Why Get-Rich-Schemes Are Only Good for Daydreams
The gold rush may no longer be a popular promise to “strike it rich,” but that doesn’t mean movies, blogs, and social media aren’t still feeding us stories that becoming wealthy overnight is possible. But dreamer beware: the lure of fast, easy money will almost always lead down a path of risky, unwise decisions and almost never pays out.
Why exactly are the odds against this kind of financial windfall? Read on to find out.
What you put in is what you get out. It’s a rule that applies to most of life: the more effort you put in, the better, more long-lasting, and more likely the results. Of course it would be nice to wake up one day and have perfect muscles and a bank account with more than six, seven, or eight figures in it, but it’s not likely to happen unless you put in the hours (at the gym and on your investments). There is a finite amount of money that comes fast and easy (think of winning the lotto or winning a bet), but if you pursue wealth while developing patience, knowledge, perseverance, and self-control, you’re more likely to not only sustain that wealth, but continue to grow it over time.
Easy come, easy go. This is really a continuation of the first reason why instant wealth is best saved for TV show drama and not a part of your financial planning. The National Endowment for Financial Education estimates that 70% of people who win the lottery or other large sum of money will lose it all—and sometimes more—within a few years. A third of winners will file bankruptcy. A large reason for this is because when we receive something without working and sacrificing for it, we’re less likely to value it as much or to guard it. Instead, we spend or give it away too easily because we don’t connect spending to the effort it took to earn the money and how long it will take to earn it back. If you aren’t used to tracking and managing large sums of money, it’s easier to lose it.
You know what they say about a fool and their money. They’re easily parted. Get-rich-quick schemes and cons play on people’s desires for lopsided outcomes: big rewards for little investment or effort. If you think that a sneaky loophole in commerce or super-secret marketing business venture (ahem, Ponzi scheme) is the best way to earn quick cash, you’re setting yourself up as a target for fraudsters. If you’re looking for an easy buck, you can bet others are too, except they might not have any scruples about how they get your money from you.
When it comes to investment and businesses pitches from strangers, friends, and family, the first step to wise decision making is admitting you’re not a business or financial expert. If you don’t understand a brand-spanking new business venture, or things aren’t adding up in the pitch, don’t let the promise of quick cash lead you away from caution. It should cost you nothing to pass a legitimate investment opportunity by a financial advisor.
It takes both wisdom and time to build wealth. A week of monsoons won’t grow a field of crops faster. Nor will it help that same field produce crops next year, or the year after that. Slow and steady watering over time, with an educated plan for irrigation despite what the weather does, keeps a farmer fed and in business. The same can be said about growing wealth: it takes hard-earned wisdom and time, and it means learning what to do through the highs and lows of the economy and money management. If you don’t learn those lessons over time and with smaller amounts of money, you’re more likely to make a fatal decision with a large sum.
Wealth is not an end point that stops requiring work. A windfall of money, believe it or not, would not be the cure-all for life that many people imagine it would be. Life—and its challenges—goes on, and in order to live a life where a lack of funds is no longer a daily burden, the amount of money needed to live comfortably needs to go on, too. And that takes continual planning and work. Even if it’s not a 9-to-5 job, wisely managing money to sustain a lifestyle does take dedication as well as the ability to feel satisfied.
Instead of thinking of wealth as an end point in time, we need to think of it as a life of contentment and a long-term plan that won’t burn out. Money comes and goes—you’ll earn it and you’ll spend it. But leading a rich life also means learning what makes you happy and content and learning how to manage what you have.Go to main navigation