I hate to be the one to break it to you, but making a lot of money does not guarantee that you will have financial success. Of course, it could mean that you reach financial greatness. It is possible that you make enough money so that all of your dreams come true. Yes, making a lot of money can be a great thing…but only if you play your cards right.

Making a lot of money is not the sure thing that many people make it out to be. In fact, making lots of money could also mean that you end up broke, flat on your ass, and moving back in with your mom. Why? Because making a lot of money only gives you the opportunity for success. It guarantees nothing. Making a lot of money gives you the tools for success, but there are a lot of pitfalls and ways for people to go astray. Avoid these mistakes, and you could end up very wealthy. Give in to them, and you could end up just as broke as the rest of us.

Many of the choices that you make will affect your ability to build wealth. Some of them are avoidable while others aren’t. With that being said, I definitely think its worth taking a minute to investigate some of these options.

Where You Choose to Live

When Greg was living in Chicago he lived in the beautiful Wrigleyville area. It was awesome. There was all kinds of wonderful things to do, all within walking distance. Unfortunately, a tub of Country Crock cost $8.00. Greg’s crappy second floor apartment building with no air conditioning cost him over $500 a month ($1,500 total) for one miserably tiny bedroom. If we would have stayed in Chicago, a considerable amount of our income would have went toward housing and cost of living. We never would have been able to save as much as we are saving now. Luckily, we moved somewhere much more boring, and thus much more affordable. (I guess that’s why they call it “Naptown”.)

Lifestyle Choices

For some people, getting a raise at work simply means upgrading what they have and finding ways to spend more money. For others, an increase in income means buying a bigger house and a newer car. For frugal geniuses like the people who read our awesome blog, getting a raise means an opportunity to save and invest more money. I personally know people who make twice as much as we do, yet they live paycheck to paycheck. The reason is because they simply spend it all. Their budget is not really a budget. It doesn’t take on any sort of written form. To them, a budget means trying not to spend more than what they made that month. Is it any wonder that when a financial crises comes up in their lives, they are caught totally unprepared?

Expensive Hobbies

Even when one’s financial house may otherwise be in order, it can be hard to get ahead when you have expensive hobbies. For instance, golfing can cost a hundred of dollars a month – or more! Mountain climbing can costs thousands of dollars in equipment and travel fees. A love of the water can cost an arm and a leg. Do you enjoy boats? Do you enjoy jet skis? They are all expensive.

These are just some of the ways in which you can completely reverse the effects of making a lot of money. If you think that making a lot of money is the cure to being broke, you need to think again. If your lifestyle outpaces your paycheck, you really aren’t making any more money than the rest of us. In fact, you may be spending yourself into the poor house. On the flip side, if you are a good steward over your money, you can increase your net worth by practicing some spending restraint. You may become wealthier than your friends who are making twice as much money as you are. It’s really not about how much money you make. It’s about how much you are able to save!