Can you handle a windfall of $? I'm starting to believe that I cant

[JEDI]

in the past 7months i've made almost 6figures in the stock market. (non-retirement)

its all on paper. i havent cashed out yet. in fact i went the other way and leveraged it.

yet im spending the $ like it's in my bank acct.

what got me to realize that i'm following the path of those broke lotto winners:
i lost $3000 over the weekend in atlantic city playing various games yet i'm acting like i just spent $1 on Megamillions and didnt win.

if this was Summer 2011 i would never believe i would act soooo irresponsibly 7months later with $ and just blowing it w/o batting an eyelash.

now to google the psych profile of broke lotto winners and not do the same thing as them

 

[Atomic Playboy]

Depends on how much money it is. If it were literally enough to retire permanently (invest it and live off the interest, so probably in excess of $20 million), yeah, no problem; I've already got a plan for that. But for sums of money that are much larger than I'm used to but not what I've planned for? I'd blow through that shit in a lot less time than I should. There's a big disconnect between "I have $100,000" and "I have an extra $5,000 per year."

 

[Dr. Zaus]

Send me the money I need an iPad 3.

 

[Doppel]

Yes, I could. If anything I'd end up dying of old age with more money left than I should. I have little doubt I'd have the restraint to use it properly. And I base this on personal precedent. If i were handed $50k today I wouldn't buy myself a present worth more than a couple thousand, the rest would go into investments/savings. Not a big spender on toys.

 

[kranky]

From reading your posts, you seem to treat the market as a form of gambling, not for long-term investment. Not saying that's wrong, but it may be why you are spending your profits. Most people who win at gambling spend the money. It's "free money", right? Just like all those broke lotto winners say.

Your "leveraging" is the same as the football bettor who plays a 3-team parlay. Gambling your wins to get a bigger win. Go big or go home, as they say.

If you use the market as a form of gambling, it makes sense that you will treat your results as a gambler does. Something to think about.

 

[Doppel]

From reading your posts, you seem to treat the market as a form of gambling, not for long-term investment. Not saying that's wrong, but it may be why you are spending your profits. Most people who win at gambling spend the money. It's "free money", right? Just like all those broke lotto winners say.

Your "leveraging" is the same as the football bettor who plays a 3-team parlay. Gambling your wins to get a bigger win. Go big or go home, as they say.

If you use the market as a form of gambling, it makes sense that you will treat your results as a gambler does. Something to think about.

You failed to add that gambling done long enough is almost sure to lead to some level of ruin. It's like Godwin's law for money.

 

[EagleKeeper]

If it is all on paper; then you apparently have enough other income to support your lifestyle. What is the issue?

 

[Anubis]

i beleive i would be able to handle it just fine

 

[Triumph]

Yes I absolutely could handle it, because I'm a possessive tightwad and much like the dragon sleeping on a pile of gold, I'd notice if even the smallest nugget went missing.

 

[JTsyo]

Yes I absolutely could handle it, because I'm a possessive tightwad and much like the dragon sleeping on a pile of gold, I'd notice if even the smallest nugget went missing.

I'm not quite as bad but I'm very careful with spending. As long as the amount we got was enough to finish the mortgage, then my wife could quit her job. Anything above that would probably get put away with maybe a few grand spend on toys.

 

[Jeffg010]

Yes I can and go read my post about how to do it. What ever amount you get just figure out how much a year you can spend until 80 or 90 or 100 years old. Then divide that amount by 365 and then only let that amount be deposit in you checking once a day.

http://forums.anandtech.com/showpost.php?p=32971814&postcount=76

 

[manimal]

The month last year where we made the most money was the month I cancelled the premium channels on cable. I know first world problems.


I have had various windfalls in my life after selling two business earlier in my life as well as cashing out rental properties in 2006. Biggest thing we did that was splurgy was taking a trip in 2008 to south America and Antarctica.

Its hard to stop thinking like a poor person when you have money if you know whats its like to not have any.

We had a good year this year so our charitable contributions are going up as well as our savings.

Make a plan and stick to it rain or shine.

 

[OILFIELDTRASH]

I've been blessed to make a decent living thus far. Even still I don't have cable/sat, don't go out to eat but maybe 1-2x a month and even then it's somewhere cheap, buy everything in bulk, do everything I am qualified to do myself (oil changes, mow the lawn, etc..)
I understand the value of money.

 

[IcePickFreak]

I think I'd be ok, but I'd definitely spend some of it on "useless" stuff. I have relatively expensive hobbies.. cars and marine aquariums aren't "a dollar here, a dollar there" things. If I won tens of millions of dollars, I'd likely have a 20+ car garage with one wall of it being a big aquarium.. and probably an 800 sq. ft. house to eat/sleep/shower in.

 

[SandEagle]

i would spend it all in days. gold plated spinners on my honda? hell yeah!!

 

[artvscommerce]

go buy some monster cables from best buy! they need the business.

 

[SlitheryDee]

As long as it's not the lottery I'd handle it just fine.

 

[Tweak155]

I wouldn't say $100k over 7mo is a "windfall", a lot of salaries are that high.

That said I realize your point that it is simply "extra" money. The first thing you should be doing is paying down any debts with an interest rate over 3-4%. If that is out of the way and you still have a salary, why not have some fun?

 

[Train]

I wouldn't say $100k over 7mo is a "windfall", a lot of salaries are that high.

a lot?

$171,428.57 / year would put you in the top 1.5% of all income earners in the USA.

 

[Jeffg010]

a lot?

$171,428.57 / year would put you in the top 1.5% of all income earners in the USA.

But some how they all seem to be on atot.

 

[D1gger]

in the past 7months i've made almost 6figures in the stock market. (non-retirement)

its all on paper. i havent cashed out yet. in fact i went the other way and leveraged it.

yet im spending the $ like it's in my bank acct.

what got me to realize that i'm following the path of those broke lotto winners:
i lost $3000 over the weekend in atlantic city playing various games yet i'm acting like i just spent $1 on Megamillions and didnt win.

if this was Summer 2011 i would never believe i would act soooo irresponsibly 7months later with $ and just blowing it w/o batting an eyelash.

now to google the psych profile of broke lotto winners and not do the same thing as them

The bolded section would worry me the most. If by "leveraged it" you mean that you are now on margin with options or stock purchases, then you are at risk of losing all of your profit, and perhaps even what you started with.

There is no harm in treating yourself if you come into some extra cash, but the way I read your thread is that you haven't come into any extra cash, you have taken on a liability that may or may not turn into more cash.

 

[Tweak155]

a lot?

$171,428.57 / year would put you in the top 1.5% of all income earners in the USA.

And how many people is that? It isn't some tiny number, it is just a small percent.

 

[JEDI]

Depends on how much money it is. If it were literally enough to retire permanently (invest it and live off the interest, so probably in excess of $20 million), yeah, no problem; I've already got a plan for that. But for sums of money that are much larger than I'm used to but not what I've planned for? I'd blow through that shit in a lot less time than I should. There's a big disconnect between "I have $100,000" and "I have an extra $5,000 per year."

funny in that whenever i get a raise i dont spend it. i just save it.

no idea why $100k changed my mindset to that of a broke lotto winner???


edit:
maybe i'm blowing thru the $100k because i didnt feel like i earned it?

i save my raises because it felt earned to me.

 

[Tweak155]

funny in that whenever i get a raise i dont spend it. i just save it.

no idea why $100k changed my mindset to that of a broke lotto winner???

I think it is how you got it, not so much the total.

EDIT:

Time warp! First time for me lol.

 

[Miramonti]

Congrats, great job on the investment choices.

A lot of people have done very well or recovered a lot of funds in this recent rally. Fwiw, a difficult thing about investing or trading the stock market over the long haul is after doing well, making decisions like you still can't afford to lose money. People get careless and lax once they feel less pressure to be right. Also, make sure you know what your tax liabilities are so that this amount is secured for the wonderful irs.