The preceding words of flat-out, kick-ass wisdom are brought to you by Mary Hunt, Financial Author Extraordinaire and the Big Cheese behind Debt-Proof Living, whose article "Money Myths That Empty Your Wallet" I would like to photocopy and pass out to a whole lot of people I know.
If any readers caught the December 1 episode of Oprah, which covered what happens to your average Joe and Jane Sixpack when they hit a financial windfall, I'd like your comments. Personally, I found the discussion of Reversal of Fortune (a Showtime documentary that details what happened when a homeless man was given $100k) to be particularly prescient. At this point, I'd love to watch the documentary itself, rather than just see it encapsulated into a 15-minute daytime segment. Alas, I'm not a Showtime subscriber.
Suffice to say that the homeless gentleman turned out even worse off after the $100k than he was before he'd received it. For instance, he had no debt before the $100k came into his life — but he did have debt after it was gone. (I'd say that I'm sorry for ruining the movie for you, but you had to see that coming, right? The odds of a setup like that having a happy ending are ... uh ... miniscule.)
We're not all homeless, of course. Or alcoholics. And I'd like to think that a majority of us can manage to grab a shower more than once every two months. But I suspect there are some serious parallels to be drawn here between the homeless man and the rest of us. How he handled his money (and, I might add, who he blamed for his lack of failure with it) just isn't all that different from how many non-homeless people treat their finances in their own lives.
Everyone tends to think, at least at some point in life, that "more money" is the answer to his problems. But it never is. If you couldn't manage your money when you made $15k per year, you won't be able to manage it when you make $50k per year. It will leave your hands just as fast. When the dust clears, you'll probably be in even worse shape.
This "If I just had more money" myth has to be one of the easiest Money Traps to fall into, and it's a killer.
It's a lot like Joe Dominguez says about having it all:
Unless you act to make it otherwise, 'more money' is what you'll always need.