend a week on Alcohol? Calculate how much you spend on drink each week. A warning: This may shed light on your dark ignorance of how much money you’re actually spending on drinking. Only the brave should do this calculation. Solution – Set a weekly budget for how much you’re going to spend on Alcohol, then stick to it.
   
5. Unnecessary Material Goods and Vanity – I don’t really need to say much here, apart from that this is an expense that can be totally avoided. You may think you need the newest, greatest mobile phone or LCD TV, but these things are not worth getting into debt over. Your money is always better invested elsewhere. Don’t get attracted to the latest trend or brand as prices almost always drop after a year or two. Solution – Don’t by unnecessary goods you don’t need just to massage your ego–especially if you don’t have the money to burn

The above list may make seem like common sense. However, many people fail to act upon these simple realities. Ignorance may be bliss, but it doesn’t take the problem away. Take the time to assess your financial situation and stop unnecessary expenditures. I hope the above has sparked your mind into stopping the wealth assassins from putting a bullet through your financial heart!