People always talk about what their income is and how much their net worth it. But how important is this? Yes, having a nice saving makes things easy, however it is not necessary that you parked a lot of money on the side.
When you have a certain plan and you stick to it you can outperform anyone’s current net worth. Think about someone who just won a lottery and received 2 million. They receive it on their bank account, so from that moment forward you could assume that they will no longer have any money problems and can do whatever they want? Wrong. Yes they could almost literally buy anything they want, that is exactly where the problem lies. They buy themselve a really expensive car, they buy a villa, when going out with friends they spend tons and tons which in turn will have there friends lean on them completely. (even if it’s just the huge parties they start having) The only thing it causes is the money to be rapidly depleting.
A man with money is no match against a man on a mission. – Doyle Brunson
If you compare the lottery example with someone else winning only 50k, it could completely change their world for the better. It is not the amount that changes everything (except for a short amount of time), it is what you do with it. If the money is used for saving, investing, buying a first reasonable place to live you will see the benefit from it. When it seems to be a huge amount of money you will spend it on anything you desire and even the things you never knew you would buy. Instead if you only go ahead and sell your 15 year car and buy a 8 year car with a bit of it and then continue as you were living before the money will have huge benefits for your future.
Not the amount of money but the plan that you set yourself on will determine how long it will last. Only using a small amount and being smart with the rest can be really difficult. But it will allow you to have a nice saving if anything would happen in the future. The money can be used to pay-off a part of your mortgage, it can count towards a new mortgage, invest a part of it, cover medical bills of you or your family now or in the future. This method of not instantly splurging the money is called “Delayed gratification”. Instead of looking for the quick pleasure you look ahead and make sure that you will enjoy the safety from it for many years to come. It will make the difference if something bad happens to you and or your family.