15 Reasons Why Rich People Can Go Bankrupt, Learn and Avoid

15 Reasons Why Rich People Can Go Bankrupt, Learn and Avoid

Becoming rich and having a lot of possessions is a dream for most people. Maybe all this time there are many assumptions that when you become rich, then someone will always be rich. As if there is no possibility for them to fall into poverty. However, this assumption is very wrong.

From the facts, many rich people in fact went bankrupt. And not a few of them end up being poor. There are many factors that cause why these rich people end up going bankrupt and falling into poverty, here are the reasons:

1. Less Financially Smart

Actually, by having a lot of money, a person will not become rich in a long time. They will remain rich if they have education and knowledge in financial matters. How much money has been owned by someone without good and careful management, then gradually the money will eventually run out.

And when that person is finished, then they will only be poor. Even many financial experts recommend that you become more financially smart because this is the most important asset.

2. Do not have the ability in terms of money management

One of the main factors that causes why some rich people end up going bankrupt and falling into poverty, that is because they do not have the ability to manage finances.

When someone is never trained on how to manage money properly, does not have a financial advisor or lacks financial education, it is certain that they will go bankrupt sooner or later.

3. Just Saving

Rich people with limited knowledge, most likely they will only keep the money they have in the bank. The reason is because bang is considered the safest place to save money.

In fact, when you save in a bank or use a deposit product provided by a bank, the interest given is very small. When compared with the inflation rate, your money continues to experience a reduction from year to year.

4. Have no assets

Rich people who already have a fairly good and mature financial knowledge will certainly spend their money on a good expense. And this is not owned by rich people who are not financially smart.

By purchasing an asset, you can use it to make the next asset purchase and so on that the rich do so that they keep getting richer and richer. One example of an asset is property, land and property

5. Cannot Use Assets

When you buy a property, here you need to take advantage of the property in order to make money every time, for example rented or rented out. That way of course you will make money without having to work. Because the money you spent buying the asset has earned you money back.

6. Collecting Liability

One example of bad spending is buying a luxury car. A car is an example of a liability. If the Asset has the property of adding to the property, then the liability will only drain your money. The value of the car will decrease every year. Plus there are maintenance and fuel costs which are certainly quite financial draining.

7. Don’t Like Investing

Investment is something that must be done by everyone, even for those who are already rich. Investments are made with the aim of securing and developing the money they have for the future. Currently, there are many investment instruments available, such as mutual funds, buying blue chip stocks and others.

8. Investing Carelessly

As explained above, investment is something that needs to be done. But when you jump into the world of investing without being equipped with sufficient knowledge, it will only worsen your finances.

Especially now that there are many fraudulent investments that provide the lure of such large returns to investors. Therefore, here you need to be smarter in recognizing the right investment and not a fake.

9. Only Have One Source of Income

Most of the rich people have more than one source of income. That way they will tend to be more secure. Because when one source is blocked, they can still earn income from other sources.

For rich people who have less knowledge in financial matters, they only rely on one source of income. Therefore, when the source is stuck and is no longer able to provide income, then these people will automatically go bankrupt.

What Is a Hedonistic Lifestyle Like?

10. Having a Hedonistic Lifestyle

Having a hedonistic lifestyle without realizing it will only make someone experience financial difficulties. Many rich people have felt the ill effects of a life of extravagance.

At first they spent money as they pleased and in the end what happened was that the expenses were far greater than the income. So that in the end the rich people fall into poverty.

11. Likes to spend money for non-essential needs

For example, hopi is shopping at online stores, likes to spend time in expensive cafes, eats at famous restaurants, likes to travel and has the habit of updating the latest gadgets.

Actually doing this is fine, but here you need to be more careful in spending. Adjust expenses with existing financial conditions so that later they don’t go bankrupt and have debts everywhere.

12. Euphoria

The next factor that causes a person to experience bankruptcy is due to feelings of euphoria. This generally happens to those new rich people. When someone comes from a poor family background then they suddenly have a lot of money.

So usually these people will feel the money should be enjoyed immediately. It is this feeling that will make spending on money not well controlled.

13. Hobby of Showing off and Competing

This habit triggers the rich like to squander money just to be recognized by others. Not infrequently they also show off by showing luxury items that are not so important and have no asset value. It only aims to satisfy his own ego and show that he is the richest.

14. Don’t Have Insurance

Many of the rich end up falling into poverty because the money they have runs out for medical expenses. That’s why it’s important to have a life insurance policy here. So that later when something bad happens, you can make a claim for the insurance.

15. Less Charity

The last factor why rich people go bankrupt is because they don’t give charity. By doing alms we have lightened the burden of others. And of course the people we have helped will help pray for us to become richer.

Apart from that, from the wealth we have, some are the rights of orphans and people who can’t afford it. When someone who has been rich neglects to give these rights, it is very natural that in the end the property is taken back by Allah subhanahuwata’ala.

Those are 15 reasons why rich people can go bankrupt and become poor. Therefore you need to avoid and learn the 15 things mentioned above to keep yourself from going bankrupt.