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.

Professional athlete also succumb to make silly financial decision perhaps thinking they can earn it all back. Don’t they realize an injury can wipe out everything. Mike Tyson earned more than $300m in his career, had pet tigers, a lifestyle that cost over $400,000 a month and finally filed for bankruptcy.

Lastly, we look at Larry Ellison, founder of Oracle and one of the world’s richest men. While Ellison have extravagant spending and made mistakes like borrowing against stocks he owned in Oracle, nevertheless, he listened to his accountant Paul Simon (eventually) to diversify his investment.

Borrowing from banks against your stocks is a bad idea because when stocks markets are down, banks will call in the loans. You might be forced to sell when prices are low. A double whammy.

To give you an idea on Larry’s rough budget here are some figures

1. Life Style – annual $20m
2. Interest Accrual – annual $75m
3. Villa in Japan – $25m
4. New Yacht $194m – (over 3 yrs)
5. America’s Cup – $80m – (over 3 yrs)
6. UAD – $ 12m (over 3 yrs)

So you are betting on a lottery ticket to solve you financial troubles? Think again. Evelyn Adams won the New Jersey lottery twice for a total of $5.4 million. Today, the money is gone and he lives in a trailer. Another winner, Suzanne Mullins won $4.2 million in the Virginia lottery in 1993. Today, she’s deeply in debt to a company that lent her money using the winnings as collateral.

There are a few lessons here.

1. Even billionaires need a budget
2. Rich don’t mean smart when it comes to growing money
3. Rich or not so rich, you need good advisors
4. It is not how much you make but how much you keep

via SFGate

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?

Well, not only has the idea paid for his education many times over, it made him a millionaire, generated quite a bit of publicity for him and made him famous. Who know what opportunity lies ahead for him now. The power of a simple idea, followed up with some savvy marketing and loads of hard work, shovelling pixels oops uploading pixels. You can read it at his blog section.

Lesson here, to quote Nike – Just Do It!

Related post : Not getting into debts.

Beside the most important point of being some one who did not inherit his money, I believe and think that no one ever made his millions all by himself or herself. Anyone who thinks it is possible must be superman himself.

Why? Think of all the people who help make it possible. You have the customers, the bankers, funding, your detractors, etc, etc, etc

In case you aspire to be a self made millionaire, consider this point first. There’s no such thing as a self made millionaire. The sooner we can accept this, the faster we can work with others to make our first million.

By the way, there are some who think that a million dollars being not like what it was in the past, a millionaire is some define as someone who have an income of a million dollars a year not networth!

• computers or automation will replace processes done by people
• if you computerize or automate that device have to run all the time or you have to fix it fast.

By the way, Fred Smith wrote a paper in Yale of his observation. Several years later as he saw his prediction coming true, the question he asked is “how do we solve this?’

And the rest, as they say is history. Not quite. If you read his whole story, there was still a whole network to build, funding etc.

The learning point here is:

• look around for problems. Fred Smith looked and saw a problem and the opportunity to solve that problem. Many new businesses and industry started that way
• is there an existing solution from another industry that can be adopted. Instead of coming out with a totally new idea, look around. Many solutions are already right in front.
• make it happen. It wasn’t easy to make your plans come to fruition. Stick with it. Fred Smith idea took years to finally evolve into what it is today.

Follow these few points and you could be the next millionaire. If you solve people’s problems and they will give you money for it. Solve a big problem and they will pay you lot’s and lot’s of money.

From the title of this post, you would have guessed that its about someone rather different. This eccentric farmer, entrepreneur and investor prefer to walk around barefoot and shirtless most of the time, even when he goes to the bank. Now before you think all Malaysians do that, we don’t. Even in the farming communities, we do dress for the occasion.

Foong Bang Loy, 53 earned his money through hard work. He is married with 4 grown children, owns the largest veggie farm in Serendah, several shop lots, a mini mart, a Merc and also a BMW. Guess that really cuts a different picture of how a millionaire would look like. Generally, most of us would think millionaires drive nice expensive cars, big house, Gucci shoes and the like. Not a barefooted person right.

This further reinforces my point that millionaires come in any shape, size or industry. It also goes to show that there could be many more millionaires around us. Just that they don’t fit the standard picture and we don’t notice them.

You might be interested to know, who are the World’s Top Ten Riches Men. Read about them here.