Prompted by the legendary businessman Andrew Carnegie, who turned about ten cents into a fortune, the journalist Napoleon Hill studied more than 500 self-made millionaires for over 20 years before publishing his bestseller Think and Grow Rich in 1937. His aim was to extract the formulas millionaires used, the ones that could help you get rich, and he also set out some of the reasons why you aren’t rich and can’t escape poverty.
Besides his 13 principles for building wealth, he revealed 30 major causes of failure that keep people from getting rich, often tied to habits that hold back your success.
Here are 16 of the reasons you’re poor that are still relevant today.
(See also: The 5 most important steps to success)
Why aren’t you rich? Here are the reasons
1. Not having a well-defined purpose
There is no hope of success for the person who doesn’t have a definite purpose or goal to aim at.
If you’re looking to build wealth, start by picturing a savings goal with a specific number. Then make a financial plan and decide exactly what you want to do with your money.
(Read: A former Goldman Sachs banker explains what being rich really means)
2. Lack of ambition
You have to want to aim above mediocrity. Hill says there is no hope to offer a person so indifferent that they don’t want to get ahead in life and aren’t willing to pay the price.
Wealth doesn’t come easily. You have to work at it with patience and persistence. A good place to start is to invest your money (the sooner the better) and let the power of compound interest build your wealth. It doesn’t take much time or effort, but it does require action on your part. As you know, Warren Buffett uses value investing, which consists of investing an amount, adding the interest earned to the principal, giving it time and letting it grow through compound interest.
See also: How to go from poor to rich with Ray Dalio’s 4 habits
3. Not applying your education properly
Don’t let a university degree hold you back. Knowledge is only potential power, and it won’t be useful or lead to great wealth unless you organize it and apply it to your life. Hill stresses that education consists not so much of knowledge as of knowledge applied effectively: men are not paid for what they know, but for what they do with what they know.
See also: How to get what you really want in less time
Don’t settle for your degree. Make it a priority to keep learning new things and challenging your mind. There’s a reason why so many of today’s successful and wealthy people are avid readers.
4. Lack of self-discipline is one of the main things keeping you from getting rich
Discipline comes through self-control. That means you have to control all your negative “qualities”. Before you can control situations, you first have to control yourself.
When it comes to getting rich, the most basic formula is: save more, spend less, invest more. It’s a simple concept, but spending less takes discipline. Learn to recognize and manage the triggers that make you overspend if you want to start building wealth.
(Read: Tony Robbins: 5 incredibly obvious tips for building wealth)
5. Not looking after your body
No one can enjoy great success without good health. It’s no coincidence that many millionaires make time in their schedules to exercise.
If you’re not on top of your health, the good news is that many of the causes of poor health (overeating, negative thinking and lack of exercise) are entirely within your control.
6. Putting things off (procrastination) keeps you poor
Hill considers procrastination one of the most common causes of failure: most of us, he writes, go through life headed for failure because we are waiting for the time to be right to start doing something worthwhile. Don’t wait, he says; time never stands still. Start from where you stand and work with whatever tools you have at your disposal, and you’ll find better tools as you go along.
If you want to build wealth, start today. Read articles or books on financial education, make a financial plan, and so on. But start today. Whatever you don’t know, you’ll learn along the way.
7. Lack of persistence won’t let you stop being poor
Most of us are good at starting things, but in the end we tend to tire of everything we start. People are prone to give up at the first sign of defeat.
Don’t stop until you get what you want. The most successful people tend to keep busy and push through failure. Billionaire Mark Cuban says he has learned that it doesn’t matter how many times you fail: you only have to be right once to succeed.
8. Negativity
In his book, Hill wrote that there is no hope of success for the person who repels people through a negative personality: success comes through the application of energy, energy is obtained through the cooperative efforts of other people, and a negative personality will not encourage cooperation.
If you want to get rich, positive emotions have to win out over negative ones. Today, research shows that positive people tend to get better results at work and are less likely to be unemployed.
9. Indecision keeps you from building wealth
Hill writes that, after analyzing several hundred people who had accumulated fortunes of more than a million dollars, he concluded that every one of them had the habit of making decisions quickly. (Those were millions in the money of the time.)
On the other hand, he notes, people who fail to accumulate money have, without exception, the habit of making decisions very slowly, if they make them at all, and of changing those decisions quickly and often.
Making decisions quickly isn’t just a trait of the rich; it’s one of the most important qualities a leader must have. At the end of the day, making a bad decision is better than making no decision at all.
(Read: 10 ways the rich think differently)
10. Choosing the wrong spouse
Hill singles this out as one of the most common causes of failure: unless this relationship is harmonious, he writes, failure is likely to follow, and it will be a form of failure marked by misery, unhappiness and the destruction of every sign of ambition.
His claims are backed by research. A study by Brittany C. Solomon and Joshua J. Jackson of Washington University in St. Louis shows that having a conscientious spouse can boost your income.
11. Not taking risks is one of the things that keep you from being rich
Hill says that the person who takes no risks generally has to take whatever is left once the others have chosen. Too much caution, he adds, is as bad as too little: both are extremes to watch out for.
When it comes to managing your money, it can be tempting to leave your savings safe in your bank account to avoid the repercussions, and the feeling, of a stock market fall. But investing your money is how you’ll make more of it.
You’ll want to do it prudently, of course, and a good place to start is low-cost index funds, which Warren Buffett and other experts have always recommended for long-term investors.
12. Spending time with the wrong people
Hill advises taking great care to choose an employer who will be a source of inspiration and who is intelligent and successful.
This idea goes beyond your boss and colleagues; it’s also important to surround yourself with talented people outside work.
We become like the people we associate with, which is why the rich tend to make friends with other rich people. It isn’t a matter of discrimination; it’s a matter of what each side brings to the other. By the same token, a person from a poor background who manages to get into a circle of rich people and absorb what they say will probably stop being poor in very little time.
13. Staying in a job you hate
Hill writes that no man can succeed in a line of work he doesn’t like. The most important step in marketing your personal services is choosing an occupation you can throw yourself into wholeheartedly.
Don’t waste your energy on a job that leaves you stressed and unfulfilled. Quitting your job, if the circumstances are right, can be very rewarding and can pay off in the future.
14. Lack of passion
Without enthusiasm you can’t be convincing. Moreover, enthusiasm is contagious, and the person who has it under control is generally welcome in any group of people.
The richest people don’t find success on their own; they use their passion and energy to inspire others and keep moving forward.
Billionaires agree that no one has ever achieved anything great without passion for what they were doing.
15. Being closed-minded
People with a closed mind on any subject rarely get ahead.
You have to be willing to keep collaborating with others, imagining new ideas and innovating. The richest and most successful people think differently.
16. Lacking social skills and being unable to work with others
Building an empire takes people skills and charm as much as strategy.
(Read: Social skills make up 50% of your career success)
Mark Cuban put it bluntly in an article on the keys to success in business: people hate dealing with jerks, it’s always easier to be nice than to be a jerk, so don’t be a jerk.
See also: 25 habits of successful people
Featured image: Unknown author, Public domain, via Wikimedia Commons.
