Hello Grasshoppa,
Ever heard someone say, “If only I earned more money, all my problems would be solved”? Yet, there are people making RM10,000 a month who are broke, while others earning RM3,000 are quietly building wealth. The truth is, staying poor isn’t always about how much you earn—it’s about how you manage what you have.
Let’s break down the biggest reasons why most people stay poor, even when they start making more money.
1. Lifestyle Inflation: Earning More, Spending More
One of the biggest traps is lifestyle inflation. The moment people start earning more, they upgrade their lifestyle—bigger house, newer car, fancier restaurants. Instead of saving or investing, they just increase their spending.
For example, someone earning RM3,000 might be living comfortably within their means. But when their salary increases to RM6,000, they immediately get a car loan, move into a pricier apartment, & start spending RM5,800 a month. The result? They’re still living paycheck to paycheck.
2. No Financial Plan = No Financial Future
Most people don’t have a financial plan. They earn, spend, & hope for the best. But without a plan, your money disappears faster than you realize.
Imagine two people earning RM5,000:
- Person A: Has a budget, saves 20% every month, & invests in stocks & property.
- Person B: Spends whatever comes in, relying on next month’s paycheck to survive.
After 10 years, Person A has financial security, while Person B is still struggling, wondering why they aren’t getting ahead.
3. Debt: The Silent Wealth Killer
Many people stay broke because they take on bad debt. Buying things on installment—luxury phones, designer bags, high-interest loans—only drains your future income.
Example:
- A RM5,000 phone on a 24-month installment = RM208/month
- A RM200,000 car loan = RM1,800/month for 9 years
These monthly payments add up, leaving little room for savings. Some even take personal loans just to maintain their lifestyle, making it even harder to escape the debt cycle.
4. Not Investing (Letting Money Sleep in the Bank)
Many people save but don’t invest, which means they’re losing money to inflation. A fixed deposit giving 3% interest won’t help much if inflation is 4%. Keeping all your money in the bank might feel safe, but in reality, it’s making you poorer over time.
Example:
- Person A: Saves RM500 a month in a bank (2-3% interest).
- Person B: Invests RM500 a month in stocks or funds (7% average returns).
After 10 years:
- Person A: RM69,000
- Person B: RM86,000+
5. The “Get Rich Quick” Mentality
A lot of people stay poor because they chase get-rich-quick schemes—whether it’s MLM, crypto scams, or high-risk investments that promise “guaranteed returns.” These usually end in losses.
Example:
- A friend promises you “double your money in 3 months”—sounds too good to be true? It usually is.
- Many people lost thousands in scams because they didn’t do proper research.
- Alot of people couldn’t differentiate between investment scams & actual scams
- There are also people willing to take “risk” knowing that it is a scam
6. Not Learning About Money
Here’s a simple truth: If you don’t understand money, you will always struggle with it. Some people work hard their whole lives but never learn how to manage, save, or invest their income properly.
Example:
- A person who knows financial literacy will use credit cards wisely, negotiate better deals, & find smart ways to invest.
- A person who doesn’t will overspend, get into unnecessary debt, & struggle to retire comfortably.
Conclusion:
Staying poor isn’t about how much you earn—it’s about how you manage your money. If you don’t control your spending, plan your finances, avoid bad debt, & invest wisely, you’ll always feel like you don’t have enough. But if you take charge of your money, even a modest income can turn into real wealth over time.
So, ask yourself: Are you working for your money, or is your money working for you?
OSS!
