Being Wealthy: How To Manage Your Wealth And Enjoy The Fruits Of Your Labor
Episode 371: Being Wealthy: How To Manage Your Wealth And Enjoy The Fruits Of Your Labor
While it is absolutely true that money doesn’t and can’t buy you everything, it does solve a certain amount of the hand-wringing that people who are significantly less fortunate do throughout their lives. But life as a wealthy person can’t be – and isn’t – all fun and games; there are decisions that you will have to grapple with most of the time. Mitch Stephen talks about managing wealth and the choices you must make when living life as a wealthy person. Money can bring about its own share of problems, so you have to be ready for whatever comes your way. Be prepared to come into your own wealth in a productive and responsible way that still leaves room for you to enjoy the fruits of your labor!
Watch the episode here:
I’m here by myself. I’m going to talk to you about some thoughts that I’ve been having on a certain topic and the topic is the problem with being rich. If you think being wealthy is a piece of cake, you might want to think again because there are obstacles to overcome and decisions to make. Sometimes the more money you make, the bigger these decisions can be. If you handle them well, you won’t be happy and wealthy. You might be wealthy, but you won’t be happy and wealthy.
The problem with being rich seems an oxymoron. Why would being rich cause a person problems? There are cases all over the news, the TV stations, the airwaves and the internet of people that having an abundance of money hasn’t served them well. Would they have been in demise if they did not have money? Who knows? Maybe they’re destined to be in demise no matter what income level they have. It suffices to say that wealth does bring larger and bigger temptations and options. Some of those options that you can have because you have money are not great options. One of the first things I’d say is if you could keep your wealth to yourself, it would serve you well.The more money you make, the bigger your decisions must be. Click To Tweet
It’s very hard to not share that you’re successful with the people around you. If you don’t share it with them openly and outwardly in communication, it’s still hard to hide sometimes because they can see. They see the new car you’re driving, the new house you bought and the neighborhood you live in. They don’t have to be a rocket scientist to figure out that you have done well financially. The first thing that happens is family members. I hear it all the time. I see it all the time. I didn’t experience it very much myself, but I hear about it an awful lot. First of all, the successful person tends to want to hire or put their family in their business. I’d like to call it a bad move but it’s a tenuous move. I understand maybe your wife or your spouse because they’re inherently involved in the business whether you like it or not. They legally own half of it most of the time so that’s natural.
The other thing about making your spouse an integral part of your business is that the whole point of this business is to become free and to be able to do what you want when you want with the people that you love. It’s bad enough trying to figure out how to get yourself on vacation for a month, much less yourself and another integral part of your business that your spouse is handling. Be careful when you’re planning your business out in the future that you don’t put so much your family in important positions that when it comes time to vacation, you all can’t go together. I’ve had that happen and I’ve seen that happen with a lot of people.
The other thing is getting the family is stressful in the fact that it’s not like a hired employee. What I like about hired employees is that if they’re not doing a great job or we don’t see eye-to-eye, I just cut them loose. I let them be their own person and find their way someplace else. When you start contemplating letting loose or even firing a family member, you’re talking about a whole different set of issues. The emotions of the whole thing, how much you love them, even though they’re not doing a great job can cloud your decisions on how to run your business. Businesses are black and white. They don’t know nor do they care about your love for your daughter, son, or wife. The business needs someone to run it and run it right. If it’s not being run right, the business doesn’t care. The business says this person has to go and you need to get someone else that can do a better job. When you have a family member in that position, it’s tough.
The other thing about family members and you being wealthy is they’ll come for loans. If you happen to be wealthy in business and those around you can see it or know it, it gets difficult to deny someone a $2,000, $3,000 or $5,000 loan. They’ll look at you and say, “You have it. You have more than you need. Why can’t you loan me some money?” I personally have been able to avoid a lot of that by saying these exact words, “I don’t loan money. That’s not what I do. I have never done that and I’m not going to start now.” Personally, if I decide to help them with their financial issue, then it’s a gift that I’m going to give to them. I’ll tell them, “You don’t need to pay it back. I don’t want you to pay it back. Take this and do what you will. I’m not going to do this again. Instead of this being a loan, it’s a one-time gift, but I won’t do it again.” Even that’s hard to tell someone you love. That’s the subject of family.
There are vices. If you have vices, they tend to expand when you have money. A lot of people I know stay busy or don’t go into retirement. When they’re transparent with me and talk to me straight face-to-face, they’ll tell me, “A person with a lot of money and a lot of idle time, with still a lot of youth and energy left in them can get into a lot of trouble.” They found that it was better if they stayed busy to do something instead of having all that idle time. A lot of people that retire get bored or die shortly after that. Usually, they get so bored that they can’t see straight because they want and they dreamed about being able to play golf all week long, but their friends can’t play golf all week long. They have jobs and so there you are by yourself playing golf. I suppose you could meet some other wealthy people out on the golf course and solve that issue.It's very hard not to share that you're successful with the people around you. Click To Tweet
Most people don’t transition that well. They’re going to keep their same old friends. If their same old friends can’t come, then they probably would rather go back to work. A lot of them do that. They go back to work to keep their juices flowing, their mental savvy at top levels and to avoid those vices. As I said, a person with a lot of money and a lot of idle time that still has a high or moderately high energy level can find themselves in the wrong place quickly. That has a lot to do with discipline. Your discipline can shrink. You may enjoy food and start to eat at the finest places. You can afford it and you can have whatever you want. You can have as much as you want. You look up one day and you’re 50 pounds overweight.
That’s one that I struggle with. I can afford all this and I want all this, but I shouldn’t do all this. That’s how the kings used to end up with gout. It’s because they had so much of the finest stuff and they sat idle in between meals that they started having gout and having health issues because there was too much of a good life. Not to mention smoking, alcohol, or propensity for certain drugs. Those also can get out of hand and falls in the vices and the discipline section. Be careful when you start to come into your own to take heed. Don’t let yourself slip too far because it can certainly happen. If you’re not paying attention, you can look up and it’s a long road to try to lose 50 pounds.
There are other little things. They’re not big issues. They’re blessings. There are charities. Once you give to charity, they’re going to call you every year. The charities that haven’t called you will start calling you because maybe you hit some list that you have given to charities. I don’t know where that list is, but there seems to be one. When you give them something and it’s tied to your name, everyone in the world seems to get your name and now everyone’s asking you. Even if you give privately and they know your name, they’re going to come back every year. Maybe it’s best to give anonymously and not put your name to it. Maybe that’s how we should do charity, anonymously.
Also, be careful of a growing overhead. Just like your weight could creep up on you because you can afford all these different lavish foods, restaurants and drinks, your overhead can creep up and up as well. I am constantly looking for when I increase my overhead in one area. I liked to call a meeting of everybody at least twice a year and go, “I want everyone to review everything I’m paying for monthly. I need to figure out what I can cut out or live without or what do I not need anymore.” When I increase my overhead $500 a month, I’d like to find someplace to cut it. Surprisingly enough, a lot of times the things that I have bought into to increase my overhead a year ago are no longer relevant. I don’t care about them as much anymore or I can live without them.
When I get into something else that’s a $500 increase in my overhead, then I call that meeting. They go back and look at all my expenses. They go, “What about this?” I’m like, “I don’t need that one right there. How much is that one?” “It’s $487 a month.” “I don’t need that anymore. Cut that out. That’s great savings right there. I won’t even miss that. I don’t even know why I signed up for that. I didn’t use it for about a week.” It’s like that gym membership. If you haven’t gone to the gym in six months, cancel it and go back when you want to. If you want to go back to the gym, I’m sure they’ll let you re-apply.Be careful with your body when you start to come into your own wealth. Click To Tweet
A little helpful hint, I like to call it pent-up demand. If been without anything or if you’ve lived frugally your whole life and then you start to come into money or you win the lottery or you inherit a large sum of money. I’ve heard this from a lot of financial planners. When that happens to someone, let’s say it’s $1 million. They take 10% of it or $100,000 and they give it to the family member or the family and say, “Here’s $100,000. We want you to have a good time. Take 10% of this money and blow it. Buy a jet ski, go on vacation, go Paris sale, get your pilots, do whatever you want to do. Blow $100,000 and get it out of your system because after this $100,000 is gone, we’re going to have to live within the income of this $900,000. Let’s get this pent-up demand out of the way. Let’s blow some money and do some stuff that you never dreamed of. Charter a private jet and take your extended family to Cancun for the week on a private jet. Do all that kind of stuff and get it out of your system.”
Get it to where, “I’ve done that. I don’t need to do it again. It was great but they cost an extremely ridiculous amount of money. I’m satisfied that I did it. My heart and belly are full, everything’s full and I’m good. Now it’s time to start living within this budget.” You lived your whole life without that $900,000 that you’re using to produce income. Take whatever it is that it makes and learn to live off of that. You didn’t have that $900,000 for your entire life until that day. Why would you have to blow the $900,000? Why don’t you increase your lifestyle by the amount of income that that $900,000 can make you and not increase it so much that you’re biting into the principal of that $900,000?
That’s my dissertation for the day. I hope maybe I struck a chord with some people out there. Maybe this is all ridiculous. It’s just my opinion and my point of view. There are probably lots of other things to add to this or to subtract from it. I wanted to give you a chance to contemplate. If you’re on your way to being wealthy or if you’re already wealthy, I want you to stop and think about a few things a little bit. I hope it helps. Thank you for stopping by. I appreciate each and every one of you. If you want to help me, please give me a five-star review on iTunes. You can go to Amazon and give my books a five-star review because let’s face it, Mitch Stephen is not famous. A handful of people in the world know who I am and that’s it. The only reason anyone signs up for my podcast or reads my books is because of five-star reviews from people like you. I can’t tell you how much I appreciate it and how much they mean to me. Thank you so much. We’re out of here.
About Mitch Stephen
Mitch Stephen has been a self-employed RE investor for 25+ years. His real estate investing career started at the age of 23 when he read “Nothing Down” by Robert Allen.
Mitch Stephen has purchased well over 2,000 houses in and around his hometown of San Antonio, TX. A high school graduate, who never stopped learning. Books, CDs, seminars and webinars were his classroom.
Today he specializes in owner financing properties to individuals left behind by traditional lending institutions and giving new life to properties that scar the neighborhoods.
He has perfected a method of achieving cash-flow without having to be a landlord and without having to rehab properties. He’s mastered the art of raising private money and the classic “Nothing Down” deal.
He has pioneered the idea that you don’t have to give discounts to sell your notes.
A passionate speaker who delivers the message of integrity first and profits second; an expert at keeping it simple and explaining, in plain English, the theories that made him financially independent. He is always an inspiration to those around him.