The appeal of the Dot Com Lifestyle is that of freedom. I’ve talked about this before, how time freedom and location freedom are the most valuable aspects of making money online. Another big part of it has to do with the sense of ownership that you get when you work for yourself, running your own business.
And with a little sweat on your brow, a healthy dose of stubborn dedication, and a dash of luck on your side, you may achieve a certain level of money freedom too. You don’t have to think twice about spending $3,000 on a couple of office chairs for you and your daughter. The money, in and of itself, becomes far less of a concern. But the only way that you can get to this point is if you have a firm grasp on the money in the first place.
Bad With a Dollar
The stats on this will vary base on who you ask, but the National Endowment for Financial Education estimates that about 70 percent of people who win the lottery (or receive some other large financial windfall) end up broke within a few years of getting the cash.
How does that make any sense?
Well, you have to realize a couple of things here. First, the demographic of people who buy lottery tickets, particularly those who buy them every week or buy them in large quantities, tend to be people who aren’t particularly wealthy. By and large, rich people don’t buy lottery tickets. And while some lottery ticket buyers are financially responsible, certainly, I imagine a sizable proportion are not. That’s why they’re making a fool’s investment as they might think it’s their only hope of striking it rich.
And then you have to realize that if someone is bad with a dollar, they’re going to be that much worse with a million dollars. Or one hundred million dollars. Many lottery winners don’t know what to do with themselves when they have that much cash, so they spend it frivolously. If they were able to rack up thousands of dollars in debt before, imagine how much overspending they’re going to do now.
Living Paycheck to Paycheck
Normally, when we think of people who are living paycheck to paycheck, we imagine people who are stretched beyond their means. Maybe they only work a part time job and they wish they had more hours. Maybe they work a job that doesn’t quite pay enough. Maybe they don’t know how to rein in their expenses.
So, it might surprise you that over three-quarters of full-time workers in the United States are living paycheck to paycheck. With numbers like that, it’s not just people in poverty who are struggling to make ends meet. It’s a lot of middle class families. And indeed, it’s a lot of people who are making more than six figures too.
Maybe they took on a mortgage that is too big. Maybe they took on a car payment that is too big. Maybe they put their kids through too many expensive activities or they take too many fancy vacations. That’s the thing. Looking rich is not the same as being rich. The guy with the big house and a sports car in the driveway could be drowning in mountains of debt. That’s not the Dot Com Lifestyle.
Making Money Is Good, But…
Here’s one last stat to consider, the one that served as the inspiration for the title of today’s blog post. Some 47 percent of Americans surveyed said that they would not be able to sustain an unexpected emergency expense of $400. They don’t have enough of a cushion there to absorb spending an extra $400 on something they didn’t expect.
That’s not very much money at all. This means that if they suddenly need to replace the hot water boiler in their home, if they need to get some new brakes for the car, they won’t be able to afford it without having to sell something or to take out a loan. That’s crazy.
And what this means if you make money online as a dot com entrepreneur, it means these people wouldn’t be able to replace their computer monitor if it suddenly went on the fritz. And if you can’t see what your computer is doing, you certainly can’t make money on the Internet.
It’s not enough simply to make more money online. That’s good, but it’s not enough. You need to be smart about what you do after you’ve made that money. You need to know how to invest it, save it, set it aside or put it to good use. In short, you need to be smart with a dollar so when the time comes, fingers crossed, you’ll be smart with a million dollars.