Stop Waiting for the Windfall
There are many things keeping you poor. I've talked about spending habits, but there is another thing specially prevalent in the today's society: betting on a windfall.
A windfall (n.) is defined as a large sum of money received.
This could come in many forms: bonus pay, inheritance, or more commonly, lottery winnings. Windfalls are like checkpoints in life; they give you a chance to forget about bills and enjoy life, even for a moment.
I remember my earliest windfall: my Christmas bonus check. It was a check on top of my salary, and for the month I received three times what I normally got. I was elated, and before I even got the chance to deposit the check, I was already dreaming up all the things I would buy with the money. A new phone? A new computer? Of course I'd be stopping by Starbucks and treating my family to expensive restaurants. A few weeks later, I was back keeping just above my maintaining balance and waiting for the next paycheck to arrive.
What happened to all that money?
That is the biggest problem I have with windfalls, and it's a tale as old as time. Statistically speaking, most lottery winners end up broke a few years after winning. Many salary men like myself at the time end up spending bonuses and have nothing to show for it after. The emotional response to receiving a windfall is overwhelming to most people, because most people aren’t financially literate.
People struggle because they have a hard time separating luck from just compensation. When people get a windfall, they feel they are entitled to it, as if all their suffering was leading up to that one moment. When in reality, windfalls just come, whether you deserve them or not.
Bad people get rewarded all the time, and good people are left in the dirt and forgotten.
Many don't know or accept this fact. So when a large sum of money comes, they end up losing it as fast as they get it.
So they go back. To the grind, to the hustle, hoping that one day their moment will come once again. But next time, it will be different (they say). It never is.
I say waiting for windfalls is a thing poor people do.
Are you waiting for your next bonus? That's why you are poor.
Are you hoping to win the next lottery? That's why you are poor.
Are you waiting to be compensated for all your hard work in a company that only sees you as an employee number? That's why you are poor.
Waiting for windfalls is admitting you have no agency in your life. That everything in the universe just needs to align for you to have your moment. Statistics are against you. Many people die poor—when was their life-changing windfall?
YOU CAN’T BE PASSIVE TOWARDS YOUR BETTERMENT.
This applies to every aspect of your life, but we are talking about money. And the most active thing you can do to improve your finances is set some of your income aside. It doesn’t matter how much—just set some of it aside. Waiting for a windfall is a fool’s errand, because you are taking yourself out of the equation. So just make the windfall.
I have three money accounts: one is for my daily spending, the other is my savings, and the third is my stock portfolio.
Every month I take 30% of my income and use it to buy index funds. I take 20% for my savings. Thirty percent goes to rent, and the remaining 20%—and all bonuses—go to spending on whatever the fuck I want. I send money home, I buy something from Amazon, I take JM out for a date, I spend guilt- and worry-free.
And after a couple of years, with 50% set aside monthly, I would have created my windfall.
Because that's what people should be doing instead of waiting for a big pile of money: building their wealth.
The goal right now is to live off dividends—so around half a million euros; we’ll talk about this when it happens. In the meantime, I'm not twiddling my thumbs and hoping that a large bag of cash falls in my lap. I do the only thing I can do: set money aside and save.
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