7 Key Signs You’ll Never Make It to the Upper Class

America is based on the concept of upward mobility. While there are certainly obstacles to the American Dream for many, you’re not doing yourself any favors if you put obstacles in the way of your own success.

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You’re in Debt You Live Paycheck to Paycheck You Have a Weak Professional Network You Rely On One Source of Income You Don’t Understand Finance and Investments You Trade Your Time for Money You Don’t Take Advantage of Your Retirement Plans

If you’re striving to create a better financial life for yourself, and perhaps even reach the upper echelons of wealth in America, you’ll have to make a plan — and avoid numerous pitfalls. If any of the following characteristics apply to you, it’s a sign that you’ll have to make some changes if you want to make it to the upper class.

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You’re in Debt

Debt is the single biggest drag in the quest for wealth. Every dollar you divert to your debt is a dollar you can’t save or invest. Even worse, if you’re paying 25% or more in interest on your debt, it’s likely growing instead of shrinking. As billionaire Mark Cuban once cautioned on the Dave Ramsey Show, “The best place to invest is to pay off all your credit cards and burn them. If you’re paying 15% or 20% interest, paying that down is like earning 15% or 20%. It’s that simple,” he said.

Learn More: Here’s the Minimum Salary Required To Be Considered Upper Class in California

You Live Paycheck to Paycheck

If you live paycheck to paycheck, it means there’s no room in your budget to set aside money for savings and investments. Without living within your means, you’ll never accumulate real wealth. In fact, the more likely scenario is that you rack up credit card debt.

There are only two solutions to get out of the paycheck-to-paycheck cycle — earn more or spend less. If you’re already on a tight budget, earning more might be your only choice. Look around for higher-paying jobs that can leverage your existing talents, or better yet, consider taking classes or workshops to make yourself a more valuable worker. As billionaire Warren Buffett often says, investing in yourself is the best thing you can do.

You Have a Weak Professional Network

As difficult as it may be to climb the wealth ladder in America, it’s harder still if you don’t have others that you can lean on. There are very few truly self-made millionaires and billionaires in the world. Even entrepreneurs rely on networking to gain visibility for their products and services and connections to make deals.

If you’re closer to the bottom of the ladder and simply looking for a higher-paying job, knowing people in positions of power can help you stand out from the crowd of anonymous resumes and electronic job applications.

You Rely On One Source of Income

Diversifying your income streams is a hallmark of the upper class. If you rely on a single source of income, your financial life could be immediately upended at any time due to layoffs or salary cutbacks. Multiple streams of income not only protect you from sudden calamity but typically boost the amount of money you earn as well. Typical sources of additional revenue include side gigs, personal businesses, rental income and investments.

You Don’t Understand Finance and Investments

It’s one thing to earn a high salary. But as many financial experts will tell you, without knowing how to save and invest that money, it won’t get you that far in terms of your lifelong net worth. In fact, if you don’t consciously set aside a big chunk of your money, it’s more likely that you’ll end up spending all of it, falling into the pattern of living paycheck to paycheck.

You Trade Your Time for Money

To truly create lifelong wealth, do all you can to stop trading hours for dollars. Instead of working hard all day to make money for someone else, consider owning a business so all the profits go to you instead. Another option is to build up various means of passive income, such as rental income, investment income or even royalty income, if you have the means. All of these methods allow you to “make money while you sleep,” meaning you don’t need to clock into a 9-to-5 job and rely on someone else paying you for your valuable time.

You Don’t Take Advantage of Your Retirement Plans

Your workplace retirement plan is the closest thing to “free money” you’re likely to ever have. Not only can you defer taxes on your contributions until retirement, your employer will typically make some type of matching contribution to beef up your account.

If you earn $100,000 and contribute $6,000 to your 401(k), for example, you might receive an additional $3,000 from your employer, or $6,000 if they offer a 100% match. This can amount to tens of thousands of dollars added to your retirement plan on your behalf, an amount that might grow to hundreds of thousands over time due to the magic of compound interest. Skipping out on this type of financial boost makes no sense if you’re trying to reach upper-class status.

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