- Life is not about the money
- It’s an arbitrary number
- It fails to take into account other life goals
- It won’t make you happy
- It gives you the wrong focus
- It’s a lifestyle trap
Becoming a millionaire means that you’re in a different tax bracket, which means that you’ll end up paying more money in taxes. A lot of people don’t factor in the tax amount when they think about becoming a millionaire. Additionally, while the federal government has set tax brackets, the tax brackets for your specific state vary. Recently, many states have been raising the tack brackets for people who earn more than $1 million in a given year.
More Time Without Money
Having more money means spending more money on your finances. You’ll no longer be able to just your bills and balance your checkbook. With millions in the bank, you’ll have to spend more time budgeting your money, figuring out where to save or invest it, or learning how to manage it. With more money comes more responsibility.
While having more money means spending more time managing it, it also means that there’s more maintenance required. While most people maintain their bank accounts by balancing their checkbook or depositing into their savings account, becoming a millionaire means having to do a lot more than that. If you don’t have a lot of knowledge about financial management, you’ll have to work with someone to better understand how to manage your money. Your yearly taxes will be more involved than before and you may have to consider how to invest, save, or donate your money.
A lot of people who suddenly come into large amounts of money go out and start buying all the items they once coveted. However, doing so can often lead to overspending and before you know it, you’re no longer a millionaire. How many celebrities have you seen who go from having it all to having nothing because they have poor money management skills or buy too many luxury items? It’s easy to want to spend money when you have it, but letting money burn a hole in your pocket can lead you to financial ruin.
If you read any story of someone who won the lottery, started a successful company, or hit millions for one reason or another you’ll almost always hear about how they’re inundated with long lost relatives or friends. Even close friends and family might start hitting you up for money, assuming that since you have millions in the bank you can “loan” some to them without any worries. While it may be nice to have that money in the bank, becoming a millionaire also means that you run the risk of being taken advantage of or people only wanting to associate with you because you suddenly have money.
Stress of Having Too Much Money
While living paycheck to paycheck or having no income is definitely more stressful than having millions in the bank, being a millionaire can also be very stressful. Not only do you have to manage your money more carefully, but you also have to figure out if you want to invest it in stocks or assets, whether you want to donate to receive tax write-offs, or how and where you want to save it.
People can become millionaires in a lot of different ways, but no matter how you come into the money you always have to figure out how to keep it. For instance, if you earned your money through a company you have to ensure that the company maintains its profits so you don’t lose that income. If you became a millionaire through winning the lottery or a similar means, you have to worry about not spending all of that money and saving some for your future.
Photo: Flickr: Pictures of Money