ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

5 Ways People Lose Their Money and Go Broke in the Long Run?

Updated on August 1, 2020
talesofvikram profile image

Vikram Brahma is a Digitalpreneur, Author, Blogger, Writer, & YouTuber. He loves to write content & spend time working from home.


If you ask anyone questions related to money, everyone will say, yes money is extremely important in their life. We all know about this and accept money as the backbone of society and economy. Then why people don’t have money with them? Why only a handful of people are having so much wealth while rest are still struggling?

As per the article published in Wikipedia, half of the world’s wealth belongs to the top 1% and top 10% hold 85% of the world’s economy? In other words, 90% of the world’s population holds 15% of the entire wealth and resources.

So, let’s understand why people lose their money and go broke in the long run. Also, I like to inform you that these are my research and understanding of the circulation of money in people’s life.

Wealth can solve 80% of your life's problem
Wealth can solve 80% of your life's problem

Lack Of Financial Education

One of the sad things about our education system is they don’t emphasis the importance of becoming a job creator. Our whole education system revolves around how to get good marks and get a suitable job.

Apart from science, arts, commerce, sports, music, there should be separate courses on how to create wealth? In this program, students should be taught the difference between passive and active income. They should learn as many ways to create sources of passive and active income. Plus, they should be taught how to invest in the stock market.

I believe since the majority of people are not taught anything related to how to manage and grow wealth that’s why people suffer in the long run. Society and common people have to realize an active source of income is not the only way to grow your money in the long run. I am writing this point due to my personal experience.

Lack Of Discipline

Another reason why people suffer is because of lack of discipline related to managing finance. When I was working as an active employee, my friends use to ask money from me regularly. The reason being they have spent all their monthly income mostly on purchasing liquor and cigarettes.

If you do some rough calculation you will know that a young working executive spends at least Rs. 70000/- every year on these items. So, in the coming ten years he will be spending above Rs. 7,00,000/- ($10,000 approx.) and just to damage his/her health. Here, I have not included large money people spend enjoying in a disco or pubs. This is just an estimate of what bachelors spend while staying with friends in the hostel.

Now, if you have invested that money in stock, gold or any other assets then in 10 years it would have been multiplied. I am not saying you shouldn’t consume but by doing so you’re deteriorating your health in the process. And all this is happening due to the lack of discipline for money.

Credit Card Trap
Credit Card Trap

Credit Card Trap

Banks are clever in distributing credit cards to their customers. I remember when I was in Hyderabad, India as soon as I got selected for a job, within a few days associated bank gave us both debit and credit cards. Credit cards come with an annual charge, maybe say Rs. 500/- and you will say what’s so harm in paying that much amount to the bank annually.

First of all, you didn’t apply for it. So, it was forcefully handed to you. Now, suppose you never used credit card even once in a year, still, they will deduct Rs. 500 from your account. So, in 10 years, you have paid Rs. 5000/- to the bank without ever using it. Suppose, they have ten thousand customers like you, which means bank made fifty lakh ($66,666/-) in one year without customers using their credit cards ever. And the bank is using just a system which they created once.

Credit cards are good but if you know how to use them properly. I know many stories of how people get trapped in the credit card usages. Even I have suffered once because I was not aware of its usage. Currently, I am not an active employee of any company but I still manage one credit card and since I am using it well, I am not facing any issues now.

Buying Liabilities Instead Of Assets

How many of you have read the book called “Rich Dad Poor Dad”? If you have read this book, I am sure you are aware of the difference between assets and liabilities. But if you haven’t then let me tell you the difference. Liabilities are those through which your money goes out and assets are those which brings money for you.

In simple words through my understanding anything which requires more maintenance cost then your earnings are all liabilities. Even so-called luxury cars and big homes are liabilities unless you are earning something by using them. Do you know with in the first year your car value depreciates 20% to 30%? Instead, purchasing gold or silver is better as their value increases.

If you have a home through which you can earn rent then that is an asset. If you have a car which people can hire and pay you then that is an asset.
Another thing which you can do is first purchase some asset, have regular income through it and then purchase the car of your dreams. Remember wealthy people purchase assets, common people purchase liabilities.

Stop Taking Financial Advice From Friends And Family

If you want to become wealthy learn from a wealthy mentor. It is the same way if you want to become a cricketer, learn from a cricket coach. This rules technically apply in every aspect of life.

So, tomorrow if I want to learn about the stock market and how I should invest then I will look for someone who is personally doing this task. I will look for that mentor in my life. You can take advice from anyone but do self-study and implement as per your understanding. In terms of investing always follow statistics never opinions. Also, remember everything takes time there is no short cut and get the rich quick scheme.


I have shared these points as per my limited knowledge about money. I believe out of these above points if you can educate yourself about finance then that will be boon for you and your family. I have heard from many top-class investors that if you have money 80% of your life’s problems will be solved automatically. Everyone is working or doing something in life just to earn money and the last thing which I will like to say, build sources of passive incomes as soon as possible.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2020 Vikram Brahma


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)