Josh Elledge - Chief Executive Angel
Due to extensive media coverage of lotto winners, you may already know that more often than not, recipients of large windfalls are broke again within a matter of years. Along with others, you may be thinking, “How could they let that happen? I’d never do that. If I won, I’d be smart with it!”
While I hope you’d be smart with any sudden wealth, no matter the source… I want to examine together the truth that money only makes you more of what you already are. You see, you may never get a huge amount of money all at once, but the average household in the United States sees more than $1.5-$2 MILLION dollars pass through their hands in a lifetime. What are you doing now with what you’ve been given? Since it’s true that habits you have now are only accelerated by more money – it pays to make good habits – and not follow in the foolish footsteps of broke people.
A couple weeks ago, I disclosed a truth about millionaires that may have surprised you – they are coupon clippers. Obviously, this isn’t their only good habit. Millionaires follow strict principles – day in, day out, month after month, year after year. They don’t expect to get rich quick. But they do plan to get there. And more people than ever are getting there. In fact,most millionaires in the United States today are first generation. And they didn’t win the lottery or inherit it; rather they slowly built wealth by avoiding stupid habits and cultivating wise ones…
Trait #1 – They don't play the lotto or gamble much at all. I used lottery winnings as an example of sudden wealth, but millionaires don’t typically play the lotto or gamble. They know that the “house always wins” – and they’d rather it be their house that wins. If you regularly gamble at all, you’re simply giving your money to another “house”.
Trait #2 – They live within their means. Smart millionaires live in modest houses, buy and drive used cars (with cash – no payments), and are careful about purchases for necessities. In contradiction to this approach, sudden-wealth people run out and spend money like water. They buy an expensive house (sometimes several), get brand new cars, and buy overpriced goods. What about you? Do you always have credit cards and car payments? Mortgage suffocating you? Too much “retail therapy”?
Trait #3 – They rarely throw expensive parties. One of the commonalities cited between broke lottery winners is wasting a lot on parties. Millionaires are careful to not overspend on any party; hunting for reasonable prices on necessities. If you already do this – even during the holidays – score one for having a millionaire mind set! But if you find yourself throwing caution to the wind during football season and the holidays, it’s time to reign it in.
Trait #4 – They take reasonable vacations. Lavish vacations is another jointly held money-waster of broke lottery winners. Careful millionaires, on the other hand, choose their vacation locations and expenses wisely, standing in line for the same bargains as the average spender. Spending too much on vacation doesn’t make it any more enjoyable. How do you do at this? Do you research the lowest prices? Go during the off-season? Pay cash so your vacation doesn’t follow you home as new debt?
Trait #5 – They are generous in the right ways. It may seem counter-intuitive to give away money to become wealthy – but it is a sound principle. The key is to give to right causes, in wise moderation. Some previously wealthy people acknowledge their own generosity as their downfall. They gave and gave until they themselves were in need. Countless requests from family, friends, even strangers, were too overwhelming. It is good to help others, but never to the point where you are left needing help yourself. Conscientious millionaires carefully consider and investigate requests before giving. They know that just because you can give, doesn’t automatically mean you should. If you find yourself always bailing out others who never change their approach to life and money – stop. You are only enabling them to continue a cycle of poor choices, while causing yourself unjust financial strain.
Trait #6 – They had, and still have, a plan. Millionaires didn’t become so by accident. They made and executed a plan over time. Every dollar had – and still has – a purpose. Sudden millionaires rarely have a plan, and sadly, didn’t stop and make one after their windfall. Money is currency… and it will flow away from you without a plan. Do you have a plan for your money and future?
