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Going into debt for things that don’t add up in value
Reverse hustling is moving in the opposite direction of financial freedom and independence; it is going into debt for things that depreciate relatively quickly. Furthermore, it is accumulating things in exchange for a diminishing net worth and decreased access to financial resources.
Are you buying more assets (i.e., investments), or are you buying more liabilities (i.e., cars, technology, clothes, shoes, etc.)?
There are only two directions you can move regarding your finances. You can move forward or backward. Which direction have you been moving in lately? Are you moving towards financial independence or financial dependence?
The Majority Reverse Hustles
Do you fall into one of the following categories, or more than one? All of these descriptions signify that you’re probably reverse hustling. Don’t worry if you’ve been reverse hustling, though, all you need to do is the opposite to start hustling in the correct direction.
Examples of reverse hustling (moving away from financial independence and freedom):
Buys more house than they can afford.
Buys more car than they can afford.
Travels without a budget.
Spends too much money on entertainment.
Racks up student loans for an education they don’t end up utilizing.
Overspends on dining out and groceries.
Buying too many miscellaneous items consistently.
Maintains credit card balances, which means they’re paying credit card interest every month (one of the most expensive types of debt).
Doesn’t use a budget, which means they’re not tracking their spending, which means they’re likely overspending each month.
Only has one source of income.
Stop Reverse Hustling
Take alternative actions from the majority that will help you hustle forward, such as:
Invest in stocks, real estate, private equity, technology, and other assets that will appreciate over time.
For every liability you purchase, take a percentage of the purchase and invest it in an asset.
Decrease your expenses so that you can increase your expendable income.
If you can’t afford a new or expensive car, then don’t buy one. I know it’s tempting to buy things we can’t afford because America makes it more accessible to live above your means, our friends have nice cars, and social media is constantly shoving pretty images of materialistic items in our faces; however, it’s best to avoid what you can’t afford.
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The key to living a financially free life is usually doing the opposite of the majority. Most people don’t make wise decisions with their money. So if you want to not be like most people, do the opposite.
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This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.