Who knew that when The Notorious B.I.G. infamously said, “More money, more problems,” he was offering sincere and sound financial advice?
Too many Americans just dream about being rich without doing what is necessary to achieve such status. And there are statistics to prove it.
In 2020, the average American believed that you needed at least $2.6 million to be considered rich. Post-pandemic, Americans in 2021 now say you need at least $1.9 million to be considered rich.
Meanwhile, the typical American only makes $48,700 annually. That is the equivalent of a $936 weekly paycheck.
When economic hard times hit, working-class Americans shift their ideas of what it takes to be rich.
Wealth is a financial mindset. And money is a tool one uses to make life more comfortable, not the endgame itself.
If there is a goal to being wealthy, it’s financial independence. Or making money and keeping as much of your money for as long as possible, and even turning it into generational wealth.
It’s fine to dream about being a millionaire. But if you want to be a millionaire, you have to do more than just dream about it.
But when you become a millionaire, you may find that unless you are financially literate and business smart, being wealthy can be a nightmare.
The Wealthy are More Likely to be Sued
One day you may become a millionaire. Just make sure you have a good law firm on retainer.
Millionaires are more likely to be sued just for being wealthy. It costs money to hire a lawyer, and the costs are worth it to people if they think they can win.
A 2012 survey in Insurance Journal found that 40% of wealthy people feared being sued after an economic downturn. 80% of respondents said that just being wealthy made them targets for frivolous lawsuits.
One respondent, a wealthy man, reported that he got into a minor car accident. Both drivers agreed not to call the police and just part ways. Then, the wealthy man had a relative pick him up in a luxury car at the accident scene.
The other driver immediately complained of bodily pain and sued the wealthy man. And that wealthy individual lost the lawsuit and had to pay the other driver a substantial sum.
Fairweather Friends
Once you become a millionaire, everyone you have ever known could swarm you begging for financial help or loans.
Complete strangers may begin pretending to be your best friend. People you may have known in passing years or decades ago may begin calling you up.
Indulging fairweather friends and lavishing gifts upon family members after becoming rich can accelerate you towards bankruptcy.
The average lottery winner, or anyone who gains sudden wealth, loses every penny within three to five years.
You Won’t Know Who to Trust
Wealthy people are always inundated by business plan offers, deals, and investment opportunities.
You will never know who earnestly wants to do business or who might be pulling a scam.
Higher Taxes or Higher Lawyer Fees
You may have heard that massive corporations like Facebook and Amazon don’t pay any taxes. That may be true, but they are definitely paying their law firms a lot for that privilege.
Once you become a millionaire, you will definitely start paying more in taxes. And the only way to prevent that is to start paying a law firm a lot of money.
Wealth is a Mindset
Want to become a millionaire?
Get out of debt
Save every penny.
Live below your means.
Make shrewd investments. Start a business with a good plan based on your skills and local market advantage.
Wealth is a mindset. Money is a tool, so you have more options in life, not the endgame.
You must develop a thick skin, ration trust, and be financially literate about your money to become a millionaire and stay one.
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Allen Francis was an academic advisor, librarian, and college adjunct for many years with no money, no financial literacy, and no responsibility when he had money. To him, the phrase “personal finance,” contains the power that anyone has to grow their own wealth. Allen is an advocate of best personal financial practices including focusing on your needs instead of your wants, asking for help when you need it, saving and investing in your own small business.