Keep This Emotion in Check, or It will Destroy You Financially

All humans have this trait, and if we don’t control it, it will destroy us all. I’m not talking about anger or violence.

A recent study has demonstrated that you are more likely to go bankrupt if you live near someone who just won the lottery.

In this study, the relationship is thought to be a 2.5% increase in bankruptcy likelihood for every $1,000 in neighbour winnings.

It seems that if your neighbour wins the lottery and starts showing it with more purchases, it is human instinct for you to spend the same to keep up. In most cases the neighbours don’t have the money to spend, so they borrow.

So keeping up with the neighbours is part of it, but the other is the most destructive human emotion I have discussed in past newsletters.

Envy. Humans are inclined to be envious of others who appear to be in a better position. It makes us often say and do very stupid things.

To keep it in check, remember to do this:

1. Focus on your own situation, not others. Wealth means spending less each month than you bring in or earn. That’s it. Simple.

2. Some who appear to be spending well above their means, even after a lottery win, are likely to continue even after the money is gone. That could be why, in some reports, 70% of those with a big lottery win report bankruptcy within a few years.

3. Be happy for those who are successful and fortunate. Celebrate your neighbours' victory, even if you do that by yourself. Be truly grateful for their good fortune.

4. Remember it may take many years for you to accumulate the assets and investments to Retire Young. Time is your true weapon, not a lottery ticket.

You should be fine if you live near a lottery winner and read this newsletter. That’s if you remember that ENVY is a terrible human trait—one to avoid at all costs.