After you're a millionaire, will you go broke?

[Rickson9]

I'm not doing anything different now than when I had no money.

For better or worse, investing hasn't been difficult for me. If I went broke, I would know how to make it all back.

I recognized that I was a bad entrepreneur when I was young so I stayed away from that. It was a lot of work. Instead, I was better at identifying good businesses so I just focused on that - and road the coattails of others. I didn't make as much money as the entrepreneur, but the benefit was that I didn't have to work hard.

I don't have any emotion tied to money. Money just "is". If I do certain things, money comes in. If I do other things, money goes out.

Speaking for myself, deals don't "get bigger" just because I want them to. Deals get bigger because I just have more money coming in. When I started in the mid 90s $1000 was a big deal for me.

I "made it" in my early 30s (I'm still in my 30s), but I don't work hard at all. Most of the work is done by the assets I own. I do relatively little.

I had more "toys" when I was younger, but I don't have many now because I don't find them as fulfilling as I used to I suppose...

 

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[Russ H]

Imagine if you had $10 MILLION, tax free.

(or, in the case of the story below, you got $14M, and paid your taxes, and had $10M left).

If you put it into 30 T-Bills back then, you would have had an income of about $500,000 PER YEAR (more than $40,000 per month).

And after 30 years, you could get your $10,000,000 back.

Read what happened to these folks, instead:

familys-fall-from-affluence-is-swift-and-hard: Personal Finance News from Yahoo! Finance

-Russ H.

 

[Rickson9]

Imagine if you had $10 MILLION, tax free.

(or, in the case of the story below, you got $14M, and paid your taxes, and had $10M left).

If you put it into 30 T-Bills back then, you would have had an income of about $500,000 PER YEAR (more than $40,000 per month).

And after 30 years, you could get your $10,000,000 back.

Read what happened to these folks, instead:

familys-fall-from-affluence-is-swift-and-hard: Personal Finance News from Yahoo! Finance

-Russ H.

This was also discussed in the following thread:
A family's fall from affluence.


Best regards.

 

[MJ DeMarco]

Imagine if you had $10 MILLION, tax free.

(or, in the case of the story below, you got $14M, and paid your taxes, and had $10M left).

If you put it into 30 T-Bills back then, you would have had an income of about $500,000 PER YEAR (more than $40,000 per month).

And after 30 years, you could get your $10,000,000 back.

Read what happened to these folks, instead:

familys-fall-from-affluence-is-swift-and-hard: Personal Finance News from Yahoo! Finance

-Russ H.

Tales from the Sidewalk...

 

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[Kdthelegend]

My plan is to keep building multiple streams of income. I will take money from my primary source of income. Invest it in franchises, apartment buildings, basically any type of business that can generate money without me having to put alot of time into it. I will buy investments that create streams of income for the rest of my life. As long as I always know that I have cash flow coming in I am good.

My two primary businesses My Ebook Site and My Entertainment Company will give me the money I need to create these other streams of income. I will just keep building up my wealth I will mostly put my money into franchises and banking. I would like to eventually create my own bank. So I can have direct control of money.

As long as I keep on adding on income sources to my empire I should be good. I know how much money that I would need in order for me to buy certain things. Like in order for me to buy a million dollar house cash I would have 10 million in the bank.

 

[00N8]

I would like to eventually create my own bank. So I can have direct control of money.

Once you form a bank charter you must comply with various regulators like the OCC, OTS, US Treasury etc.

You may be surprised at how much control those regulators have on banks.

 

[AKN]

For the envious...

15 Music stars that went bankrupt
15 Athletes that went bankrupt

My favourite tale of financial illiteracy/stupidity as seen on how the lottery changed(ended) my life:
- Man wins lottery, lends millions to 'friends'
- Buys large mansion
- Woman takes note of money mismanagement, offers to provide financial assistance
- Transfers title to herself
- Man goes missing, later to be found buried after being shot
- Police easily track the woman because of title transfer and throw her in dyke prison for life

I take pride in building a strong foundation and educating myself in all financial disciplines. Tough times don't last, and anybody who has been in the trenches and endured financial struggle, and are still breathing should consider themselves lucky as they are able to learn from mistakes and not make them twice. Achieving and keeping wealth through hard work and sacrifice is a very humbling experience.

 

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[Andreas]

Being satisfied with material possessions is hard. People must appropriate more what they have in order to not be hungry forever. This is a technique that Stoics (philosophers) have invented which helps people renew their passion for what they already have.

Visualize that you will lose it all. See that Ferrari burning down or crushing off a cliff, Imagine an earthquake smashing the house down. Try it and you will see that it has a therapeutic effect. I don't have a ferrari or expensive house but over the days i learned to just stay with the material possessions that i already have which still serve me well. I'm very young and i'm surprised to still see my parents wanting to buy new bigger TV every2-5 years. Or when they plead me to tell them what new mobile phone i want for Christmas. It seems strange to not want new 'things'

 

[Rickson9]

Slowlane marketers are smarter than we give them credit for.

"Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption. The measure of social status, of social acceptance, of prestige, is now to be found in our consumptive patterns. The very meaning and significance of our lives today expressed in consumptive terms. The greater the pressures upon the individual to conform to safe and accepted social standards, the more does he tend to express his aspirations and his individuality in terms of what he wears, drives, eats- his home, his car, his pattern of food serving, his hobbies."

"These commodities and services must be offered to the consumer with a special urgency. We require not only 'forced draft' consumption, but 'expensive' consumption as well. We need things consumed, burned up, worn out, replaced, and discarded at an ever increasing pace. We need to have people eat, drink, dress, ride, live, with ever more complicated and, therefore, constantly more expensive consumption. The home power tools and the whole 'do-it-yourself' movement are excellent examples of 'expensive' consumption." - Victor LeBow, 20th Century U.S. Economist

 

[Pete799p]

I personally love that there are so many slowlaners out there if there wasn't who would we sell our stuff to. When I see people who I know have no money go out and buy "stuff" because it seemed like a good idea at the time I see nothing but $$ signs.

I would like to eventually create my own bank. So I can have direct control of money.

I am not putting down your dream but I wouldn't want to touch a bank with a 10 foot pole right now. The government has gone regulation crazy to the point where you have no idea whats going on now and even less about what they are going to do in the future. Too much red tape and better connected, deeper pocket players for me. I would be more of a private equity, hedge fund, VC guy until they over regulate them which they are trying to do as we speak. Plus these alternative funds allow more flexibility with your money allowing you to invest in almost anything you like.

On a side note I am looking to accomplish the same as you. I get bored easily and have always envisioned myself a serial entrep type.

 

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[GlobalWealth]

I had more "toys" when I was younger, but I don't have many now because I don't find them as fulfilling as I used to I suppose...

I find this also to be true. At one point I owned 27 motorcycles at once. Yikes.

I also had a nice motorhome and a few cars.

Then I was asset rich and cash poor. I think it was a way to show people how successful I was.

Now I have eliminated all of the toys and focus on 'experiences'. I have a couple of businesses and and much more cash rich, but from outward appearances seem poor.

Its a bit ironic actually, but I think it is common that when you are cash poor you want to flaunt success but when you have 'made it' as rickson9 stated, the flash looses a bit of its appeal. At least for me anyway.

 

[GlobalWealth]

Once you form a bank charter you must comply with various regulators like the OCC, OTS, US Treasury etc.

You may be surprised at how much control those regulators have on banks.

That depends on where you open the bank. In the US, yes you are correct.

But there are much better options for those interested in opening a bank.

 

[mmtprofile]

I agree that you need a plan to spend the money but not to get worked up in that plan.

Many times people "lose" their money for psychological reasons like "I'm not good enough" or something like that.
I'm going to say this because it applies. If you keep a money management system 10-10-10-70 for instance and never break it, you will never go broke. The only time I lose money is when I break my rules.



Thanks for the post.

 

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[The-J]

To be honest, I don't care about material things. I mean, I do love exotic cars, but I'm not so passionate about owning one.

I don't think I would go broke by buying things for people or buying things for myself.

What I want to have (for myself)

1) A computer with Internet access (plus a 3 TB HDD)
2) A comfortable couch for me and guests to sit and lounge on
3) A kitchen with an oven, a stove, a fridge, a microwave, a dishwasher and a garbage disposal
4) Running electricity, water, heat and AC
5) A guest bathroom
6) A queen sized bed
7) My own bathroom with a shower
8) A bus pass, a bicycle and a small car like a Toyota that I use only sometimes
9) A girlfriend (got it as of today's posting)
10) A TV to hook up to my computer or to play video games on
11) A gym membership or a place for me to practice martial arts
12) A cell phone (doesn't have to be a smart; if I run into dire straits with money I'm gonna cancel my data plan and get a flip phone that only has texting and calling)
13) The clothes that I already wear in a closet or drawers
14) enough bookshelves to house all my books

To be perfectly honest, that's all I really want for myself. I don't like big houses. I like to travel, but not that often. I like to go out for dinner, but only sometimes. I don't need material things. I don't like getting gifts for Christmas because then I have no idea where to put stuff; I'd rather get, like, money, or go to a party instead. I don't drink expensive alcohol, I don't eat expensive food, I'm not impressed by the expensive things money can buy. When I get my exotic (if I even decide to get one) I'll have it for, like, a year and then auction it off.

Money changes people, but all I want is the freedom of choice, not the things, the babes, or the lavish parties. My dream house would look like my parent's house, to be honest.

 

[Motivated]

Its a bit ironic actually, but I think it is common that when you are cash poor you want to flaunt success but when you have 'made it' as rickson9 stated, the flash looses a bit of its appeal. At least for me anyway.

So damn true

 

[socaldude]

I think its all about keeping your expenses PREDICTABLE and having a CLEAR limit on what you can or cannot consume.

If your expenses are not predictable then how the hell are you suppose to make a budget?

Just like a manager at a big company; cash inflow and cash outflow has to be relatively EASY to predict.

If you walk into Macy's wanting a pair of shoes but you walk out with a fur coat, 5 pairs of jeans, some seven jeans and a hugo boss dress shirt then YOU are unpredictable and so it follows that your EXPENSES will be UNPREDICTABLE.

So in other words, you have to set your LIMIT or your ENOUGH and be faithful to it at all costs or else you will just keep buying more and more stuff.

CLEARLY know what you want(cash outflow) and make sure it doesn't exceed your cash inflow.

Then to top it off I will keep a huge margin of safety by having 5 or 10 million dollars in low-risk, highly liquid assets.

:smx9:

 

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[socaldude]

Now I have eliminated all of the toys and focus on 'experiences'

So damn true. I just finished a book today called "breaking the spell" by debbie lachusa after mj said it was good. It really confirmed what i thought all along.

 

[oddball]

I think about this all the time actually. I remember reading about someone on here who made millions but then lost it all to living out of their means, since then I thought about how I would keep it. Obviously when you start a project, you think of the end goals and make it big and what you would buy. In all honesty, now I think like "ok, I would buy myself a house (nothing extravagant), I'd at least get a lambo, but then I'd focus on investments." My big thing is I would start building a real estate portfolio. Starting small with 2-4 family units learning, and slowly keep building it up. Along the way, I'd buy myself more cars but I would always focus on building more wealth. If the app route pans out, I will keep building them. Why stop if it works? I would not be someone who retires and quits working, I like the hustle too much.

 

[The-J]

Paper millionaire? Maybe. If a deal goes badly, I could be out all my money. I think andviv had a story about this.

Liquid millionaire? Not likely. If someone handed me a million dollars right now, I'd about $900k of it and put it into passive income investments. The rest I'll put into my business. If I hit the million dollar threshold along the way, I'd get dinner with friends as a celebration then keep going till I hit my $6 million mark.

 

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[socaldude]

I should also add that in order for us to find our "limit" or our "enough" we have to completely dump the beliefs and identities we adopted by society regarding wealth.

Society says we should all strive for the latest and greatest! Society says over consumption is wealth! Society says wealth is being glittered with stupid shiny bling bling, seven jeans, expensive purses. Nothing wrong with that stuff. But let me ask you do you strive for this stuff because its part of YOUR identity? OR is it because you strive for it because society created your identity? When you walk around with your pants down and talk like a gangster thug, did you shape your own identity?? or did you mindlessly adopt it and let someone else determine it? hmmmmm...

The faster you can form/shape your OWN identity and beliefs the faster you can find your enough or limit when it comes to consumption. And the faster you can truly be happy.

 

[MJ DeMarco]

I posted this over at my FB page...

It was a beautiful 80-degree day of sunshine. I walked into the garage and once again, opted to drive my "no drama" Toyota over my Lambo. This was when it hit me: It was time to let it go... I've been officially "Lamboless" for 2 weeks and surprisingly, I don't miss it. I wonder if this is my mental age finally catching up to my physical age.

In the comments section, people asked "what was next?" and I replied that for the first time in my life I had NOTHING on the radar that I wanted. I suppose if I was concerned about image or lacked self-worth I would go out and buy a Mercedes or something "millionairesque" but I don't even want that. It's strangely liberating although I'm sure the feeling is made in part due to simply being able to say "been there, done that".

My current car, a Toyota, is over 6 years old and asks for nothing; No drama and very little maintenance cost in terms of time and money. The car "says" absolutely nothing. (It doesn't say "Im rich!" or "I'm poor" -- it says NOTHING!)

Now, I'm sure this could all change when I see something that "I gotta have!" but its been years since that happened.

 

[BeingChewsie]

So damn true. I just finished a book today called "breaking the spell" by debbie lachusa after mj said it was good. It really confirmed what i thought all along.

I am reading that book right now. Our story was so similar, we just went mental between 2000-2008 with spending and investing and running ourselves into an almost $200,000 pit of debt. I'm so over it. The last three years of rebuilding our lives has been so freeing and has completely changed the way I view consuming. There is just nothing I really want, I'd rather any money that doesn't go to bills be out there working for us. That satisfies me.

Sue

 

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[PatrickP]

I posted this over at my FB page...



In the comments section, people asked "what was next?" and I replied that for the first time in my life I had NOTHING on the radar that I wanted. I suppose if I was concerned about image or lacked self-worth I would go out and buy a Mercedes or something "millionairesque" but I don't even want that. It's strangely liberating although I'm sure the feeling is made in part due to simply being able to say "been there, done that".

My current car, a Toyota, is over 6 years old and asks for nothing; No drama and very little maintenance cost in terms of time and money. The car "says" absolutely nothing. (It doesn't say "Im rich!" or "I'm poor" -- it says NOTHING!)

Now, I'm sure this could all change when I see something that "I gotta have!" but its been years since that happened.

lol I am exactly there myself. I drive my 2007 Honda Fit with 185,000 miles on it rather than my Viper which I have to walk past to get to the Honda.

I was going to sell it also.

Only reason I don't sell it is because I gave the keys to my son to drive when he wants too.

I too have nothing going on now either. Life is GREAT but very slow and boring so I hope to get another business going.

 

[JEdwards]

I know what you guys are feeling.

I drive the Bentley mostly cause sometimes taking the Ferrari makes me feel like I am putting on airs...

 

[theBiz]

I too have nothing going on now either. Life is GREAT but very slow and boring so I hope to get another business going.

Hey Patrick i PM'ed you did you get it? Did you get it? Incase you didnt get it, i sent it again.. did you get it? I read in your post you hope to get another business going, well it is your lucky day. I have no formal training or experience but have TONS of ideas. Like this one idea of a spaceship.... right, its a spaceship we just have to build it i have complete business plan on how it will blow up...next is a store, a book store like borders except we will not be dying and going out of business because we are going to have a twist, books with cooks i want to call it.. the domain was already bought but dont worry i already bought books-with-cooks.net so were safe... you can order a burger and sample books at the same time(if anyone steals that i will take legal action immediately with an online lawyer)

EBIT
ROI
REVENUE
GDP
ACCOUNTS RECEIVABLE
P&L STATEMENT
INCOME STATEMENT
Utilizing CATS in youtube videos to go viral

Now that you see i am the one you want to invest in, you must first sign an NDA, non-compete (not incorporated yet but still sign it to "anonymous"), tell me how much you want to invest $50k minimum-$100k max Our private placement memorandum is done and cost over $10k and also i am only giving away 10% for the spaceship company and 14% for B-W-C
Oh and BTW i have some investors REALLY interested right now so let me know asap these ideas are ready to explode and only the lucky will get in on these ground floor opportunities.

Get me at http://www.investinthebiz.com

 

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[PatrickP]

It is official I now HATE YOU BIZ!

Your post had me laughing so hard I had a coughing fit and think I broke a rib lol

Ok maybe not broke it but bruised it at least.

YOU GOT ME dang it!

 

[socaldude]

I suppose if I was concerned about image or lacked self-worth I would go out and buy a Mercedes or something "millionairesque" but I don't even want that.

I went through a similar "identity shift" or "shift in focus" about 2 years ago.

I used to spend all my money on designer clothes; dress shirts, seven jeans, hugo boss dress shoes and dress shirts etc. I mean I was a walking advertisement for Nordstrom and Bloomingdales.

Until one day it just hit me: I buy this garbage to fill a void, to mask an insecurity. I was basicly a tool adopting the mainstream path of over consumption, attention seeking, and impressing.

Now fast forward I just wear $20 Levi's some Nike walking shoes and a blank sweatshirt bought on Amazon for $12.

And you know what, I'm happier than ever. Almost proud of my simplicity and self choice of style. I say to myself "this is me, this is what i want" not what society wants.

I mean look at Steve Jobs, he didn't wear designer clothes despite being a Billionaire, he wore Levis and some old a$$ New Balance walking shoes. (Funny he preached "think differently")

Now I just spend my money on books from Amazon. Reading a good novel with my girlfriend on a comfortable sofa is all I need to be happy.

Today all I want is Time and Freedom to do what I want with family and girlfriend. Just to be left the hell alone.


I look around and all I see is people wasting 12 hours at shit jobs instead of wanting to use that time spending it with loved ones. They spend all that time working so they can afford the BMW, the big 4,000 square foot house they can't afford, the designer clothes, the fancy gadgets.

Seriously how about you pursue the Fastlane so you can have FREEDOM with your loved ones? And stop chasing this stuff that is not gonna make you happy and frankly not gonna help you.

Nothing wrong with that stuff but that should be the icing on the cake. All that stuff should be something YOU want not something society says you should have.

Seriously your time is limited, you are not gonna be on your death bed wishing you worked more hours at the office or bought more stuff.

Seriously once you release yourself from society's over consumption culture of "let's see who has the coolest stuff". You find peace in yourself and you begin to see whats really important to you. And frankly you become WAY happier.

All you need is your Freedom and your loved ones IMO.

 

[Nathan Moreno]

I went through a similar "identity shift" or "shift in focus" about 2 years ago.

I used to spend all my money on designer clothes; dress shirts, seven jeans, hugo boss dress shoes and dress shirts etc. I mean I was a walking advertisement for Nordstrom and Bloomingdales.

Until one day it just hit me: I buy this garbage to fill a void, to mask an insecurity. I was basicly a tool adopting the mainstream path of over consumption, attention seeking, and impressing.

Now fast forward I just wear $20 Levi's some Nike walking shoes and a blank sweatshirt bought on Amazon for $12.

And you know what, I'm happier than ever. Almost proud of my simplicity and self choice of style. I say to myself "this is me, this is what i want" not what society wants.

I mean look at Steve Jobs, he didn't wear designer clothes despite being a Billionaire, he wore Levis and some old a$$ New Balance walking shoes. (Funny he preached "think differently")

Now I just spend my money on books from Amazon. Reading a good novel with my girlfriend on a comfortable sofa is all I need to be happy.

Today all I want is Time and Freedom to do what I want with family and girlfriend. Just to be left the hell alone.


I look around and all I see is people wasting 12 hours at shit jobs instead of wanting to use that time spending it with loved ones. They spend all that time working so they can afford the BMW, the big 4,000 square foot house they can't afford, the designer clothes, the fancy gadgets.

Seriously how about you pursue the Fastlane so you can have FREEDOM with your loved ones? And stop chasing this stuff that is not gonna make you happy and frankly not gonna help you.

Nothing wrong with that stuff but that should be the icing on the cake. All that stuff should be something YOU want not something society says you should have.

Seriously your time is limited, you are not gonna be on your death bed wishing you worked more hours at the office or bought more stuff.

Seriously once you release yourself from society's over consumption culture of "let's see who has the coolest stuff". You find peace in yourself and you begin to see whats really important to you. And frankly you become WAY happier.

All you need is your Freedom and your loved ones IMO.

My God, that was poetic. Good stuff bro! It just occurred to me earlier today, we are creatures of will. This freedom allows us to express our will. When people tie themselves down with all the crap, and live out of their means to have that image of success, they sacrifice their will in the process. They sacrifice their freedom.

 

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[MTF]

@Vigilante, @AllenCrawley, @Andy Black, @MJ DeMarco, this thread is super old, but I believe it deserves a GOLD tag and should be required reading for everyone here. Sooooo many great posts in this one.

 

[SteveO]

Wow... I remembered making some of these posts as my empire crumbled. I also remembered them as things were building back up.

Blast from the past....