I read this article a few days ago and I knew I had to blog about it. I love this article because it affirms my definition of being rich. Here is this larger than life stockbroker who at one point in time was making more that $750,000 a year, had all the toys and the big house, yet he is broke within 3 years once his income stops coming in. I don't want to make it sound like I am relishing in someone else's pain because I am not. However, I think that his story is an excellent illustration of how the conventional definition of rich is flawed. Making $750,000 a year does you no good if you have $751,000 going out the door. It is all about managing you cash flow and making the surplus of cash coming in work for you through various investment vehicles. I think it is ironic that Ken was paid very handsomely for managing other people's money yet it took him becoming a pizza man making $7 an hour to learn to manage his own. Take note of this lesson and don't fall into the consumerist trap of upping your lifestyle faster than your income, it's not realistic for one and it surely won't make you happy in the long run.
3 comments:
have you read the article in the latest sports illustrated about how pro athletes find themselves dead broke shortly after retiring? It's the same type story as here with Ken and is very interesting to see the amounts of money these guys get used to spending.
I haven't seen it but I would love to. I've actually talked to Pauly about that a little bit. Even in the NHL which typically has more reserved personalities there are many players that are clueless when it comes to personal finance.
Badski
He was paid well to manage people's money, but clearly he did no managing - he did a lot of moving money around (and losing a hell of a lot of it). There were lots of "stockbrokers" and "money managers" who were incompetent fools and lost lots of people money. Of course, those people put their faith in these incompetent fools - lots of blame to go around.
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