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Millionaires are different.

December 5, 2009

Telling you about a counseling case I once had may help you understand why you lose money when you suddenly come to a lot of cash in life. My patient lost half his $1,000,000.00 that he won in a California lottery before he found the wisdom to seek counseling.

“My problem wasn’t my friends or relatives that suddenly became friendly. I loaned $10,000.00 to my cousin to start his business, I gave money to grandma,  I said “no” to a few others.”

“How did you lose half a million?”

“I listened to the ‘sharks,’ who showed up in my life as sleek as bankers and lawyers with irresistible offers to triple my money within a year or two.”

My patient was breathing heavily, visibly upset talking about it. I brought him a cup of coffee. “George, you were…”

“I was greedy,” he interrupted… “and stupid, “how can I forgive myself?”

“You will forgive yourself. You were not stupid or greedy. Your problem was that you suddenly had a million $$$ without the preparation you needed to think like a millionaire.”

“You mean having a million $$$ doesn’t make you a millionaire?”

“That’s right, and being a millionaire doesn’t mean you have a million bucks.”

“Wow!”

That counseling session occurred 30 years before I wrote the book The Psychology of Investing. If it happened today I would have said, “George Tweedie, read my book. You need to think like a millionaire, act like a millionaire, wear expensive clothes, drive a fancy car, and relate to people from a position of authority.”

“I think I got it, Dr. Kinarthy, scary indeed, if I don’t think like a millionaire I may lose the other half a million.”

I wonder where Mr. Tweedie is today? Many lottery winners become poor again –  some even buying lottery tickets after the big winnings have already been claimed (or stolen).

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