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Fact Check Your Financial Plan

A Mexican TikToker recently went viral for calling out Americans for their financial struggles and explaining why some Mexicans are better off financially than Americans.

​​Angel De La Rosa, known as @minipapixm, warns Americans are so broke and working in a system that will ‘never benefit’ them and says people in Mexico at least own their houses and cars and aren’t in debt. He pointed out that while individuals in his home country may earn less, they also spend less, leading to a potentially higher quality of life.

Let’s fact-check De La Rosa. For some Americans, the cost of living and the cost of housing are at crisis levels. It’s so bad that many Americans are relocating to other states to save money. This is reflected in the recent trend of Americans relocating from states like California and New York to places like Texas and Florida. However, even in these more affordable states, challenges with housing affordability and the overall cost of living still persist.

De La Rosa points out that Americans like to go into debt, whereas Mexicans live within their means. He’s not wrong. OECD data shows that Mexico boasts the lowest household debt among its 36 member countries, while the U.S. ranks in the middle.

De La Rosa points out that the burden of debt weighs heavily on Americans compared to Mexicans. He highlights the fact that most Mexicans own their homes and cars outright, whereas Americans often find themselves trapped in cycles of debt they are unable to break out of. In fact, American spending habits are so bad that most Americans would be unable to cover a $400 emergency. A 2023 survey found that 67% of employees couldn’t afford an unexpected $400 expense.

The reason some Mexicans are more content financially than their better-paid American counterparts is a state of mind. Mexicans are less likely to keep up with the Joneses than Americans are. Americans’ pursuit of material wealth and the willingness to go into debt to spend for show are what perpetuate the cycle of debt and keep Americans from achieving personal and financial fulfillment.

Unfortunately, the cycle of debt is the norm.

​​Those who are able to break out of the cycle and achieve financial independence and personal fulfillment make simple changes to their habits to accumulate wealth instead of accumulating possessions.

The debt cycle is an equal-opportunity predator. It doesn’t matter how much money you make; anyone can fall into the trap of overextending and living paycheck-to-paycheck. Luckily, there’s hope.

​​With a few straightforward tweaks, anyone can change their financial path:

Save More, Spend Less.

​​Avoid social media and the pressure to keep up with the Joneses. Spend less to save more. Save for what? Read on.

Put Your Money To Work.

​​Unless you find a way to make your money work for you, you will always be working for it. Passive income is the key to building wealth. Passive investments that let you make money while you sleep without quitting your job will be the key for you to eventually walk away from your job.

Don’t Follow The Herd.

​​How many people with 401(k)s and IRAs do you know who retire but still feel financially insecure? I bet a lot. That’s because traditional retirement plans don’t cut it. It’s no secret that most baby boomers are unprepared financially for retirement. If the traditional markets don’t cut it, then consider private investments that offer passive income opportunities ideal for building wealth. It’s why the ultra-wealthy allocate more than half their portfolios not to stocks and bonds but to private alternatives like real estate and private equity.

Rely On Others.

​​Leverage the expertise of others to generate passive income. Partnering with experts who share your investment objectives, values, and beliefs will help you achieve your financial goals quicker than doing it alone. This is not to say that you should invest your money blindly. Make sure to do your proper due diligence. Know the experience, background, and track record of the person you’re entrusting your money to.

Fact-Check Your Financial Plan.

Financial independence will only come when you reevaluate your financial habits and make the determination to make some changes.

​​Just like when you want to lose weight, you need to do less of one thing and more of another. Whereas you want to eat less and exercise more to lose weight, to build wealth, you need to spend less and invest more.

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