Wealth: and the problems….
Earning money is far far easier than managing the money. Many inheritors have ruined the inheritance. The Birla clan in various portions has destroyed wealth, have they not?
There are just too many examples – here are 2 from the USA…Evelyn Adams won the New Jersey lottery not once but twice, in 1985 and 1986. All $5.4 million of winnings has since evaporated – mostly into Atlantic City slot machines. Relegated to living in a trailer in a trailer park, Adams said, “I wish I had the chance to do it all over again. I’d be much smarter about it now.”
William “Bud” Post won $16.2 million in the Pennsylvania lottery. He invested in a car and restaurant business. Within a year he found himself $1 million in debt and went on to declare bankruptcy. To make matters worse, his brother was arrested for hiring a hit man to assassinate him so he could claim the winnings for himself. “Bud” now lives on Social Security saying, “I wish it had never happened. It was a total nightmare.”
So all that talk about ‘I wish I had inherited a 2 million $ home or ..whatever..makes no sense unless YOU know how to manage the money. Alternatively knowing that YOU do not KNOW is very important, so that you do not squander it away like our two aforesaid heroes.
vincent
Jack Whittaker won a lottery of $314 million (annuity) in Dec 2002, he opted for upfront cash & was paid $113 million post tax. His net worth before this mega prize was $17 million (wikipedia). By 2009 he not only lost the money, but also his daughter & grand daughter. Washington post has a good story on him titled “Rich man, Poor man”.
VK
I am reminded of the book – the richest man in babylon – where this very principle is discussed in quite some details…it emphasizes really well on the wisdom involved in both protecting and growing the wealth earned/acquired.
Srinivas
Interesting and to the point.
Government, though will not support you when you are/become poor, will be ready with taxes etc to get its cut from the pie one has. This is specifically so here.
One has to start learning things for himself gradually along with growing his corpus gradually, to manage it once a decent amount is accumulated.
DD
Sir, Please clearify one doubt, If I invest in Lumpsum in any good Mutual Fund, say Rs 100,000 in equity or debt fund, for 5 years, will charges of 2% (fund management charge) be applied every year.? or just once at the time of the Lumpsum investment?