Let’s assume that today I gave you $10 Million? What would you do with it? According to several studies and general history; you would blow it and have nothing in three to five years. Money and money management is a mindset.
At the most basic level; you must have the volition to withhold the urge to make impulse purchases. Impulse purchases can be quite damaging, especially large purchases. $1 coffee cups per day won’t break the bank, but randomly deciding to eat out could easily break the bank.
Back to the financial windfalls; if I gave you $10 million; my immediate guess is that you would pay off your debts, pay off your friends’ and family’s debts, and then start to buy yourself some fancy purchases. According to USA Today, the average household debt is 137,000. Most would pay this off right away; then slowly start spending it on grander purchases, new houses, new cars, a boat perhaps, luxury vacations, new furnishings for the houses, bad debts to friends and family. Then the IRS will come and seek what is owed to them. The State department of revenue for your domiciled location will want their due. The county of your domicile will want what they are owed. It all adds up and ends with 70% of lottery winners declaring bankruptcy.
It is time for you, as an individual, to start thinking differently about money. It is not an end; it is a means to an end. It is a tool to be used as a medium in commerce. Instead of buying consumables or things that cost you money; you should consider buying things that generate you money.
I am writing this on the eve of Christmas Eve because this is a concept that is near and dear to my heart. The consumerism that Christmas drives forces up credit card balances. Remember that things cost money; look for things that generate you money instead. As past Christmas presents; I have bought family members shares of stock, financial literacy books; and a multitudes of other self help courses. Naturally, these were all rejected as useless, but I am encouraging you, the reader, to think outside the box and start thinking about how you can invest, as opposed to spend.