There was a study made in 2010 by researchers at Vanderbilt University, the University of Kentucky and the University of Pittsburgh. The authors looked at lottery winners and separated them into two groups: those who won sizable cash prizes (between $50,000 and $150,000) and those who won more modest prizes of $10,000 or less. Research shown that 5 years after they won, the big winners were the one more likely will file bankruptcy that means an extra-big lottery prize means you've got an extra-big chance of going bankrupt.
Winners but broke
What do you do if you got tons of money? Do you know how to swim on water?
From womb to tomb that’s how we summarize the involvement of money to us. Maybe you are not familiar on how to swim in the ocean of money today. What is important is you should start first in a kiddie pool and have fun.
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Can you imagine what to do with the money that you will have if you just won the Mayweather vs Pacquiao fight? Hmmm.. maybe you are thinking about the house that you will buy or the things that you want to acquire. Stop and wait!.No need to rush in making decisions.
DilemmaThere was a study made in 2010 by researchers at Vanderbilt University, the University of Kentucky and the University of Pittsburgh. The authors looked at lottery winners and separated them into two groups: those who won sizable cash prizes (between $50,000 and $150,000) and those who won more modest prizes of $10,000 or less. Research shown that 5 years after they won, the big winners were the one more likely will file bankruptcy that means an extra-big lottery prize means you've got an extra-big chance of going bankrupt.
Winners but broke
What do you do if you got tons of money? Do you know how to swim on water?
If yes then we will apply what you know in personal finance. If you don’t know how to do it then let us explore the things you need to do before the swimming time.
1. Assess your skills and values - In personal finance it’s more of behavior than the money. Admit that you don’t know everything and you will not be able to know everything. At least you know something. You got fears that once you got this big sum of money you might lose it. That is typical. By simply assessing your values you will be aware where will you spend it. Developing a master plan or budget will help you visualize how to attack your expenses and save your money.
2. Check the depth -Before you swim you need to make sure that you know how deep and wide is that pool or you might injure or drown yourself once you suddenly jump into it. Same thing goes with large sum of money that you are not expecting. It’s either you spend it all or you give it all. Proper assessment will help you maximize it.
3. Discipline yourself - Daily grind that’s what the normally Olympic swimmers or athletes do. In terms of finances It will take a lot of effort to simply change your behavior that’s why before you swim with this tons of money make sure that you were able to manage your behavior. Spending is easy especially when you got moolah (Money) but it will be easier to keep all those funds if you understand how you behave towards saving, spending and investing.
4. Unlearn the things that you know - Changing your perspective towards money is a sign of growth. Back in the days when the smart phone are still not a trend. I had issues with my inbox because the normal capacity of it was only 150 messages but whenever I’m not deleting unimportant messages it keeps on piling up and the important messages are not being receive. Like Elsa said in the famous Frozen line “Let it go”. The more you take care of that wrong mindset the more you will have a problem moving on. All swimmers move forward.
5. Practice everyday - When you swim everyday your body starts to adapt on how to learn to properly breathe, develop proper form and move all your muscles on the water while you do all the necessary strokes but to relate it in personal finance we need to develop the muscles of discipline, diligence and patience. Henry Sy never built his empire in just one day. Apple Inc success was not overnight. They practice proper form in their finances while they are still small and when they become big they also practice it and that’s why success for them is systematize and not just out of luck. Practice what is right.
6. Join a club - Many aspiring swimmers at the start don’t know how to swim properly, I still remember that whenever they are in the pool they try to pretend that they know everything and swim on the side where they are comfortable but they end up not learning at all. The good thing about of joining a certain club is you start to develop your motivation because someone is going to encourage you to move to another level.
From womb to tomb that’s how we summarize the involvement of money to us. Maybe you are not familiar on how to swim in the ocean of money today. What is important is you should start first in a kiddie pool and have fun.
David Isaiah Angway is a Financial Evangelist
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