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Abstract

20NBA%20players,just%20a%20handful%20of%20years.">78% for the NFL</a>. Allen Iverson was known for allegedly <a href="https://www.outkick.com/allen-iverson-hilariously-denies-claim-he-spent-40000-on-strippers/#:~:text=A%20former%20teammate%20of%20Allen,City%20Line%2C%E2%80%9D%20said%20Iverson.">spending $40,000 at strip clubs</a> while only having a <a href="https://www.celebritynetworth.com/richest-athletes/nba/allen-iverson-net-worth/">net worth of$ 1 million today</a>.What about rappers?Well, <a href="https://www.grunge.com/151067/rappers-who-lost-all-their-money/">there are plenty of bankruptcies there</a>. Most notably, 50 Cent was estimated to have a <a href="https://www.washingtonpost.com/wp-dyn/content/article/2010/12/17/AR2010121705271.html">net worth of half a billion dollars in 2010</a>. Yet 5 years later, <a href="https://www.rollingstone.com/music/music-news/50-cent-to-end-bankruptcy-case-with-23-million-payout-177395/">he filed for bankruptcy</a>.<h1 id="566c">Why Does This Happen?</h1>Morgan Housel, the author of “The Psychology of Money,” argues that we are taught to view money as a hard science and not enough like psychology (with emotions and nuance).When a building collapses, engineers can determine the cause by looking at the structural forces and identifying the weak points. But it’s harder to identify the actual cause when a market collapses because finance is guided by human behavior. And humans are stupid.We are not these all-knowing, enlightened, special little snowflakes guided by logic and reason. We are pig-skinned monkeys guided entirely by emotions with fleeting moments of clarity. The only things we care about are fighting, fleeing, feeding, and reproduction.And it’s human nature to indulge whenever we can. Our brains are wired for scarcity, not abundance. And even more so <a href="https://www.pnas.org/doi/10.1073/pnas.1818572116">if we grow up in poverty</a>, which many professional athletes and artists do.Think about your ancestors from thousands of years ago. They couldn’t just go to Costco and grab a $1.50 hotdog and soda combo. They had to forage

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for edible fruits or hunt wild game. They’d go days without eating anything, so anytime food was within reach, it was necessary to eat as much as humanly possible.And this doesn’t just apply to food. Hoarders fill up their houses to the point of making them unlivable because our brains haven’t had enough time to adapt to abundance. <a href="https://www.rubbishplease.co.uk/blog/connecting-domestic-hoarding-poverty/">A study on hoarding</a> argued that before the 20th century, stockpiles containing food, clothing, and other essential items were necessary for survival.<h1 id="a80e">So What?</h1>In summary, our brains have not adapted to deal with abundance. Instead, we still have a “use it or lose it” attitude, where we can spend years of our lives meticulously counting every penny and collecting paychecks with sweat-drenched hands. But all it takes is one moment of weakness to blow all of our hard-earned cash on sports cars, houses we can’t afford, and poker chips.Wealth is like a bucket of water that you fill up one drop at a time, but one mistake, and it all spills out at once.Your plan to manage your money is much more important than your method of obtaining it. Of course, having the necessary skills to earn an income is vital, but what good is your salary if you waste it all on liabilities?And your plan is much more than just dollars and cents. You need a solid mindset focused on generating and preserving your wealth because your life is a constant battle against others who want to scrape as much money away from you as possible.Don’t let emotion instantly ruin what took you years of your precious life to build.Thanks for reading!If you want my articles in your inbox, <a href="https://medium.com/subscribe/@tkirkpatrick404">Subscribe here.</a>If you want to start writing yourself to make some extra money, you only need a membership for $5 a month. You can sign up <a href="https://tkirkpatrick404.medium.com/membership">with this link</a>, which helps me a bit without costing you anything extra.</article></body>

Your Wealth Management Is More Important Than Your Income

What Good Is Your Salary If It All Goes To Waste?

Mike Tyson is a world-famous boxer who amassed over $300 million over his 20-year career. Note that when his career ended in 2005, $300 million at that time would be worth $450 million today.

Guess how much he’s worth today. $500 million?

Nope. Today his net worth is around $3 million.

Let’s talk about someone else.

Ronald James Read was an American philanthropist, investor, janitor, and gas station attendant. He worked on cars for 25 years and cleaned the floors at JCPenny for another 17. His hobbies included wood-chopping and collecting coins and stamps.

You probably see where I’m going with this. When Ronald died in 2014, he had a whopping $8 million in assets. Yes, you read that right. Google him if you don’t believe me.

You might be wondering if Mike Tyson is just an anomaly. Surely most multi-millionaire athletes amass a fortune like Shaq, Lebron James, and Michael Jordan, right?

Wrong. 60% of NBA players go broke within 5 years of leaving the league. This number explodes to 78% for the NFL. Allen Iverson was known for allegedly spending $40,000 at strip clubs while only having a net worth of $1 million today.

What about rappers?

Well, there are plenty of bankruptcies there. Most notably, 50 Cent was estimated to have a net worth of half a billion dollars in 2010. Yet 5 years later, he filed for bankruptcy.

Why Does This Happen?

Morgan Housel, the author of “The Psychology of Money,” argues that we are taught to view money as a hard science and not enough like psychology (with emotions and nuance).

When a building collapses, engineers can determine the cause by looking at the structural forces and identifying the weak points. But it’s harder to identify the actual cause when a market collapses because finance is guided by human behavior. And humans are stupid.

We are not these all-knowing, enlightened, special little snowflakes guided by logic and reason. We are pig-skinned monkeys guided entirely by emotions with fleeting moments of clarity. The only things we care about are fighting, fleeing, feeding, and reproduction.

And it’s human nature to indulge whenever we can. Our brains are wired for scarcity, not abundance. And even more so if we grow up in poverty, which many professional athletes and artists do.

Think about your ancestors from thousands of years ago. They couldn’t just go to Costco and grab a $1.50 hotdog and soda combo. They had to forage for edible fruits or hunt wild game. They’d go days without eating anything, so anytime food was within reach, it was necessary to eat as much as humanly possible.

And this doesn’t just apply to food. Hoarders fill up their houses to the point of making them unlivable because our brains haven’t had enough time to adapt to abundance. A study on hoarding argued that before the 20th century, stockpiles containing food, clothing, and other essential items were necessary for survival.

So What?

In summary, our brains have not adapted to deal with abundance. Instead, we still have a “use it or lose it” attitude, where we can spend years of our lives meticulously counting every penny and collecting paychecks with sweat-drenched hands. But all it takes is one moment of weakness to blow all of our hard-earned cash on sports cars, houses we can’t afford, and poker chips.

Wealth is like a bucket of water that you fill up one drop at a time, but one mistake, and it all spills out at once.

Your plan to manage your money is much more important than your method of obtaining it. Of course, having the necessary skills to earn an income is vital, but what good is your salary if you waste it all on liabilities?

And your plan is much more than just dollars and cents. You need a solid mindset focused on generating and preserving your wealth because your life is a constant battle against others who want to scrape as much money away from you as possible.

Don’t let emotion instantly ruin what took you years of your precious life to build.

Thanks for reading!

If you want my articles in your inbox, Subscribe here.

If you want to start writing yourself to make some extra money, you only need a membership for $5 a month. You can sign up with this link, which helps me a bit without costing you anything extra.