From Riches to Rags

Some individuals do obtain and come into contact with wealth at a certain point in their lives. Unfortunately, most people tend to be mistaken in their attitudes of being wealthy. Instead of using and building up what they have to their advantage, most of them tend to lose what they have acquired.

Here are some examples that fall under the following categories.

1) The False Rich
These are usually made up of professionals and corporate executives who earn a high income, but who spend just as much. They are the ones who drive the latest luxury cars, fly first class and dine at the finest restaurants. They appear rich and successful. However, the sad truth is that they are poor accumulators of wealth who have few positive cash flow assets. They roll their credit cards and have huge credit lines. Their bankers love them. As a result, they are usually just one to two paychecks away from being broke.

2) Those Who Inherited their Millions
These are a bunch of lucky bums who did not have to break into sweat to earn their money. Such instant millionaires usually do not understand the value of money, as they never had to slog for their millions. And, as a result, they spend like there is no tomorrow. This is why it has been proven time and again that inherited wealth never lasts past the third generation.

Those who strike the lottery also fall into this category. Because it was pure luck and not financial intelligence that thrust wealth on them, most of them tend to lose it all within a few years, ending up deeper in debt than ever before.

3) Highly Talented Celebrities
These are the ones who earned their millions not because of their financial intelligence but because they were blessed with a spectacular talent in singing, acting or sports. Because millions come easily to these stars, they easily spend it all. Unfortunately for them, no matter how much they earn, many eventually wind up broke and in debt.

Some sad examples are Mike Tyson, MC Hammer and Michael Jackson. Mike Tyson earned over $500 million over a few short years as the undisputed heavyweight champion. Because of his lavish lifestyle of luxury cars, huge mansions and Bengal Tigers, he ended up filing for bankruptcy. Pop star MC Hammer who sang the hit single ‘You can’t touch this’ made over $33 million in his career, but he too filed for bankruptcy.

King of Pop Michael Jackson earned over $700 million in his illustrious career. However during his molestation trial, his accountant testified that he spent $20-$30 million more than he earns every year, took loans of more than $415 million and is facing a severe cash crunch, causing him to default on his loan payments.

They are no end to stories of sports celebrities and movie stars who have earned hundreds of millions within a few short years and ended up broke and deeply in debt in an even shorter period of time. Why? Because lacking the ‘million-dollar mindset’, they could neither manage their money nor rein in their runaway expenses.

Without having a solid understanding of the principles of wealth, one may never truly be wealthy.

Why Are You Not Rich Yet

Let me first ask you this question, ‘why are you not rich yet’? .‘What has prevented you from getting the wealth you deserve?’

Spend some time to really ponder on this question and write down as many reasons as you can think of. It is important that you are totally honest with yourself.

Most people tend to say:

‘I have no money to make money’
‘I was born in a poor family’
‘I need to support my family’
‘I am too young/old’
‘I’m not smart enough’
‘ I have no opportunities’
‘ I lack the qualifications’
‘ I have an unsupportive spouse’
‘I lack the financial know-how’
‘I have no luck’
‘The economy has been down’
‘I made poor decisions’

Do any of the reasons shown here match the ones you have given? I want you to look at all the reasons you have been giving yourself and to take note of whether they are reasons that are within your control or external reasons that you think are beyond your control.

You see, most people go through life with the Victim’s mindset and this prevents them from ever changing their financial situation. When they don’t get the results they want, victims tend to give themselves lots of excuses like ‘I’m just unlucky’, ‘ I have no experience’, ‘I’m too old to earn more’, ‘I’m too young to be rich’, ‘I have no capital’, ‘I was born poor’ or ‘I’m not a creative person’.

The reason all these are lousy excuses is because we know that there are many examples of people who have created wealth for themselves, despite all these perceived disadvantages.

Victims also tend to blame everyone except themselves. When you ask victims why they are not rich yet they will say something like, ‘my boss won’t give me a raise’, ‘I don’t get any opportunities’, ‘my big family prevents me from saving money’, ‘the stock market caused me to lose everything’. And instead of finding a way to improve and change, victims spend their time complaining but don’t do anything about it.

The trouble is that when you give yourself excuses, blame others and whine, it means that someone else or something else is controlling your life and your (lack of) wealth. Since you believe that it is not your fault, then you are powerless to change it. If you have a victim’s mindset and hold doggedly onto the belief that external forces are controlling your wealth, then any strategies you learn will be of no use!

The moment you acknowledge that you create your own fortune (or lack of it), it means that you have given yourself the power to start becoming rich right now! When you learn the strategies of wealth creation, you will find that you can make money at any age, with any background, with little or no money and in any economy.