Money is a Magnifier

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Seventy percent of the individuals who win a lottery or get a big windfall end up broke in a few years, according to the National Endowment for Financial Education.

In 2012, the financial advisors of the former NBA champion Dennis Rodman reported that he was broke. Years of extravagances, wild spending was the reason given.

Courtney Love, wife of Nirvana’s Kurt Cobain, squandered over $27 million of Nirvana earnings on years of hard partying and wild spending.

Famed actor, Nicolas Cage, who made $150 million in his acting career, at one time owned a haunted mansion, a private island, a collection of shrunken heads and spent $276,000 on a skull of a Tyrannosaurus Rex. His reckless, excessive spending forced him into bankruptcy in 2009.

Money acts as a magnifier. It exacerbates your Poor Habits.

If you have the Poor Habit of partying too much, you will find novel, expensive ways to party if you suddenly come into money. Consider Conor McGregor. One week after receiving $30 million in winnings from his very lucrative loss to Floyd Mayweather, McGregor bought a super yacht reportedly worth $12 million.

If you have the Poor Habit of gambling, the more money you make, the more you will gamble. Consider Allen Iverson’s fall from grace. He earned over $200 million dollars in his NBA career and due to his gambling and drinking issues, Iverson is now both broke and in debt.

If you have the Poor Habit of saying yes to everything, you will give away all of your newfound money to friends and family. Consider Gerald Muswagon, of Winnipeg, Manitoba, who won $10 million in 1998. He bought cars for friends and family, and gave away much of his money. Eventually, he’d spent all his money and had to find a minimum-wage job to survive.

So many people who suddenly come into money find their lives worse then before primarily because money is a magnifier with respect to your habits.

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Thomas C. Corley About Thomas C. Corley

Tom Corley is a bestselling author, speaker, and media contributor for Business Insider, CNBC and a few other national media outlets.

His Rich Habits research has been read, viewed or heard by over 50 million people in 25 countries around the world.

Besides being an author, Tom is also a CPA, CFP, and hold a master’s degree in taxation. As president of Cerefice and Company, CPAs, Tom heads one of the premier financial firms in New Jersey.
 
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