I have heard successful entrepreneurs speak about this and it changed my life. I became more patient and I stopped chasing quick money. It changed my entire outlook on money and life, as well as the dangers of financial ignorance, and enjoying the journey along the way.
I don’t want to win the lottery.
I have had this discussion with many people and have spent a lot of time thinking about the possibilities. Yet, despite the arguments on both sides, I would still rather earn $5 million in my life than win/find/receive $100 million via a handout.
I am not a millionaire yet, but so long as I am blessed to have good health and live past 50, I am certain that I can pocket a minimum of $5 million in my lifetime. That’s enough money to live comfortably and to have the freedom to do a lot. Plus, I don’t need expensive things to show off. My overarching goal for everything I do is to provide a foundation to the future generations of my family and for society as a whole.
The main reason I don’t want to win the lottery is because of what comes from it. Thomas Tusser once said, “A fool and his money are soon parted.” And the word fool is not used as a derogatory remark, but to represent a person lacking financial literacy.
If you can’t manage and grow one hundred dollars, then you probably won’t be able to manage and grow one million dollars. You don’t suddenly learn how to deal with money by having more of it. Wealth is a side effect of financial literacy and not the other way around.
When I was thirteen, I could imagine myself winning the lottery. I would buy a couple of nice cars, a house, I would buy my family some nice things, then donate the rest to charity and I’ll still be set for life right?
Thirteen-year-old me didn’t even know about taxes or compound interest. He didn’t have a mentor or any connections to people he could trust to grow his wealth with. Even present-day me doesn’t know half the things that forty-year-old me will know and I’m yet to meet many more valuable teachers and business partners.
I feel like people put too much emphasis on money and not enough value on foundational tools. On the road to wealth, money is the car and the fuel is your skills, knowledge, and connections. With money, you can buy a high-performance reliable car that looks and feels amazing, but if you don’t fuel your car it won’t go far. After all, wealth is a marathon and not a sprint.
In the situation where the entire economy resets and all assets are redistributed to $10,000 per person, it won’t take long for someone like Elon Musk or Bill Gates to amass a substantial net worth. This is simply because they have proven skills, they’re knowledgable and are well connected, and have people who trust them.
Even if Elon Musk was the only person to have his wealth reset, I’m pretty confident that investors will be throwing money at any new project he proposes. His business friends would love to partner with him in new ventures and opportunities. Worst case, he’ll be hired by a Fortune 500 company with a top-tier salary. I’m using Elon as an extreme example, but this relates to anyone who holds intangible wealth.
History demonstrates that people who accumulate money too quickly often struggle to maintain that wealth long-term. It’s why family dynasties last for generations, while 70 percent of people who win a lottery or receive a large windfall go bankrupt within a few years.
Family dynasties don’t survive because of money. Their actual wealth lies in their last name. That alone presents a good reputation which leads to connections and opportunities. Even money-making skills and knowledge are ceded to their descendants. Dynasties usually fail when the incumbents lose sight of the long-term. They become too reliant on the tool of money which causes a chain reaction until their business implodes.
When a person suddenly gains a lot of money, it’s common for them to buy expensive things that they’ve only seen on social media. It’s normal to experience these things that were deemed exclusive and unreachable to the average mortal. But then some of those people realize that while the experience was fun, it just isn’t practical and many luxuries aren’t what makes them happy. So they use their money tool to pursue their passions whether it’s philanthropy, climate change, or making humans multi-planetary.
It can be an eternal black hole trying to keep up with the Joneses. When someone increases their income and upgrades their lifestyle by going on more vacations and upgrading their house, it’s amazing at first, but then they adapt to that new lifestyle.
Hedonic adaptation is a phenomenon where humans naturally adapt to an upgraded lifestyle and it essentially becomes their new normal. So it would take another upgrade to get that rush of pleasure and then they adapt to that new upgrade. This never-ending pursuit is common with people who seek money for the wrong reasons or accumulate money too quickly without also building a solid foundation of skills, knowledge, and connections.
An interesting statistic sums up the cost of financial ignorance that comes with gaining money too quickly; 78% of NFL players reportedly go bankrupt or are severely stressed financially within two years after retirement, and about 60% of NBA players are broke within five years of retirement. These are people who make on average 80x more than the median income in the United States. Yet they end up worse mentally, socially, and economically than they were before their career. If you know about loss aversion, it’s human nature to be in a worse place after losing a million dollars than to not ever even have a million dollars to lose.
Some people manage to obtain financial literacy and the tools of the trade only after reaching wealthy status. These people were lucky to be surrounded by honest people from the get-go who help them manage their money—which can be rare.
However, oftentimes acquiring money before financial literacy causes someone to lie prey to manipulation and scams within business deals. Since they are financially illiterate, they can’t tell the difference between a smart business move from a shady one. In many cases, knowledge is power and leverage.
Jackie Chan has publicly announced that he plans to leave his $370 million net worth for charity when he dies instead of giving it to his son. He said: “If he’s capable, he can make his own money. If he’s not, then he’ll just be wasting mine.” Jackie Chan understands the value of a dollar. Someone who is born into money or inherits money too quickly may not value the hard work that goes into earning money. This can sometimes even lead to a life of little value; just buying and consuming things rather than producing for society and feeling a sense of purpose.
I agree with Jackie Chan’s decision because even if his son doesn’t become wealthy, he lives a fulfilling life of value and purpose. And after all, he was left with something a lot more valuable than money—the skills, knowledge, and connections to build his own wealth. While money can be stolen or lost, what’s in his head can never be stolen from him and will last perpetually.
A persons’ financial wealth should grow congruently to their intangible wealth tools to be sustainable.Chris Crubaugh
As a result of this mindset, I never feel tempted to steal or participate in quick money schemes. I value wealth-building foundations more than I value money itself. I believe that it’s a dangerous gift to receive a large sum of money too quickly. It’s also arguably not as fun, not as fulfilling, and certainly not sustainable. So, in the meantime enjoy the journey and the struggle.
I’ll sign this off with a quote from Gary Vee;
“What makes this [entrepreneurship] easy for me is that I genuinely enjoy the process more than the things the process can get me. I love putting in the work. I love the grind. I always value the victory over the fruits of the victory. It’s a great mindset to have and if you can shift your perspective that way, it will help you stay motivated too.”