Wealth is the abundance of any valuable possession or money. Becoming wealthy and staying wealthy are two different skills. Morgan Housel in his best-selling book ‘The Psychology of Money’ says keeping your wealth requires the opposite of taking risks. It requires humility and fear that what you’ve made can be taken away from you just as fast. Staying rich involves just a few simple things such as self-awareness, modesty, and the ability to delay gratification with a portion of your earnings.
Humans have a tendency to spend money on status symbols. Even when a person can not afford an iPhone, he would still buy one on EMIs (Equated Monthly Instalments). Buying assets to flaunt your wealth will only make you poorer. If you don’t stop buying things you don’t need, you will soon have to sell things you need. In your early years, debt is the worst thing you can take. Compounding is considered the 8th wonder of the world, instead of benefitting from it, people are becoming prey to it.
Mike Tyson, also known as the baddest man on the planet, is the perfect example to learn how money is not to be spent. At the peak of his career, his net worth was estimated to be $400 million USD. He could easily earn $30 million dollars for one single fight. His net worth was estimated to be $400 million USD. He spent so much on his extravagant life that in 2003 he became bankrupt. He purchased a gold bathtub that cost him $2.2 million, mansions, jewellery, cars, and a Siberian tiger named Kenya.
Tyson is not the only person, there are numerous people like Vijay Mallya, Sean Quinn, Jocelyn Wildenstein, Elizabeth Holmes, and many more who failed to retain the wealth they had created. So we should absorb something from their life and not make the same mistake.
Is staying wealthy really so difficult? Well, it’s quite subtle. First, you need to understand that looking wealthy is completely different from being wealthy. Changing the mindset is the first step. Then comes paying off your debts, especially the high-interest ones. Next comes saving and investing. Saving is important because knowing that you have a safety net if you fall is soothing. And investing, start doing it as soon as possible, otherwise, inflation will eat away all your money. Start making short-term and long-term financial goals and review them regularly.
People often degrade the value money brings to lives. “Money is something we burn our lives energy for”, so always try to stay wealthy.