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BEING A FINANCIALLY WISE BUSINESS OWNER
80% of all NBA players file for bankruptcy within five years of joining the team and getting a huge multi-million dollar salary. While there is no exact statistic for rappers, the number is probably close to 50%. Some of the biggest names in the game have gone totally broke and don’t even make records anymore due to financial issues. Aside from the NBA and the music industry, another place you see this trend is lottery winners. Roughly 80% of lottery winners are completely broke within five years. It’s interesting that the amount of time for both lottery winners and NBA players is five years, and also that the vast majority are effected by this.
It goes to show that being financially savvy is extremely important to the overall long term success of your business, even if you happened to stumble upon a few million dollars out of nowhere (which is unlikely as it is). But one cool thing about finances is that you can hold a small nut and feel rich while at the same time you can be given millions and be broke just a few short years later without anything to show for it. You can make just $3,000 a month and feel rich, though, if you’re financially stable. Let’s say all together your bills, including groceries and household expenses, end up being around $1,500 per month. At that rate, you have an extra $1,500 to spend every month to spend and if you put half of that into your savings and spend the rest, you’ll find you have plenty of money to go around.
The trick with financing though is to take into consideration every single thing you pay for. If you write out a budgeting plan and haven’t included monthly expenses such as tooth paste, mouth wash, deodorant and other household items, then you aren’t financing properly. At the same time if you don’t include investment money every month for your business, then you will find that you don’t have nearly the same amount of success in your financial future than if you did. Sometimes living with your parents for a few months while you get your business off the ground is even acceptable, as long as you end up succeeding and working ten hours a day to make it happen.