Why Do People Go Broke After Making So Much Money???

Correct me If I’m wrong! But I think most wealthy people have financial anxiety, which is the fear of having no money.

Image Source

I once asked my wealthy friend about his greatest fear and his response was “the fear of being broke”.

And that is why you see some of these rich guys working round the clock to maintain their wealthy status.

But wait…

Does working hard prevent you from being broke?

If yes, why did Mike Tyson go bankrupt at some point after earning half a billion dollars in his sports career???

Why did Audbrey McClendon move sharply from a networth of $1.2 billion to about zero dollars before he died in 2016?

Why was Alec Wildenstein’s ex -wife - Jocelyn Wildenstein declared bankrupt in 2018 despite her $2.5 billion divorce settlement?

So, working hard is never a guarantee that you won’t be broke.

These people I mentioned earlier were wealthy but didn’t know how to manage their wealth.

Everybody these days focuses on how to make money. But nobody cares about how to manage this wealth when it finally comes.

For instance, Mike Tyson went bankrupt not because he wasn’t working hard.

But he was carried away by the figures. And didn’t do anything to plan for the future.

Rather, he squandered his wealth away.

If you aspire to become a billionaire and achieve generational wealth, you need to hone your financial management skills.

You need to learn how to make your money work for you.

You need to learn how to invest in the right business and how to identify the perfect investment opportunities.

You can never become a millionaire if you spend more money buying liabilities rather than assets.

According to Robert Kiyosaki in his best selling book Rich Dad, Poor Dad, “True asset is something that puts money into your pocket. And true liability is something that removes money from your pocket.”

To be financially successful, you must always spend your money on assets. Resist every urge to spend on liabilities.

So, people go broke after making so much money because they don’t invest in assets. Everything they buy takes money from them.

They buy expensive cars, expensive mansions, go to expensive clubs, you name it. And before you know it, millions of dollars will disappear without explanation.

Anybody who maintained billionaire status for a long time applies this simple financial management logic.

They invest more on assets; you hardly see them spend money on something that won’t generate returns except it’s unavoidable.

That is the mindset of a true billionaire.

Warren Buffet for instance, has been a billionaire before I was even born. He has been in the billionaire circle since 1986.

And up till this moment, he’s among the top 10 richest people in the world.

How did he achieve this feat again?

It’s simple, he invests more in assets than liabilities.

Conclusion

As you work tirelessly to become wealthy, always remember the real equation of wealth. That is only spend money on things that give you more money.

With this mindset, you will surely become among the top 1% of the society that controls the world’s wealth.

Thank you for reading.

What is preventing you from achieving your financial goals? Kindly share thoughts in the comment below.

Reference 1

Reference 2

Posted Using LeoFinance ^Beta