Michael Jackson couldn’t repay the $25 million loan he took out for Neverland. So in 2007, the most successful entertainer of all time, with thirteen number one singles under his belt, declared bankruptcy.
Don’t be like Michael Jackson.
After blowing your bonus on a bigger house or a faster car, you may find yourself standing still financially. Back where you started in terms of building wealth.
In actual fact, you are not standing still. You are now going backwards.
By increasing your standard of living – aka your monthly expenses – you are making it that much harder to cover them in the event of illness, unemployment, or unforeseen (but guaranteed to happen at some point) expenses.
You have effectively built yourself a bigger hamster wheel. Now you need to keep running faster and faster to keep it turning.
A bad month or two could wipe out your savings.
This tends to hit hardest those who think they have a lot of money. This is one of the main differences between those who build wealth gradually, and those who just have a lot of money. Builders value it more. You will have worked harder to get it, and you won’t give it away easily.
It might not be sexy to tuck money away in a savings account every time you earn a bonus, or to bump up your monthly savings when you receive an increase. Not as sexy as that new Porsche you’ve had your eye on. But how sexy is begging your family for a handout when the Porsche has been repossessed and the bank has taken away your mansion?
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Stop living from salary to salary. Achieve Financial Independence. Retire Early. Join the FIRE movement igniting the world.
Follow these weekly posts for solid advice on how to escape the rat race, covering material contained in Hard Money.
This is no get-rich-quick scheme. It won’t be easy. That’s why it’s called Hard Money.
Work while they sleep. Learn while they party. Save while they spend. Then live like they dream.
Anyone in Johannesburg who would like a signed copy (of any of my books) can have one delivered to their door by Big Bad Wolf Motorcycle Maniac Deliveries. No charge for delivery.
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