Something too good to be true usually is.
Choose carefully what you want.
Mo possibilities, mo cars, mo relationships and bills, but mo problems, jealousy, thoughts and questioning involved.
The grass isnât always greener on the other side since perception isnât usually reality and people are great at faking it till they make it.
Pick your poison. The more you earn, the more flexibility and freedom you have but at the same time less. You are scrutinized, judged, begged for, taken advantage of and have a grueling yet seemingly easier time getting around dreaded taxes to inheritance laws, upkeep of properties, and everything else you want to possibly possess and dust off with more.
After all, when we earn more, itâs natural to want to show off our hard work and luck so we feel we must buy more believing it will solve our internal problems yet instead it creates more hassle.
Mo cars, mo garages, mo cleanup, mo waste less time.
Hopefully as diligent personal finance readers weâve all witnessed our net worth increase during the longest bull market and been stashing our cash during this pandemic, you may have noticed securing honest and loving relationships gets harder with more. You always have to prove you are worthy of your wealth, have earned not inherited it, arenât spoiled and make sure people donât resent nor rely on you to pay for every meal.
Thankfully, an easy way to get out of this loop hole is by never revealing or showing off your wealth in the first place!
The more wealth one acquires, more often than not, the more difficult it can be to hold onto it especially with a lack of education, patience, and priorities. Just look at sports newbies earning $50m per year or lottery winners gifted a lump sum. They donât know what to do with that kind of money as they have never been exposed to it before! The first thing they do is of course spend it!
The best indicator of what will happen when you amass an amount you havenât dealt with before is how you spend half of it. How you spend one thousand is how you will spend one million.
Easy Hard, Hot Cold
Most people, specifically those who havenât attained true wealth (rich) which is considered having a net worth of at least $1.9 in the U.S according to Schwabâs 2021 Modern Wealth Survey, would consider more the better.
Yet when it comes to virtually everything from food to possessions, less usually means more. Quality over quantity. With people and money.
Strangely, the benchmark for being considered rich in the U.S. went down by almost 3 million from 2017 at a high of $5 million or more to be considered rich, also known as the top 0.8%. I suppose that could be contributed to tax hikes, inflation, the 2020 Fedâs stimulus pump and the recent recession in 2020 yet at the same time Americans are overall financially more secure than pre-pandemic.
The reason I bring up these stats isnât for you to brag or obsess over when youâll hit the 7 figure mark. In fact when you hit that million or your personalized wealth mark, you probably wonât notice nor care as much as you used to since youâll always be striving for more.
Almost everyone who has a net worth of above the survey amount, unless their wealth is comprised of 50%+ debt and in that case doesnât count, most likely have more than they need and more often than not felt the same as with less than half or more.
They let money dictate their life instead of them dictating where they use their earnings. In other words, money controls them not the other way around.
All in all, we always want what we donât have and donât realize that it is practically the same with a few thousand more. The 7th house wonât make you happier. The 1st one is the best.
More reward = more work vice versa.
The most common hassle being rich is preserving capital and investing it properly. As humans we have a tendency to want endlessly more and believe our chances get higher if we scored big or got lucky in the past although the universe has a way of telling us that it is unknown and if you try to plan or test your luck, it wonât work in your favor the next time around.
It is highly recommended to prepare for what you are getting into. No doubt we all would prefer to be rich and thereâs no problem with that but donât expect your problems to go away. You have to be more protective and in incognito to keep it.
Money wonât disappear if you take those few extra months and let it sit in your savings account or preferably in the compounding machine a.k.a Roth IRA instead of in speculative volatile securities that are bound to ride in a rollercoaster. Just like you have to pass a test to learn to drive, getting to understand your risk tolerance and horizon, asset allocation, legacy, intentions, future goals and limits are essential to earn more because after all thatâs the goal right?
Too Much Too Little
When you start accumulating too much of anything, overtime, it feel worthless and less. After your 3rd cup of coffee, you wonât enjoy it nearly as much as the first one since we are riding the hedonic treadmill. Up and down, enjoying it then not enjoying it and expecting more and more practically an addition.
Our pleasure declines as we expect more to be better but in reality, less = more. be appreciative of the things that cannot be replaced and savor that meal like itâs your first after intermittent fasting for 2 weeks (not recommended).
As someone whoâs been fortunate to grow up in an immigrant household that prioritized education, mental health, networking and living below our means through the stealth wealth lifestyle to get by and land where we are today, Iâve learned a thing or two from growing my wealth the slow and painful yet rewarding way.
I would say at this point Iâve mastered painful spending where above a certain limit or type of purchase, it will hurt to spend. Through that optional method, itâs saved me at least half of my wealth from just spending more wisely.
After all, there are only 3 things you can do with your money.
Spend
Save
Invest
Thatâs it and inside those areas there are a multitude of robust options that are more fun than the other which people tend to screw themselves up in.
The most common examples I see my wealthiest neighbors, colleagues and friends, you can read all about them here, make mistakes in with their wealth is assuming they need more than they have.
With more, itâs natural to want to upgrade yet research has proven a bigger home or better car wonât make you feel more content or proud in the long run because itâs mostly for show and to lessen guilt.
Yes a house is a true utility and an appreciating asset queen yet money is still money and no property will turn into an asset overnight. You still need to pay the maintenance, utility bill, renovate, clean, secure it and keep it so it stays intact and you receive a return down the road. You can read here why homes are the least deceptive asset on oneâs balance sheet.
Backup
Just because you have more options doesnât mean you need to utilize or snag them. This is very hard for people to wrap their heads around. I even see it at school. One of my colleagues was a terrific test taker in HS and tried to play a game with himself by not studying and relying on luck. (I donât recommend). Heâs gotten extremely lucky a dozen times, other times he still did well but not as terrific and overtime took more and more chances and eventually failed miserably in school. This is certainly not common by most students and I donât know any other that would do such a foolish thing but it seemed to work for a time so he capitalized on it and then it fell apart.
If you put in the work, the work will work for you. I sincerely believe that and if you donât, you might get lucky once or twice but you never know when it can come crashing down.
More risk = more reward or loose it all.
Choose wisely.
Another recent experience Iâve witnessed was with my colleague. He inherited a family fortune from his grandfather who started one of the largest consumer staple brands in the world. You might say my friend is lucky because he doesnât have to work a day in his life but in reality, he has more pressure because he now has to keep up the family legacy, get admitted everywhere his family went, study the same subjects, meet up and attend various boring upscale events as a non-preppy dude. This predetermined lifestyle not only skipped his childhood, he has no purpose outside of what his family wants him to do.
Too much of anything is a bad thing. It can be applied virtually anywhere since money is everywhere.
All in all, having more is great if you can use it to your advantage. Let the fruits of your labor work for you not against you and in order to do so educate yourself. Itâs the surest path to peace and less problems.