Where is all the money going?
At one point in time we have all asked ourselves “but where is all the money going?”, “how is it possible that all of it is gone?”. It doesn’t matter how much or little you earn. What matters is having control. Controlling your finances is the key to financial success.
You might think that rich and famous athletes and celebrities earning massive pay checks have little to worry about their finances but in reality several of them have made the headlines for their financial disasters. Living a luxurious lifestyle, if not under control, can easily lead to financial disaster and bankruptcy. Here are two examples:
Former American football running back Travis Henry who played for the Bills, the Titans and the Broncos fathered 11 children from 10 different women. He faced problems meeting the child support obligations to the mothers of 9 of his children and was even jailed to have failed to pay $16,600 in child support. He has to pay an estimated $170,000 per year in child support.
He was also sentenced to 3 years in federal prison in 2009 for financing drug trafficking.
Just for the 2007 fiscal year, Mr. Cage was charged by the IRS for not having paid more than $6 million in taxes. If we combine the amount of unpaid taxes with the extravagant lifestyle and spending, there goes his fortune of over $100 million. At the peak of his career, we was earning as much as $40 million per year. But just as his income increased, so did his spending (beyond his means). An $8 million castle in England (several more were spent to remodel it), a $17.5 million palace in Bel Air, and a $10 million beach house in Malibu just to mention a few of his real estate expenses. He also enjoyed luxury cars (Lamborghini, Ferrari, Rolls Royce…) and yachts (one of them was valued at $20 million). And of course he had his own private jet ($30 million). Not to mention all the money spent in jewellery and art. He also purchased a 67 million year old a dinosaur skull!
Developing a personal financial plan
Spending money is surely easier that saving it. You can spend money without thinking about it but when it comes to saving money, you cannot do it without thinking about it. It must be accurately planned and in order for a plan to be effective control is required. It is not as fun as spending money but if followed closely it will keep you out of trouble and will help you meet your goals. Are you ready to develop your plan? Get started now: Developing a personal financial plan.