The problem of speed on making money

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It is a dream of many people to be rich for the rest of their lives but only a few can sustain their wealth for a long time. Anyone can make money but not all people can remain wealthy. In the community I was raised there is a saying – money is a stranger who comes and goes. This statement is only validated by the fact that most people are financially illiterate. The problem of speed on making money is poor management.

We have examples of athletes who filed for bankruptcy after retiring. There are also very few gamblers who can sustain their money. Majority of people will end up squandering all their money.

Many people who are falling victim to such difficult circumstances end up depressed. When you lose your money, you also lose your status and many friends. The feeling of being a failure will condemn many to bitterness. Some people will lose their self-esteem because of rejection by friends and family members. If you can not sustain your wealth, it may actually be better to never taste it.

Why many people get broke after making money

Poor money management

Money has its rules that you need to know for you to sustain your wealth. In most cases, it takes time to develop a good habit of managing your money. Some of these habits are difficult to develop when you have a lot of money. For you to develop a habit of doing something, you need to keep on doing it consistently for a long period of time until it becomes part of who you are.

Furthermore, money should be seen as a plant that needs proper care to grow. We can all agree that a plant can not yield fruits in one day. The best way to sustain your money is through investing or starting a business. Again, you need to build a good habit of investing.

Therefore, if you get money instantly before you are fully equipped to manage your money wisely, you are likely to squander it. To try to cover for this problem, many will enter into debt and this is guaranteed to make the situation worse. Reliance on debt makes it very difficult to bounce back.

Never underestimate the skills you learn by investing little money. The money that grows slowly has a tendency of staying with you for a long time. It is just like adopting a child – the bond will be stronger if you raise him/her from infancy. Appreciate that little growth that you get when you invest few dollars.

Lifestyle changes

When a person has money, his needs and wants will grow in line with his money. This is one of the major problem of speed on making money. Have you ever noticed the way people spend money just after getting their salaries? Many people will go for parties and they will blow a large portion of their salary or wages in one day.

Furthermore, when people make money in a short time, they want to give a voice to their money. They recklessly spend their money to show off to people that they have money. They spend their money on flashy cars, houses and other liabilities that do not grow their income.

It is difficult to maintain a lavish lifestyle when the money is not growing faster than the expenditure. Therefore, if the money is not invested while expenditure is increasing, then bankruptcy is certain.

Poor budgeting

It is very easy to make a budget for a small amount of money but the reverse is true. If you receive a large sum of money without expecting it, you may be confused on what to do with it. Based on experience, if you are not used to have such kind of money, you may end up overspending it.

Do you know that the month that employees receive bonuses is the month that is very difficult to maintain a budget? The more the money, the more complex it becomes to track every transaction. The total of those small untraceable transactions can be a large portion of your income.

Fake friends and black tax

When you have money, you attract many friends. Majority of this pool of friends are only interested in what your money can offer and they will quickly vanish when you are broke. In actual fact, it is difficult to discern true love when you have lot of money. This is another problem of speed on making money. Getting your wealth at a slower and manageable rate can help you to make great friends who make you a better person.

Furthermore, there is a higher likelihood of filing for divorce few years after losing your wealth. Money has the power to buy fake love.

There is another problem which is most popular among African folks – black tax. Black tax is when a person carries the financial burden of everyone else in the family or society. Giving is very good and it is great to uplift your own people but only when it is necessary. As long as you are giving money without growing it, it may be difficult to escape the poverty cycle.

The best form of giving back to your relatives is by making them self-sustaining. How do you do that? Uplift them in such a way that their financial freedom will relieve you of their burdens. Teach a person to fish, tomorrow he will not need your charity.

Taxes

If you get rich, the government will take its share. The more you have, the more the tax you will pay. When you are still having little money, you can get tax exemptions from your investment income. As soon as you exceed a given threshold, tax will increase exponentially.

You also pay tax on almost everything you spend your money on. You are also charged for using your car – carbon tax. Therefore, the more you spend, the more tax you will pay.

In conclusion, there is nothing wrong with getting rich as long as you are good on managing money. The problem of speed on making money only comes if you lack financial discipline. Sometimes your emotions can force you to make bad financial decisions. The most ideal situation if you want to sustain your wealth is to grow your money slowly. As you do that, you will be learning a lot about the rules of wealth.

If you enjoy reading this post, you can also read our posts about investing with a low budget and also about investing before paying off debt.