Ten things newly rich people can blow all their money on

Ten things newly rich people can blow all their money on

Ten things newly rich people can blow all their money on

When people become newly rich they tend to waste A LOT of their money.

Don’t believe me, lets take some examples off the top of our heads.

  • Mike Tyson
  • Michael Jackson
  • MC Hammer
  • 50 Cent
  • Nicholas Cage
  • Kim Basinger
  • Linsay Lohan
  • Pamela Anderson
  • Gary Busey
  • Chris Tucker
  • Wesley Snipes
  • Denis Rodman
  • Donald Trump
  • Mel B
  • Coolio
  • Jim Davidson
  • Johnny Depp
  • Whitney Houston
  • Paul Merson
  • Paul Gascoigne
  • Ronaldino
  • Shane Filan
  • Katie Price

This list is literally from about three minutes of me thinking of people who have spanked their fortunes away.

Hopefully, they will continue to earn more money and start to properly invest in their future.

Now, a lot of the above have issues with alcohol, drugs, gambling, rogue financial advisors and hanger on types but some people just like spending their money on the classic ‘Look at me, I am SUPERRICH’ props.

So, lets begin. Here are some of the ways newly rich people blow their money.

1- Classic ways – wine, women and song

A lot of people, especially men let money go to their heads

Wine

Wine

It is easy to get addicted to alcohol, cigarettes, drugs as they are so addictive. They make you feel good without you doing anything.

But they are a trap and you can spend a lot of money on them. Worse still, they can destroy your career.

Women

Women

Men in particular can get carried away chasing after women. They can spend a lot of money wining and dining.

But the big issue is if you cheat on your partner you lose the relationship and damage your finances through separation and divorce.

Song

Song

We can summarise ‘Song’ as just being out partying.

If you like staying out all night it might affect your work and your income.

Its important to have balance.

2- Real Estate

Real Estate

Real estate is an excellent opportunity to grow your wealth but just avoid buying mansions.

Mansions are expensive to buy, cost a lot in purchase tax, maintenance and repairs. And they are extremely hard to sell.

3- Cars

Cars

Economy and mid-range cars depreciate like hell.

Very high-end and one-off cars tend to hold their value and if rare or special enough grow in value.

But most newly rich people will not buy a classic car that may cost millions but hold and appreciate – they will buy the latest mid-top Ferrari or Porche that just will not hold its value.

We recommend leasing and charging back to your business (if you use it for your business).

4- Yachts

Yachts

Complete waste of money.

They depreciate in value and cost a fortune to maintain, moor, protect and insure.

Rent instead of buying, all day long.

5- Jets

Jets

Complete waste of money.

They depreciate in value and cost a fortune to maintain, store, protect and insure.

Rent instead of buying. Charge back to your business if used for work.

6- Helicopters

Helicopters

Complete waste of money (and dangerous, so many rich people die in helicopter accidents).

They depreciate in value and cost a fortune to maintain,store and insure.

Rent instead of buying. Charge back to your business if used for work.

7- Watches

Watches

Economy and mid-range watches depreciate like their counter-part cars, badly.

Very high-end and one-off watches tend to hold their value and if rare or special enough grow in value.

Every rich person has some bling watch that looks the same as every other watch.

Buy a watch that means something to you.

8- Jewellery

Like watches above.

This includes rings, bracelets, necklaces etc

Jewellery tends to lose its value once you purchase it – a lot of it is deemed ‘valuable’ but it is very hard to sell and liquify into cash.

9- Extraordinaire

Gold Domino Set

This includes memorabilia from famous movies or furniture and products made from unusual, rare or very expensive materials.

For example, the picture above shows a set of dominos made of gold and diamonds and it retails for about £150,000 pounds sterling. It is completely pointless and the only reason you would buy it is out of sheer ‘look how much money I have’.

A lot of these extraordinaire products are the sort cocaine induced drug-dealers buy – think of a chair made from AK47s or a giant painting of Al Pacino’s character from the movie Scarface.

Its mostly the new rich that will buy golden plated toilets and golden skulls. They are of little investment value and should be avoided. Mike Tyson famously bought a gold plated bathtub and Nicholas Cage, a stolen dinosaur egg – they are both now struggling financially.

Serious, long-term billionaires tend to spend big on islands, sports teams, artwork, legacy cars which they can enjoy for a few years and then sell on for a profit. But they will tend to avoid extraordinaire for the sake of shock or wow factor.  Billionaires will spend money on poor investments such as yachts and jets but some are so rich they just do not care. It is like a middle class family buying a sedan.

10 – Lifestyle

We love lifestyle, especially amazing experiences, holidays etc.

They are great because you know the upfront cost and you know they are not investments – you can decide how much you want to pay for the experience without worrying about ‘will this be a good investment’.

A good example would be renting a private island for a month, or closing down Disneyland for the day just for your family. These are not investments, they are just upfront purchases of an experience.

They are an immediate drain on your wealth. We recommend buying these experiences with your passive earnings not your principle (the money you sweat and work to make).

11- Artwork

Artwork can be a great investment but it is difficult to know what will appreciate over time.

Some billionaires spend vast fortunes on artwork and filling their personal art galleries.

These are not bad investments.

A newly rich person can get caught out though by overpaying for works that do not appreciate. A well known maxim when buying art is buy what you like to look at – at least you will have art that you like.  But buying art is extremely tricky so perhaps do not spend much of your budget on it.

With artwork, you must remember that you need to pay for insurance, storage, security and maintenance.

Conclusion

This wraps up ten things that newly rich can blow their money on. We actually covered eleven items so you lucked out!

We forgot to mention hangers-on. So many people spend money trying to keep their friends, family and entourage happy – they have to pay their own way!

I hope you enjoyed it and remember to avoid most of these purchases when you become rich – at least then you have the opportunity to become seriously wealthy.