Sustaining Wealth is Harder Than Getting Rich

Sustaining Wealth is Harder Than Getting Rich

by Ben Carlson

The Forbes 400 list of the world’s richest people looks fairly similar at the top every year.

Buffet, Gates, Bezos, Bloomberg and the Walton family are at the top of the list in some order year in and year out (they’ve been joined by Mark Zuckerberg in recent years as well).

But this list isn’t as stable as it may appear.

Over 70% of those who made this list (or their heirs) lost their status in this rarified group between 1982 and 2014. Getting there is easier than staying there for most.

High-income earners have a similarly difficult time staying at the top.

Research shows over 50% of Americans will find themselves in the top 10% of earners for at least one year of their lives. More than 11% will find themselves in the top 1% of income-earners at some point. And close to 99% of those who make it into the top 1% of earners will find themselves on the outside looking in within a decade.

I was reminded of these studies this past week after reading two stories of financial folly. The first was Spencer Pratt, the reality TV star from the MTV show The Hills (I may or may not have watched this show at one point).

CNN Money profiled how Pratt and his wife, Heidi, made and then spent millions:

By 2008, they were crazy famous, ridiculously rich, and it seemed impossible that they ever wouldn’t be.

“We were more famous and [making] more money than Kim Kardashian,” Pratt says.

But as frosted tips fell out of style, so did Speidi. MTV canceled The Hills after six seasons, and the Pratts’ luxurious lifestyle quickly caught up to them. After years of splashing $30,000 on shopping sprees and ordering $4,000 bottles of wine at dinner, the now-married couple had officially blown through their $10 million fortune. Tabloid OK! Magazine announced the news in all caps, writing“HEIDI MONTAG & SPENCER PRATT ARE BROKE.”

“It’s really easy to spend millions of dollars if you’re not careful and you think it’s easy to keep making millions of dollars,” 34-year-old Pratt says. “The money was just coming so fast and so easy that my ego led me to believe that, ‘Oh, this is my life forever.’”

To continue reading, please go to the original article here:

https://awealthofcommonsense.com/2018/07/sustaining-wealth-is-harder-than-getting-rich/