Category — Millionaires

We usually associate those that are are rich to be smart, but there is more than enough real stories that point to the opposite. In fact, if I have to call a spade a spade, quite a few are financially “stupid”.

Let’s see some examples. First off, there is the King of Pop, Michael Jackson. MJ earned millions of dollars and the adoration of fans in his heydays. But his empire slowly collapsed in 2003 and Neverland was in danger of foreclosure in 2008. Many items MJ accumulated went to the auction to pay debts. On a documentary, the spent $6 million in just a few hours.

There are many other rich and famous who got in trouble because they failed to remember the basic money rule of spending less than what you earn. Among them Elton John, who was reported to running up debts of more than $2 million a month and Burt Reynolds filed for bankruptcy in 1996 with more than $8 million in debt.

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Have you ever looked with a tinge of envy, when your neighbor drive up to his driveway in a new BMW or some other expensive car? This neighbor seem to have it made. Nice car, nice clothes, nice wife and just about everything makes you believe that they have made it. Then you begin to imagine and wonder, if you could afford a nicer car than the one you are driving now. I know, I have on occasion. But don’t let this image fool you. Yes, there are those who are really rich and make a show of their wealth.

Let me tell you a true story of two fellows. I’ll call them Mike and Bob. By the way, these are not their real names. Mike and Bob have financial habits that are miles apart. Mike is the guy you think is rich on first glance. Looking at the clothes he wears, the car he drives and the places he frequents, screams “rich”.

On the other hand, Bob is a simple guy. He dresses simply, eat and lives simply. On the first look, you’d never give him a second glance because everything about Bob says “middle class”. After knowing them a little longer, wealth wise, Mike and Bob are totally opposite.

While Mike flaunts his so called wealth, Mike have debts up to his eye balls. At anytime, his image can just crumble. Bob on the other hand, could survive just about any financial disaster since Bob don’t have any debts to speak off. Meeting Bob the first time, I’d guess he was low profile and have a bit of cash.

Did Mike or Bob get to where they are financially overnight? Surely not. While Mike has been accumulating debt, Bob has been accumulating assets. Mike choose to live a lifestyle to please friends and perhaps his ego, and Bob choose a simple life, to not have too much “stuff” and spends his money on things that grows in value like land and property.

Next time you see a person in a nice car, don’t look on with envy. You can never tell if that person is a millionaire or a pauper?