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Eight percent of American families have a negative net worth. And it doesn't get much better for the rest of the country, since the median net worth for Americans aged 35 to 44 is just $136,000. So why is this happening? Well, I've coached thousands of people on their personal finances, and most of them are falling victim to at least one major wealth killer. In today's video, I'll break down the most common ones. Specifically, we'll look at nine wealth killers that destroy your net worth. For each one, I'll expl why it's such a problem and how to avoid it. And shout out to our official channel sponsor, delete me. More on that later. All right, starting at the top with wealth killer number one. Too many depreciating assets. We all buy things that go down in value. It's part of life. Technology gets outdated. Furniture wears out. That H and M sweater becomes a schmedium after one too many trips through the dryer. But depreciation itself is not the problem. The problem is when too much of your financial world is tied up in things that are guaranteed to lose value over time. When that happens, it's a silent but deadly killer. Not unlike a but more like. Carbon monoxide. How dare you. And speaking of carbon monoxide, the biggest offender in this category is cars, specifically new cars. Why? Because new cars depreciate by about 60% in the first five years, which means a $40,000 car will be worth around 16 grand on average after just five years. And this is all compounded by taking on debt and payments for that car. It's bad enough that you got roped into crazy high payments, over 700 bucks a month on average. But you also wind up paying a ton in interest. So let's recap the average loan term, 70 months of payments. You've now got a paid off car that you bought for $40,000 that ended up costing you $50,000 thanks to interest. That's now only worth $16,000 thanks to the depreciation. And this is exactly why millionaires tend to avoid new cars like I avoid gas station sushi. It's not optimal financially or for your intestines. Talking about my Tom. Tom. So what do millionaires actually drive? Well, on average, they drive a four year old car with about 41,000 miles on it. See, they're not interested in showing off at the stoplight to impress you. They simply want a reliable car that they can actually afford. And they invest that extra money that they would have put towards payments to build their net worth instead of social status. I digress. Wealth killer number two, not tracking your expenses. Not tracking your expenses is financial chaos on the level of a third grade field trip to Times Square. God bless our teachers. Give them a pay raise. All right. For bringing Aiden to the Olive Garden in Times Square. If you don't know where your money's going, you can't control it. It's that simple. That leads to overspending, which wrecks your ability to save and invest. And for some people, checking up on how much they're spending each day sounds like watching a horror film. But the real horror here is running around with a financial blindfold and just hoping everything work, just vibing. And besides, it's never been easier to track your expenses. You can use an app like EveryDollar to track it all and connect it to your bank, which automatically brings in all the transactions. It's been a game changer for me and my wife, and I use it every day as a wealth maintenance tool. So if you want to check it out, I'll drop a link to the EveryDollar app in the description. And speaking of tracking, wealth killer number three is not tracking your net worth. You can't manage what you don't measure. And your net worth is the big picture scoreboard for your financial life. It keeps you focused and it motivates you, especially when progress feels slow. When you don't track your net worth, you tend to lose sight of long term progress and miss the motivation that keeps wealth building consistent. When you do measure it, you can actually see long term progress happening. And you'll be surprised how even small changes like paying down a credit card or adding to your emergency fund move the number in the right direction. So here's how you calculate your net worth. Start by listing everything you own that has value. That includes your savings, your checking account, your investments, your home, your car. Those are called assets. Now, it does not include your multiple multicolored glassware or your collection of Nicholas Sparks novels. It's the same story every time, Jane. He just changes the names. Brilliant. What do you want then? After your assets, we're going to list everything that you owe. That's your mortgage, your car loan, your student loans, and any other debt you have. The fancy word for that is liabilities. So your assets minus your liabilities equals your net worth. It's what you own minus what you owe. And if you want an easy, free tool to calculate all this, I will drop a link in the description to the one that I personally use. All Right. Well, wealth killer number four, Renting forever. Now simmer down and put away the pitchforks. There's nothing wrong with renting. I'm not mad at you for renting. Don't go jump into a house tomorrow just cause I said so. Renting is a smart move for a lot of people based on their financial situation. But long term, you do need a plan and a path to home ownership. Not tomorrow, but eventually. Sooner the better. Here's why. Owning a home will stabilize the biggest line item in your budget and it gives you control over your property. And most importantly, when it comes to net worth. Home ownership is a powerful wealth building tool because homes appreciate over time. And with each mortgage payment, you build equity. And all of that helps your net worth skyrocket. In fact, 68% of millionaires have a paid for home. So while you're definitely not behind, if you don't own a home, you should start moving in that direction. Work on increasing your income, get rid of any consumer debt that you have, stack cash for emergencies and then save for that down payment. Let me tell you, for my wife and I, homeownership was a big net worth booster. Getting that mortgage the right way and paying it off quickly has really boosted our net worth and got us to that millionaire status. All right, wealth killer number five, lifestyle creep. Now, a lot of people see every bit of extra income, whether it's from a raise, a bonus, promotion, a tax refund. They see it as permission to increase their lifestyle. A fancy vacation, a nicer car, ordering the bruschetta chicken pasta off the big boy menu at TGI Fridays. Now, I'm not saying that someone 10 or 15 years into their career should still be living like a broke college student. But as you make more money, you shouldn't consume every dollar of that with a higher standard of living. That's called lifestyle creep. And it quietly keeps people from saving and investing at the level they need to build some serious wealth. And that's why I recommend investing 15% of your income each month once you're debt free with a fully funded emergency fund. That way your investing goes up alongside your income. So let's say you make $50,000 and you invest 15%. Well, one day you might make $100,000 and invest 15%. Well, you've just doubled your investment rate. That's pretty cool. All right, wealth killer number six, Divorce. Sorry to be buzzkill, but it truly is one of the quickest ways to destroy your net worth. Though I do love a divorce dad anthem as much as the next guy Photographed by Nickelback. Great one with arms wide open by Creed. And if you're in touch with your emotions, you're a real man. Landslide by Fleetwood Mac. Big shout out to the divorced dad Rock playlist on Spotify. A lot of bangers on there, but here's the truth. Divorce destroys your net worth by splitting assets, adding legal costs, and forcing you to rebuild financially from a weaker position. The median cost of a divorce attorney in the US is about $7,000. And the average total cost of a divorce ranges from three grand to 23 grand. And that doesn't include lost assets or other long term impacts on your finances. Now, if you're already divorced, I am not here to shame you. What's done is done, and the past is in the past. But it does mean that you'll need to work harder and be intentional to rebuild what was lost. Maybe you had to sell the house and now you're renting. Maybe you had to give up half of your retirement. Maybe child support or alimony could be spreading your budget thin. The takeaway here is that if you're married, you should prioritize a healthy marriage if you want healthy finances. All right, wealth killer number seven, borrowing from retirement. In 2022, 13% of people with a 401k borrowed money from it. Now, that percentage might sound small, but when you zoom out, it's a big deal. About 70 million people use a 401k, which means roughly 9 million rob from their own retirement. And that's about 9 million too many. Exactly. Borrowing from your 401k does lead to penalties and taxes. But the bigger issue is what you lose long term. The whole point of a 401k is to build a nest egg to support you in retirement. And when you pull money out early, that nest egg shrinks. You have broken the little piggy bank. And worse, you unplug the power of compound growth. Your money isn't just smaller, it also stops growing the way it was designed to and keeps your net worth stuck in quicksand. And you know what makes me feel stuck in quicksand? Getting bombarded by scam calls and texts. Which is why I use Delete Me. A sponsor of today's video. Deleteme goes through hundreds of data broker sites to remove your personal information. And that helps protect you from all the spam tomfoolery. Because those sites are often the ones selling your info to scammers and spammers. And Deleteme is super thorough. They have privacy experts that are searching for that Info all year long behind the scenes, and they even send you custom reports every few months. And right now they're offering my audience 20% off their annual plans. So go to JoinDeleteMe.com George to check it out or click the link in the description. And before we get to the final two wealth killers on our list, you ever feel like you're paying way too much for your phone plan? You probably are. Which is why I love Boost Mobile, another sponsor of today's video. Boost offers the same high quality coverage as the big name cell phone providers without charging insane prices. And their unlimited plan is just 25 bucks a month forever. It's that simple. Unlimited data, talk and text with no contracts, no hidden fees, and a 30 day money back guarantee. And that means there's no reason not to give it a try. So head over to boostmobile.com Ramsey to make the switch or click the link in the description. All right, back to the list. Wealth killer number eight Playing the Debt game People do some wild gymnastics when it comes to debt. Keeping a mortgage forever for the tax benefit or because of the low interest rate, holding on to student loans because they think they can invest at a higher return. They're trying to outmaneuver debt like Steph Curry, hitting a crossover to find open space in the paint before nailing a layup. And yes, I know what all of those words mean. Play, action, pass. No thanks, man. I'm not really into sports. Here's what's actually happening. First, you're robbing yourself of peace. And as my friend Dr. John Deloney likes to say, your body can feel when you owe other people money, no matter the amount, and it's not a pleasant feeling. And second, you're locking yourself into payments that limit your options. Instead of getting to invest all your extra money, you're stuck sending it to Sallie Mae, MasterCard or a bank. And that kind of maneuvering doesn't build wealth, it just builds stress. And I am begging you to stop the madness. Pay off your debt. And if you hate being debt free, you can always go back into debt. That's your business. Finally, wealth killer number nine. Investing the wrong way. There are lots of ways to get investing wrong. Some people invest too little or not at all. Some people invest too soon while they still have debt or no savings. And others pick bad investments, either complicated stuff they don't really understand, or maybe it's too conservative, like just sticking to bonds. Or maybe they're using a trendy app like Acorn, thinking they're really moving the needle for their wealth. No matter which category you fall into, it is causing you to lose money instead of build wealth. So how do you invest the right way? Well, I made this video that'll walk you through the optimal order of investing, so click here to watch it next or use the link in the description below. That's it for today. Please hit like on this video if you enjoyed it and leave a comment letting me know if there's anything you'd add to the list of wealth killers. Thanks for watching. We'll see you next time.