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Abstract

means spending even more on taxes. Make sure you don’t forget that. In any case, your government will remind you of it. Keep enough money on the side for when they come. This mafia we call the government wants their share. They may not come to break your arms and legs for not paying them, but you will go to jail for tax fraud. Get a financial advisor who shows you how to protect your money.</p><p id="eba2">Scammers. If you are new to money, you will get approached by scammers. Scammers are looking out for stupid young money-rich people they can lure into their trap. Or they try to entice you to make an “investment” with them. Anything is possible. Keep your eyes peeled for these snakes. Better get a reliable financial advisor to take care of your money. I imagine you thinking that these people are only interested in making money from you and not for you. Yes, to some degree, that is right. These people need to live and make a profit too. It is a business relationship, after all. Still, there are some interested in helping you preserve and multiply your wealth. And unless you have the skills to do it yourself, you better look out for them. Educate yourself on all sorts of money matters. Only an educated person can make good decisions.</p><h2 id="7705">Don’t buy a new car, clothes, and handbags.</h2><p id="2367">Another trap to look out for is changing your spending habits too fast. Now that your Bank account looks like it could never run out of money, rest assured that it can, and it will. That Lamborghini you have been dreaming of, the Prada bag you always wanted, the watch you wanted to own for so long. DON’T FUCKING BUY IT. Only if you have a spending strategy. That is, make sure the money comes from a source of income that has nothing to do with your personal Bank account. How to do that? Put your money somewhere where it can generate recurrent income. As stated in Rich Dad Poor Dad, buy assets, not liabilities. What’s the difference? The difference is, assets put money in your pocket, the other takes money out of it. When you buy assets, you can use the profits generated from them to buy whatever you want. That way, your primary source of wealth won’t suffer. You could also reinvest it and create even more recurring income. How about that? Once your Investments generate enough monthly payment for you to live on without a care, you can go nuts.</p><p id="59d3">Ok, don’t go nuts, please. Always be reasonable; money doesn’t like to be bothered too much. If you do, it will slip through your fingers like sand. I also recommend you get a checking account, so you don’t end up making impulse buying decisions. Let’s call this a protection from yourself for yourself. And for goodness’ sake, don’t take up credit cards either because they can rack up tons of debt pretty fast. Pay cash whenever possible. The money you don’t see leaving your hands is money you don’t feel, and thus you lose sight of how much you spend. The rich don’t stay rich by spending like crazy idiots. Again, educate yourself on how to invest to receive recurring income. I am not a financial advisor, but I’m also not an idiot either (not anymore). I’ve experienced too much stupid shit with money, and I know it’s dangerous and tempting.</p><p id="17b7">You also want to save your money for emergencies so that you’re not swept away with the lifestyle change. Make sure you have enough saved to replace your income for at least six months!</p><h1 id="8e81">Avoid the trap of keeping up with your rich neighbors.</h1><p id="41a3">Ok, now that you are rich, you may feel the need to flaunt your new wealth. After all, you made it! Right? You find yourself living in a new neighborhood, surrounded by other rich people. As you get to know your neighbors at dinner parties and other fancy events, you may feel the need to keep up with them. Suppress it immediately!</p><p id="c92e">Why? Because these people have been rich their whole life. Becoming rich at some point in life and being born rich is like living in two different worlds. There’s no need for you to

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try and keep up with anybody. Besides, who do you want to impress? Your rich neighbors have their plans and know what they can or can’t afford. You don’t have to keep up with them. You are in a different race. Run at your pace. If you don’t plan to make it a marathon, you may end up broke sooner than you imagine.</p><h2 id="015f">Spend your money on things you need. Not on things you want. Don’t spend it because you have it!</h2><p id="e4b0">Once you have upgraded to another financial level, the “need” mentality is another trap you will encounter. Your mind starts racing at a million miles per hour, thinking about all the things you need to do or buy. You get that feeling of I need this, and I need that. No, you don’t. What is it that we need? Nothing but a warm shelter, food, clothing, and water. Once you cover these needs, that’s it. Everything else is luxury — a status symbol, an unnecessary nice-to-have object. Grant yourself one wish if you must. One wish you have been thinking about for many years. That’s it. Please this itch and then focus on multiplying your money. Spending your money on things you “really” want but don’t need is a good way of wasting your money. Don’t spend it just because you have it. I told you before; money doesn’t like to be bothered too much. Had I bought tons of new stuff after my recent windfall, I would have no savings to back me up. It’s easy to fall for this trap.</p><h2 id="dbc1">Make sure you’re saving for retirement. Every bit counts.</h2><p id="b0d2">Save for retirement. Whether you think you have a lot or not, every bit counts. Don’t fool yourself. Winning a significant amount of money does not set you up for life. Seventy percent of people who win considerable sums of money end up broke within a few years. That’s according to the National Endowment for Financial Education. Making sure you have enough for retirement helps a lot when you look back on your life. That way, you know you have enough money to care for everything when your time has come to let somebody care for you.</p><p id="4e77">As we get older, the risk of medical care increases and the bills can pile up so fast you can’t even imagine. You’ll burn through your cash like a hot knife through butter. In such cases, other family members can get burdened with that load. Make sure to have everything in place to prevent such a burden for your family. Have some retirement fund that can generate interest over many years. Fill it up with enough money right from the start. That way, the compound effect will work its magic almost immediately.</p><h2 id="758e">Conclusion</h2><p id="404e">People who suddenly find themselves with more money than they know what to do with inevitably encounter many pitfalls. Like buying things, they don’t need just because they can afford it.</p><p id="4480">The other point I like to highlight is how important it is to save for retirement. You never know what challenges life will throw at you. Make sure you prepare yourself for whatever comes.</p><p id="91fe">If you win more money than you can handle, don’t fall for all the shiny things that look exciting for one or two months. Make sure you’re not going to regret buying anything in 10 years. Many of the things you buy won’t be worth half of what you paid when you have to sell them tomorrow. Don’t be a fool. Educate yourself on all sorts of money manners before making any purchasing decision.</p><p id="ea54">Always buy assets and not liabilities. Assets put money in your pockets, and everything else takes money out of it. Finally, always consult a financial advisor. A lawyer, any professional who can help you keep and multiply your money. Do not take advice from friends and family. They mean well, but their advice is not the right one to follow most of the time. Get advice from a professional. If you are smart, you will have riches to enjoy for the rest of your life.</p><p id="7121">If you like this article, share it with your friends and subscribe to my Email List to never miss out on a new publication of mine.</p></article></body>

How Not to Go Broke From Sudden Wealth

Introduction.

Becoming rich is hard. And once you manage to become rich, it doesn’t get any easier. Yet, the most challenging thing of all — at least for some people — is staying rich. The pitfalls range from a new car to expensive clothes and handbags to the incredible new house. Let it get into your head too much, and if you’re not careful, you end up losing everything. Here’s a list of what people who find themselves filthy rich overnight should avoid. (counts also for people who did not get rich overnight).

Hence, the title, how not to go broke from sudden wealth.

Here’s what’s in it for you.

1. The traps that come with sudden wealth

2. Don’t buy a new car, clothes, and handbags

3. Avoid the trap of keeping up with your rich neighbors.

4. Spend your money on things you need. Not on something you only want — don’t spend it because you have it!

5. Make sure you’re saving for retirement. Every bit counts.

The traps that come with sudden wealth

Where do I begin? Imagine you win a vast lottery pot. I mean more money than you could ever count in a lifetime. What would you do first? I mean after you stopped screaming and jumping for joy. Would you immediately start spending? Or would you try to grasp your situation and think of the possible mistakes you could make that would lead to the potential loss of every penny you’ve won?

One effective trap is when you spend money on things you never would have before. Everybody has their particular spending habits. But if you’re like me, hearing the word, “limitless” is terrifying! It’s easy to go broke fast if you’re not careful. In the blink of an eye, you’ll find yourself spending money on unnecessary things that don’t make up who you are as a person. These things are a poor cover for any uncertainties you have.

Now I want to mention some other inconveniences that come with the money. When you receive a life-changing amount of money, you find out about friends you never knew you had. You start getting phone calls from people you haven’t heard in years. Watch out for these snakes. Also, people who have been close to you could feel intimidated and claim that all this money has changed you. Money is neither good nor bad. It does not make you a different person. Yet, it maximizes what you already are. It can show your true self. If you’ve been an asshole, but you never showed it before, prepare for it to usher in a much stronger way. Have you been generous without money? You are likely to continue being generous now that you have money.

You know what? Let me add something extra here, if I may — regarding friends and money. Money has no friends. And neither does anyone of us. This whole concept of “friendship” is a humongous pile of hot, steaming BULLSHIT. All that exists is a group of people with mutual interests. Sure, you go out for a beer, and you go out for dinner and all that. That is nothing but sharing mutual interests. Shift your interest too far from what it used to be and watch how these so-called “friends” begin to disappear. People change, and so does our tribe, as life goes on. Along the way, we find another group of people who share our interests. Some leave again shortly after, some stay for the rest of our life. That’s how it is and how it’s always been.

Ok, back to the topic. Here’s the next thing you have to keep in mind.

Taxes. Having money means having to pay taxes. Having a lot of money means spending even more on taxes. Make sure you don’t forget that. In any case, your government will remind you of it. Keep enough money on the side for when they come. This mafia we call the government wants their share. They may not come to break your arms and legs for not paying them, but you will go to jail for tax fraud. Get a financial advisor who shows you how to protect your money.

Scammers. If you are new to money, you will get approached by scammers. Scammers are looking out for stupid young money-rich people they can lure into their trap. Or they try to entice you to make an “investment” with them. Anything is possible. Keep your eyes peeled for these snakes. Better get a reliable financial advisor to take care of your money. I imagine you thinking that these people are only interested in making money from you and not for you. Yes, to some degree, that is right. These people need to live and make a profit too. It is a business relationship, after all. Still, there are some interested in helping you preserve and multiply your wealth. And unless you have the skills to do it yourself, you better look out for them. Educate yourself on all sorts of money matters. Only an educated person can make good decisions.

Don’t buy a new car, clothes, and handbags.

Another trap to look out for is changing your spending habits too fast. Now that your Bank account looks like it could never run out of money, rest assured that it can, and it will. That Lamborghini you have been dreaming of, the Prada bag you always wanted, the watch you wanted to own for so long. DON’T FUCKING BUY IT. Only if you have a spending strategy. That is, make sure the money comes from a source of income that has nothing to do with your personal Bank account. How to do that? Put your money somewhere where it can generate recurrent income. As stated in Rich Dad Poor Dad, buy assets, not liabilities. What’s the difference? The difference is, assets put money in your pocket, the other takes money out of it. When you buy assets, you can use the profits generated from them to buy whatever you want. That way, your primary source of wealth won’t suffer. You could also reinvest it and create even more recurring income. How about that? Once your Investments generate enough monthly payment for you to live on without a care, you can go nuts.

Ok, don’t go nuts, please. Always be reasonable; money doesn’t like to be bothered too much. If you do, it will slip through your fingers like sand. I also recommend you get a checking account, so you don’t end up making impulse buying decisions. Let’s call this a protection from yourself for yourself. And for goodness’ sake, don’t take up credit cards either because they can rack up tons of debt pretty fast. Pay cash whenever possible. The money you don’t see leaving your hands is money you don’t feel, and thus you lose sight of how much you spend. The rich don’t stay rich by spending like crazy idiots. Again, educate yourself on how to invest to receive recurring income. I am not a financial advisor, but I’m also not an idiot either (not anymore). I’ve experienced too much stupid shit with money, and I know it’s dangerous and tempting.

You also want to save your money for emergencies so that you’re not swept away with the lifestyle change. Make sure you have enough saved to replace your income for at least six months!

Avoid the trap of keeping up with your rich neighbors.

Ok, now that you are rich, you may feel the need to flaunt your new wealth. After all, you made it! Right? You find yourself living in a new neighborhood, surrounded by other rich people. As you get to know your neighbors at dinner parties and other fancy events, you may feel the need to keep up with them. Suppress it immediately!

Why? Because these people have been rich their whole life. Becoming rich at some point in life and being born rich is like living in two different worlds. There’s no need for you to try and keep up with anybody. Besides, who do you want to impress? Your rich neighbors have their plans and know what they can or can’t afford. You don’t have to keep up with them. You are in a different race. Run at your pace. If you don’t plan to make it a marathon, you may end up broke sooner than you imagine.

Spend your money on things you need. Not on things you want. Don’t spend it because you have it!

Once you have upgraded to another financial level, the “need” mentality is another trap you will encounter. Your mind starts racing at a million miles per hour, thinking about all the things you need to do or buy. You get that feeling of I need this, and I need that. No, you don’t. What is it that we need? Nothing but a warm shelter, food, clothing, and water. Once you cover these needs, that’s it. Everything else is luxury — a status symbol, an unnecessary nice-to-have object. Grant yourself one wish if you must. One wish you have been thinking about for many years. That’s it. Please this itch and then focus on multiplying your money. Spending your money on things you “really” want but don’t need is a good way of wasting your money. Don’t spend it just because you have it. I told you before; money doesn’t like to be bothered too much. Had I bought tons of new stuff after my recent windfall, I would have no savings to back me up. It’s easy to fall for this trap.

Make sure you’re saving for retirement. Every bit counts.

Save for retirement. Whether you think you have a lot or not, every bit counts. Don’t fool yourself. Winning a significant amount of money does not set you up for life. Seventy percent of people who win considerable sums of money end up broke within a few years. That’s according to the National Endowment for Financial Education. Making sure you have enough for retirement helps a lot when you look back on your life. That way, you know you have enough money to care for everything when your time has come to let somebody care for you.

As we get older, the risk of medical care increases and the bills can pile up so fast you can’t even imagine. You’ll burn through your cash like a hot knife through butter. In such cases, other family members can get burdened with that load. Make sure to have everything in place to prevent such a burden for your family. Have some retirement fund that can generate interest over many years. Fill it up with enough money right from the start. That way, the compound effect will work its magic almost immediately.

Conclusion

People who suddenly find themselves with more money than they know what to do with inevitably encounter many pitfalls. Like buying things, they don’t need just because they can afford it.

The other point I like to highlight is how important it is to save for retirement. You never know what challenges life will throw at you. Make sure you prepare yourself for whatever comes.

If you win more money than you can handle, don’t fall for all the shiny things that look exciting for one or two months. Make sure you’re not going to regret buying anything in 10 years. Many of the things you buy won’t be worth half of what you paid when you have to sell them tomorrow. Don’t be a fool. Educate yourself on all sorts of money manners before making any purchasing decision.

Always buy assets and not liabilities. Assets put money in your pockets, and everything else takes money out of it. Finally, always consult a financial advisor. A lawyer, any professional who can help you keep and multiply your money. Do not take advice from friends and family. They mean well, but their advice is not the right one to follow most of the time. Get advice from a professional. If you are smart, you will have riches to enjoy for the rest of your life.

If you like this article, share it with your friends and subscribe to my Email List to never miss out on a new publication of mine.