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Committing financial suicide to fit in

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In an attempt to fit in, many people go out and buy new toys, cars, furniture, houses, and more just to show that they are successful. These people are what is called “new money.”

Old money” people on the other hand, focus on holding on to their money. Many will drive a used car so they don't lose thousands of dollars in depreciation. They don't have anything to prove.

The problem with the “new money” group is that their position is not solid yet, but they have spent everything they have coming in and gone into thousand of dollars of debt. If one little thing rocks the boat, they are up a creek without a paddle. They don't have a safety net to get them through.

It is wise to know that there are always things that can rock your boat – tax changes, regulatory changes, employee benefits, business slow downs, loss of a major client, stock market crashes, and so on. You have to have a safety net to help you get through while you adjust to the new reality.

Don't ever assume that the money will always just be coming in, because it won't. You always need to be focusing on bringing in revenue – not spending your fortune for show.

But Carole, you said that we need to project a certain image?”

Yes, that is true. You do have to shake off the poor mentality, and you do need to project a respectable image. But do you really need a Picasso or a yacht? Is it wise to have to pay a $1000 car payment?

My brother is a great example. He has the nice big home on the lake, the boat, the jet skiis, cars, motorcycle, takes ski trips, golf trips, …. Yet he doesn't have 2 cents to rub together. Whenever a shift happens, he has to start selling off his 'stuff' to keep his head above water. You think he would learn!

His stupid actions just make him look...well, stupid. Most people think he's an ass.

Don't lose your head. Staying rich is another challenge.


 

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