Why Not Even The Lottery Will Make You Rich Unless You Develop a Success Mindset
How many stories have you heard of people who’ve won the lottery and later lost all the money?
Or how about athletes who earned millions of dollars throughout their career and are now broke as a joke?
Unfortunately, it happens over and over.
But why does it happen?
Is it all due to poor decisions?
Yes and no.
Some people take initiative to educate themselves on the best decisions to make with their money and ensure they never go broke.
Others just spend and spend, thinking the money will never run out.
Then one day they wake up and wonder “What the hell happened here?”
Here’s the key to getting and staying rich:
You develop a success mindset.
And what does a success mindset mean?
Well, a couple of things actually.
For starters, it means that you have a financial discipline.
You see, having a lot of money can be a good or bad thing.
It can be great if you invest it in things that will help it grow.
Or it can be bad if you spend it all on things that depreciate quickly.
In the book Secrets of the Millionaire Mind, T Harv Eker does an amazing job at giving examples of how poor people think vs. how rich people think.
As you go reading the book, it becomes obvious why some people get and stay rich, and why others get rich and go broke.
One of my favorite sections in the book is where he speaks about Your Money Blueprint.
My favorite quote from that section that opened my eyes to financial discipline was:
“It’s not enough to be in the right place at the right time. You have to be the right person in the right place at the right time.”
So let’s use the title of this article to give an example of what he means with that quote.
Technically, if you win the lottery, you’re rich.
I mean, at least momentarily.
However, what does the average lottery winner do when they receive their money?
They buy a big house, go on an expensive trip, buy a nice car, and shop for a bunch of things they were surviving with before they won the lottery.
Did you hear me there just now?
…Things they were surviving with before they won the lottery.
In other words, they buy things they didn’t need before and sure don’t need now.
But hey, sometimes it’s understandable.
For someone whose worked their whole lives and never been able to enjoy themselves with the kind of entertainment a lot of money can bring; receiving a huge sum of money can trigger feelings of happiness and splurging.
I get it.
It doesn’t make them bad people.
However, it also doesn’t make them people who have financial discipline.
So what does it mean to have a financial discipline?
Look at what you can afford in the moment, but only buy the version below.
For example, if I could afford an Infiniti car, I’ll buy a Honda Civic instead.
If I could afford a Corvette, I’ll buy an Infiniti.
If I could afford a Mercedes S500, I’ll buy a Corvette.
You follow me?
No matter what I could afford, I always live below my means while taking steps to increase my income.
A success mindset doesn’t mean you can’t have and enjoy nice things.
However, just because you can afford something, doesn’t mean it’s a smart decision to buy it.
So for someone who wins the lottery, what’s the very first thing they should do?
Invest it in a way that will make them money forever and only live a lifestyle they can afford from their current passive income.
Passive income is money that generates on it’s own without you doing anything.
Next, they should save money from their passive income and buy assets while enjoying a little splurging here and there.
Assets are things that make you money.
In my article 5 Steps to Make a Million Dollars in 5 Years, I explain how you can purchase properties that are up for auction or in foreclosure.
These properties can be purchased cheap and most of the time require some kind of work.(Repairs)
You buy the property, hire someone to fix it, and flip it for a profit.
This is a perfect example of an asset.
It’s a smart move to make with your money.
You’re taking steps to make it grow.
You can also keep the property and rent it out.
That monthly rent you collect is passive-money.
It’ll be there every month.
The moral of the story is that you should always live below your means, continue to grow your money, and reward yourself with material things (if you want) only when they will not hurt your current financial state.
If you’re current monthly earnings (salary or passive income) combined with your monthly bills don’t allow you to save money and invest in things that will make you more money; you’re lacking financial discipline.
You’re not living below your means.
The harder you work, the more money you make and save, the more you increase your passive income; the more you can enjoy expensive things and splurges while still living below your means and never going broke.
It’s that simple.