How do you deal with being wealthy or suddenly having lots of money?

Discussion in 'Psychology' started by sub0, Oct 25, 2009.

  1. sub0


    I know just like the culture shock of being poor or losing lots of money, how do you deal with being wealthy or suddenly having lots of money? How has it effected you as a person?

    I bring this up because I've read of all the traders here who mention trading has changed their life, they are independent, free and have found their way. Before that though they lived a certain lifestyle and now they live a new one. How do you deal with the change?

    Like for example Neke who traded his account up from around $5k-10k to around $325k to now $700k and is shooting for $3.5 million. Sitting with a trading account at around $700k has to have a significant impact on you if you are coming from days when you had $5k-$10k.

    I'm just wondering how some of you guys have dealt with the success, possibly even fast success? I would think it must feel unreal in many ways.
  2. sub0


    I also bring this up because a lot of traders get into it with the idea of becoming very wealthy or financially well off. But what happens when it actually does happen, when you suddenly have $100k, $500k, a million+? Are you ready to deal with it?
  3. bone

    bone ET Sponsor

    Once you pay your estimated quarterly taxes, you will not feel that wealthy. You will realize that you are working for the government as much as you are working for yourself - and I mean that literally. It is very, very difficult to feel wealthy when the government takes 50% of the upside and none of the downside.
  4. The advantage of becoming rich trough trading is you must have some kind of understanding of money and an idea on how to safeguard your capital once you have obtained it.

    Say you inherit 1 million USD and don't even understand the difference between a stock and a bond you are at the mercy of bloodsucking 'advisors' and chances are pretty high you get royally screwed wishing for the times when you were poor but happy to come back once more.
  5. Well unfortunately if you look at the stats on those who have won the lottery, a number of them end up miserable and broke within a few years.

    It all about your value system. I am generally frugal with some exceptions. If I won or made $1 million in 1 year I won't buy a Ferrari. It's just not me. Mercedes maybe. :p The value money brings to me is financial security not the lifestyle it can bring.
  6. For the people that reach that kind of wealth in trading I would say that it just becomes numbers to them and they really dont change their lifestyle much. Its the thrill of the game that keeps them coming into the office.
  7. The strangest thing i found.

    I regularly lose and make 10K in one day as a trader.

    But when i go to buy something in the shops i think hard about spending a few bucks on something.

    I still think about the postive expecation of spending very small amounts of money.
  8. There is a Chinese Proverb: "It takes a man two weeks to get used to wealth and a lifetime to get used to poverty if he loses his wealth"

    I friend of a friend inherited $30 million and then worked very hard for years to make more before it was all gone...

    I'm not wealthy but I've had years to think about it.. it can buy you an upgrade to whatever now makes you happy, a single upgrade, not that big of a deal... it can also bring on strife with jealous people and other problems but that's not all that hard to deal with.. hiding your wealth or bringing your friends along are two option... if you have a great system going, set up retirements for your friends, fund it yourself, remove your funds from the profits after awhile and everybody is happy...
  9. Topper


    I have to side with you here Fractal on the last thing you wrote. I too am a very generous person when I am loaded, with my friends and family, and some people.

    My 'story' is that I made a ton of money in the late 90s and used it to finance my dream of building a rehearsal hall for bands and musicians so that they would have a secure place to practice, 24/7/365. In fact, I started in a 6200 sq ft facility off of 8 mile in Detroit, which to my surprise, filled up fast with the original 18 rooms I built myself, which were rented on a month to month basis, with security deposits. After 2 years I had my choice to purchase the entire building (which was 12,400 sq ft) on land contract, or, lease an 18,500 sq ft building smack dab on 8 mile perfectly positioned between two of the most popular topless bars on the east side of Detroit! Unfortunately, I chose the big place which actually had videos for mtv shot in it and had several big name musicians rent from me. Guys, it was party city and all I had to do was go to the mail box and collect the checks, not to mention, backstage passes and other fringe benefits.

    The whole thing was a dream until I took on a partner, who was about greed, whereas I was about giving. from that point on it was all downhill for me.

    What 'I' can tell you about me and money is that I constantly used it to build and expand so that I could 'help' the local musicians of Detroit.

    So, here I am trading again, driving a Jeep, and living with one of the Great Lakes in my backyard! :cool:

    My future plans are that when I succeed once again with my trading, my plan with the rest of my life is so big, creative and original, that you guys will most likely know my name one day, and I can tell you this, it's going to help hundreds if not thousands of people through generations to come.

    That's a promise
  10. I will build a hospital for my kid, who wants to be a doctor, to manage, if I have the money:D
    #10     Oct 25, 2009