Spend Like a Millionaire
I don't really have a motto, but if I were to have one I would seriously consider the phrase "Spend like a millionaire."
Today I was thinking back on a conversation I had with my dad about people who win the lottery. We see them on TV advertisements like Publisher's Clearing House, all excited and dancing around. For now, let's ignore the fact that buying lottery tickets is an extremely poor investment strategy. Instead, just look at how the winners spend their prizes: cars, houses, vacations, and luxuries they could never afford before.
One third of lottery winners become bankrupt.
"The CFP Board made an offer to the National Association of State and Provincial Lotteries to provide the organization's members with information to distribute to winners. The Investment News article highlighted the lack of financial guidance many winners receive from state lottery agencies; estimates show that nearly one-third of lottery winners become bankrupt."
Source: Certified Financial Planner Board of Standards, Inc
I would link to the article itself for the preceding quote, but the link I found seems to have gone dead. But how can you possibly go bankrupt when you have all of this money? It's because those people are not spending like they are millionaires.
Huh?
My dad told me about an article he read where a journalist asked millionaires what their "secret" was. He hosted a conference at a fancy venue with lots of fancy food. He was surprised to see people showing up in old, cheap cars, wearing plain clothes. Some even commented to him that he spent too much money on the food.
(If anyone's interested in the reference I'll ask Dad if he can remember where he read it.)
So the millionaires did not spend money like they were rich. Their secret was wise investing and careful spending. I don't think I've been careful enough with my spending lately, but there is always time to improve if you catch yourself early. Save money early, retire a millionaire is the advice my finance professor has been giving us, and I think it's definitely a good idea.
Today I was thinking back on a conversation I had with my dad about people who win the lottery. We see them on TV advertisements like Publisher's Clearing House, all excited and dancing around. For now, let's ignore the fact that buying lottery tickets is an extremely poor investment strategy. Instead, just look at how the winners spend their prizes: cars, houses, vacations, and luxuries they could never afford before.
One third of lottery winners become bankrupt.
"The CFP Board made an offer to the National Association of State and Provincial Lotteries to provide the organization's members with information to distribute to winners. The Investment News article highlighted the lack of financial guidance many winners receive from state lottery agencies; estimates show that nearly one-third of lottery winners become bankrupt."
Source: Certified Financial Planner Board of Standards, Inc
I would link to the article itself for the preceding quote, but the link I found seems to have gone dead. But how can you possibly go bankrupt when you have all of this money? It's because those people are not spending like they are millionaires.
Huh?
My dad told me about an article he read where a journalist asked millionaires what their "secret" was. He hosted a conference at a fancy venue with lots of fancy food. He was surprised to see people showing up in old, cheap cars, wearing plain clothes. Some even commented to him that he spent too much money on the food.
(If anyone's interested in the reference I'll ask Dad if he can remember where he read it.)
So the millionaires did not spend money like they were rich. Their secret was wise investing and careful spending. I don't think I've been careful enough with my spending lately, but there is always time to improve if you catch yourself early. Save money early, retire a millionaire is the advice my finance professor has been giving us, and I think it's definitely a good idea.
posted by Andrew E | 9:21 AM
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