How Rich People Ruin their Financial Lives

Even rich people, with huge financial cash flow’s can ruin their lives and not have enough money left over for retirement, let alone avoiding bankruptcy. With large incomes the assumption is that the money will continue to flow forever. The reality is that they often overspend, change jobs or worse yet lose their jobs. There also can be a downturn in the market affecting their cash flow if they derive their income from investments. We put together a list of areas about how rich people ruin their financial lives that we all should pay attention to including those who make six figures incomes.

How Rich People Ruin their Financial Lives

These are a list of the things that most people should do, but often do not, regardless of the level of income that you make.

Establish a budget and track spending – to help understand where your money is going and how it is being spent. Add some control on how you spend money.

Plan for social security – when your income drops or stops all together.

Develop a long-term investment plan and budget – with goals and targets. Add in stress tests to help decide what action you should take.

Assuming the big income will last forever – is usually a mistake, nothing lasts forever.

Not developing a tax strategy – will help minimize the amount of taxes you pay leaving more for you to spend

Wasting money on too many toys and bad investments – leaves little for savings and retirement.

Not increasing savings as income grows – helps to maintain your standard of living when the income stops or you retire.