2581: What Do You Do After You Make A ZILLION Dollars? by James Altucher on Sudden Wealth & Financial Management

[00:00:00] [SPEAKER_00]: This is Optimal Finance Daily, Episode 2581.

[00:00:04] [SPEAKER_00]: What Do You Do After You Make A ZILLION Dollars by James Altucher of Jamesaltucher.com

[00:00:10] [SPEAKER_00]: And I'm your host and personal finance enthusiast, Diania Merriam.

[00:00:15] [SPEAKER_00]: This is actually one of multiple shows in our network covering different topics like personal development, health, relationships, and your work life.

[00:00:23] [SPEAKER_00]: So if you like narration style podcasts, be sure to search for Optimal Living Daily wherever you're hearing them.

[00:00:30] [SPEAKER_00]: And check out our other shows.

[00:00:32] [SPEAKER_00]: But for now, let's get right to it and continue optimizing your life.

[00:00:40] [SPEAKER_00]: What Do You Do After You Make A ZILLION Dollars by Jamesaltucher of Jamesaltucher.com

[00:00:47] [SPEAKER_00]: In the dot-com boom, I made a little bit of money and then proceeded to make every mistake possible with that money.

[00:00:55] [SPEAKER_00]: It was like reading a Stephen King horror story written in blood across your bank statement.

[00:01:01] [SPEAKER_00]: Several years later, I included the story in the intro to one of my books and gave the book to a potential investor.

[00:01:08] [SPEAKER_00]: He read the intro and said, I can't invest in you. You're a functional idiot.

[00:01:13] [SPEAKER_00]: And yet I've seen the pattern repeated so many times with so many people.

[00:01:17] [SPEAKER_00]: Can I at least enjoy the company of other idiots?

[00:01:21] [SPEAKER_00]: So to help out others who will pocket some of the $600 billion in quantitative easing,

[00:01:26] [SPEAKER_00]: I have a few simple tips for greatly improving the chances of success if you have sudden fortune thrust upon you,

[00:01:34] [SPEAKER_00]: either through your hard work or simply by chance.

[00:01:38] [SPEAKER_00]: Number 1. The One Year Rule

[00:01:41] [SPEAKER_00]: Don't change your lifestyle at all for at least one year.

[00:01:45] [SPEAKER_00]: No new house or apartment. Don't buy a fancy car. Don't buy expensive artwork.

[00:01:50] [SPEAKER_00]: This is not to say these things are bad.

[00:01:52] [SPEAKER_00]: It's just that you need to let the new wealth marinate your soul a little bit.

[00:01:57] [SPEAKER_00]: Get comfortable with it before you try on new clothes that might not fit yet.

[00:02:01] [SPEAKER_00]: Once you buy some massively expensive toys or homes, it changes your whole perspective

[00:02:06] [SPEAKER_00]: and might make you much more foolish than you were when you were first climbing the ladder of success.

[00:02:13] [SPEAKER_00]: Remember, one year.

[00:02:16] [SPEAKER_00]: Number 2. The No Friends Rule

[00:02:19] [SPEAKER_00]: Don't lend money to old friends. Don't be so quick to make new friends.

[00:02:25] [SPEAKER_00]: Once you make money, everyone will approach you about new investments you can make,

[00:02:29] [SPEAKER_00]: or people will want to borrow money from you.

[00:02:32] [SPEAKER_00]: Don't do either. It's very hard of course to deny a friend who says,

[00:02:36] [SPEAKER_00]: listen I just need to borrow $100,000 for 90 days,

[00:02:40] [SPEAKER_00]: or I have a great new startup that looks like Twitter but better.

[00:02:44] [SPEAKER_00]: I'm just raising $500,000 and I left $300,000 for you to come into the round.

[00:02:50] [SPEAKER_00]: But here's what you can say.

[00:02:52] [SPEAKER_00]: I'd love to do it. It sounds great.

[00:02:54] [SPEAKER_00]: Right now everything is tied up with my financial advisor and you can talk to him.

[00:02:59] [SPEAKER_00]: I have to go by what he says because of all the legal stuff I don't understand.

[00:03:04] [SPEAKER_00]: And then get some guy to pretend to be your financial advisor

[00:03:07] [SPEAKER_00]: who can get you off the hook by denying your friend.

[00:03:09] [SPEAKER_00]: I know it's dishonest and devious, but it's necessary if you want to keep your friends,

[00:03:16] [SPEAKER_00]: particularly in year one. See previous rule.

[00:03:20] [SPEAKER_00]: Number three, don't invest.

[00:03:24] [SPEAKER_00]: What's the rush? You just made your money.

[00:03:26] [SPEAKER_00]: Put it in a savings account for one year at least.

[00:03:29] [SPEAKER_00]: Or under your mattress.

[00:03:31] [SPEAKER_00]: No stocks, no paintings, no private investments.

[00:03:34] [SPEAKER_00]: Try not to start a business again so quickly.

[00:03:36] [SPEAKER_00]: A friend of mine recently won $3 million in a poker tournament after being broke for many years.

[00:03:43] [SPEAKER_00]: All his life. Right away he wanted to buy a hotel.

[00:03:47] [SPEAKER_00]: Don't do it.

[00:03:49] [SPEAKER_00]: This was right before the entire housing crisis and recession that followed.

[00:03:53] [SPEAKER_00]: Thank God he took my advice.

[00:03:55] [SPEAKER_00]: If you feel absolutely compelled to do some investing, then follow the next rule.

[00:04:00] [SPEAKER_00]: Number four, the 2% rule.

[00:04:03] [SPEAKER_00]: If you really feel that Google is going to $5,000 per share and you have to buy some stock at $500,

[00:04:10] [SPEAKER_00]: don't put more than 2% of your money into it.

[00:04:13] [SPEAKER_00]: Then if it all goes to f**k, you've only lost 2% of your money.

[00:04:17] [SPEAKER_00]: Or more likely 1%, since Google will probably never go down more than 50%.

[00:04:22] [SPEAKER_00]: This is hard for entrepreneurs who come into sudden wealth

[00:04:25] [SPEAKER_00]: because they're used to making their money by having most of their net worth tied up in one investment, their business.

[00:04:31] [SPEAKER_00]: But this is probably the most important rule on the list.

[00:04:35] [SPEAKER_00]: Number five, the good health rule.

[00:04:39] [SPEAKER_00]: Believe it or not, your health is now at risk if you just came into sudden wealth.

[00:04:44] [SPEAKER_00]: A friend of mine had a very stressful business in the online gambling space.

[00:04:49] [SPEAKER_00]: He was worried the feds were going to outlaw him and arrest him.

[00:04:52] [SPEAKER_00]: He was broke and the business was always in a state of running out of money.

[00:04:56] [SPEAKER_00]: High, high stress.

[00:04:58] [SPEAKER_00]: I thought he was going to have a stroke or a heart attack, but he always stayed in great health.

[00:05:03] [SPEAKER_00]: Then he sold his business and made about 50 million.

[00:05:06] [SPEAKER_00]: Three months later, he was on a ski slope in Aspen enjoying the fruits of his labor

[00:05:10] [SPEAKER_00]: when he suddenly had a major heart attack and only survived because of immediate medical care.

[00:05:16] [SPEAKER_00]: He was essentially dead for five minutes on the operating table.

[00:05:20] [SPEAKER_00]: Your body in a high adrenaline situation will postpone punishing you until the situation is over.

[00:05:26] [SPEAKER_00]: But don't think when the stress is over that your body will forget.

[00:05:30] [SPEAKER_00]: It doesn't.

[00:05:32] [SPEAKER_00]: You must focus on health after achieving sudden wealth.

[00:05:36] [SPEAKER_00]: And number six, try not to burn out.

[00:05:39] [SPEAKER_00]: Your business was brutal.

[00:05:41] [SPEAKER_00]: I know I've been there.

[00:05:43] [SPEAKER_00]: Clients and customers are sometimes hard to deal with.

[00:05:46] [SPEAKER_00]: And now you might have employers who just bought your company that you have to report to.

[00:05:51] [SPEAKER_00]: But don't burn out just yet.

[00:05:52] [SPEAKER_00]: You need to be responsible and show the people around you that they all made the right decision

[00:05:56] [SPEAKER_00]: in trusting you and buying your business and buying your goods and services

[00:06:00] [SPEAKER_00]: and working for you, etc.

[00:06:03] [SPEAKER_00]: You have few chances in life to demonstrate that you're made of the right stuff

[00:06:06] [SPEAKER_00]: and this is one of them.

[00:06:09] [SPEAKER_00]: And what to do if you lose it all?

[00:06:11] [SPEAKER_00]: Don't worry.

[00:06:12] [SPEAKER_00]: There's no such thing as luck.

[00:06:14] [SPEAKER_00]: In the chess playing world there's a saying, only the good players are lucky.

[00:06:19] [SPEAKER_00]: That applies to business as well.

[00:06:20] [SPEAKER_00]: People can say you were lucky, but the truth is you'll be able to do it again and again

[00:06:26] [SPEAKER_00]: no matter how deeply you fall.

[00:06:28] [SPEAKER_00]: Trust this and follow these rules and sudden wealth will become permanent wealth.

[00:06:37] [SPEAKER_00]: You just listened to the post titled,

[00:06:40] [SPEAKER_00]: What Do You Do After You Make A Zillion Dollars?

[00:06:43] [SPEAKER_00]: by James Altucher of JamesAltinger.com

[00:06:46] [SPEAKER_00]: Buy Low, Sell High.

[00:06:48] [SPEAKER_00]: Buy Low, Sell High.

[00:06:50] [SPEAKER_00]: It's a simple concept.

[00:06:51] [SPEAKER_00]: But not necessarily an easy concept.

[00:06:55] [SPEAKER_00]: Right now, high interest rates have crushed the real estate market.

[00:06:59] [SPEAKER_00]: Prices are falling and properties are available at a discount.

[00:07:03] [SPEAKER_00]: Which means Fundrise believes now is the time to expand

[00:07:06] [SPEAKER_00]: the Fundrise flagship funds billion dollar real estate portfolio.

[00:07:12] [SPEAKER_00]: You can add the Fundrise flagship fund to your portfolio in minutes

[00:07:16] [SPEAKER_00]: by visiting fundrise.com slash OFD.

[00:07:20] [SPEAKER_00]: That's F-U-N-D-R-I-S-E dot com slash OFD.

[00:07:28] [SPEAKER_00]: Carefully consider the investment objectives, risks, charges,

[00:07:32] [SPEAKER_00]: and expenses of the Fundrise flagship fund before investing.

[00:07:37] [SPEAKER_00]: This and other information can be found in the funds prospectus

[00:07:41] [SPEAKER_00]: at fundrise.com slash OFD.

[00:07:45] [SPEAKER_00]: This is a paid advertisement.

[00:07:48] [SPEAKER_00]: This article made me think about the benefits of having clearly

[00:07:52] [SPEAKER_00]: defined financial goals and plans.

[00:07:54] [SPEAKER_00]: Because this makes it much simpler to manage a financial windfall.

[00:07:59] [SPEAKER_00]: A good rule of thumb is to treat unexpected money similarly

[00:08:03] [SPEAKER_00]: to expected money.

[00:08:05] [SPEAKER_00]: The key is to view windfalls as accelerators to thoughtful

[00:08:09] [SPEAKER_00]: planning rather than opportunities for impulsive spending

[00:08:13] [SPEAKER_00]: or investing.

[00:08:13] [SPEAKER_00]: If you have a well-defined plan with a clear order of operations,

[00:08:18] [SPEAKER_00]: a windfall can serve as a catalyst to expedite your progress.

[00:08:23] [SPEAKER_00]: Consider allocating the funds towards high priority objectives,

[00:08:27] [SPEAKER_00]: such as paying off debts, building an emergency fund,

[00:08:30] [SPEAKER_00]: or investing for the future.

[00:08:31] [SPEAKER_00]: And depending on the size of the windfall,

[00:08:34] [SPEAKER_00]: it might make sense to reassess your financial goals

[00:08:36] [SPEAKER_00]: and priorities, but I appreciate how James recommends

[00:08:39] [SPEAKER_00]: to take your time here.

[00:08:42] [SPEAKER_00]: That should do it for today. Have a happy rest of your day,

[00:08:46] [SPEAKER_00]: and I'll see you on the Wednesday show tomorrow

[00:08:48] [SPEAKER_00]: where your optimal life awaits.