In my time here on Earth, I have learned an incredibly valuable lesson about personal finances – it’s not how much money you make – it’s how you spend that money that counts.
At my live events, I meet people who make $100,000, $200,000, or maybe even $500,000 in income per year, yet their credit cards are being declined when they want to buy dinner because they have more debt than income. What happened? They have just discovered that making a great deal of money doesn’t equate to being able to live forever on a grand scale. If they made their money quickly, they never learned to handle a great deal of money, and it went out as fast as it came in. For example, in 2009, Sports Illustrated estimated that 78 percent of NFL players are bankrupt or face serious financial stress within two years of ending their playing careers and that 60 percent of NBA players are broke within five years of retiring from the game.
That is shocking, isn’t it?
Unless you are a star who makes millions a year, you probably have tried the conventional way of putting 10 percent of your paycheck away into a mutual fund or 401k. By now, you have probably realized that saving up a large pile of money will take forever.
But in the case of the people who speak to me at my seminars, making the money wasn’t even the problem. They had all figured out how to make a great deal of money and to make it fairly quickly.
They knew how to make the money, but they did not know how to turn that money into lasting wealth.
So how to use the money you make is the most important part of this equation. It doesn’t matter how much money you make, although making more speeds up the process. But what counts is what you do
with it.
Investing is definitely the answer.