Here are 5 cash traps I want to avoid

If you come from a disadvantaged background, it does not mean that you have not been exposed to very powerful financial talents that can help you later on.

For example, someone who has become needy knows how to set up a money trap like spending excessively on useless things. However, there are other notable sections which he has realized neatly.

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GOBankingRates talks to Daniel Mersing, CEO and Founder of Premier Body of Workers, about how his youth has effectively helped him avoid financial blunders.

Also see How to Avoid the Cash Trap Dominated by Dave Ramsey.

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From clipping coupons to attending big-name events.

“Have you ever wondered how someone goes from clipping coupons to coordinating events for A-list celebrities?” Mersing said.

“Picture this: a kid growing up on food stamps, watching his single mom work three jobs just to keep the lights on. Fast forward a few decades, and that same kid is grooving with the likes of Justin Bieber and Lady Gaga at star-studded events.

“Sounds like a Hollywood script, doesn’t it? But this is the story of my life, and along the way, I’ve learned a thing or two about escaping the money trap that keeps many people trapped in a cycle of poverty.

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Mersing said he remembers the generation when they learned they were not needy.

“I laugh remembering my first big pay day as the founder of Premier Staff,” he said. “I was standing in the grocery store, staring at name-brand cereal, and for the first time in my life, I didn’t have to do the mental math to see if I could buy it. Then it hit me: I had made it. But I also knew that if I wasn’t careful, I could lose it all so quickly.”

The lure of cash: the ‘I deserve it’ mentality

“When you grow up with nothing, it’s easy to fall into the trap of excessive spending once you start earning money. I call it the ‘I deserve it’ mentality, and it’s a slippery slope,” Mersing said.

Then making his first major deal, he set about going on a “spending spree”.

“But then I remembered all the times I saw my mother choosing between paying the electricity bill and buying new shoes for school. That memory kept me grounded.

“Instead of splurging, I invested that money back into the business. That decision allowed[my company]to grow rapidly, and soon we were working with clients like Ferrari, Louis Vuitton, and even staffing programs for Will Smith’s family.

the story continues

The Lure of Cash: Ignoring the Importance of Monetary Training

Mersing recognized that “to be poor often means to be economically illiterate.”

“When I started making real money, I realized I didn’t know how to manage it,” he said. “I was like a kid in a candy store, but instead of candy, it was stocks, bonds and real estate. I knew I needed to educate myself fast or I would be back where I started.

“I invested time and money in financial education, attending seminars, reading books, and even hiring a financial advisor. This knowledge has been vital in growing and maintaining my wealth.”

Lure of cash: The allure of quick money making schemes

Mersing famously said that when you are in need, the fantasy of overnight wealth is intoxicating.

“I’ve seen too many people get sucked into pyramid schemes, risky investments or gambling, hoping to make money through shortcut methods,” he said. “I once had a friend who blew his entire savings in a ‘guaranteed’ investment plan. It ends up worse than when it started. That’s when I realized that slow and steady really wins the race.

Cash Greed: Neglecting to Assemble a Safety Web

Mersing said growing up in need usually allows you to survive easily, living paycheck to paycheck. However, he also said that breaking this cycle is most important for long-term financial balance.

“When (my company) started making profits, the first thing I did was create an emergency fund,” he said. “It may seem counterintuitive when you’re trying to grow a business, but that safety net has allowed us to take calculated risks without the fear of losing everything.”

Greed for money: forgetting where you came from

Mersing said, “Perhaps the biggest trap after achieving success is forgetting your roots. It’s easy to get caught up in the glitz and glamour, especially in an industry like ours where we’re constantly surrounded by luxury and excess.

He recounted an incident where he overheard someone complaining about “cheap” champagne. “I had to bite my tongue to keep myself from telling them about the time when a cold beer was a luxury in my house,” he said.

“That moment reminded me how far I’ve come – and how important it is to stay grounded.”

curriculum realized

Mersing said that her biggest learning “in this journey from food stamps to Fortune 500 events” is that “financial success is as much about mindset as it is about money management.”

For anyone wishing to break the cycle of poverty, he recommended referring to the following:

• Spend money on yourself. “Education – whether formal or self-taught – is the best investment you can make. This is something that no one can ever take away from you.”

• Dwell down your path. “Just because you can buy something doesn’t mean you should buy it. The difference between what you earn and what you spend is what creates wealth.”

• Indulge yourself with luck. “When you are poor, it is hard to think about your next meal. But it is important to plan for the future. If you have to start, start small, but start early. Your network is your net worth. Look for mentors and peers who inspire you to move forward.”

• If you have reached the peak then give again. “Success means nothing if you’re not using it to lift others up. That’s why we prioritize working with charitable events and organizations whenever possible.”

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This article originally appeared on GOBankingRates.com: I’m a grownup: Here are the 5 cash traps I want to avoid