Who Wouldn’t Want to Be a Millionaire: 6 Life-Winning-Lessons From a “Who Wants to Be A Millionaire” Contestant

What would you do if you received a $ 1 million jackpot? How does it actually feel to receive a windfall? What to do with it and how could it impact your life in the short, medium and long run?

Let’s first think about what you could possibly do with a large financial windfall?
– splurge (Sir? The Lamborghini in same gold as the Maybach?)
– take a sabbatical and travel to exotic locations, sipping martinis all day long
– travel to Vegas (all or nothing)
– re-invest in lottery tickets
– buy a house and/or pay-off your mortgage
– invest all into Vanguard ETFs and draw an annual $40,000 forever (Trinity study, 4% withdrawal rate)
– keep calm and carry on

Here’s what a Financial Imagineer would do with a $ 1 million windfall:

Keep calm and carry on!

 

Keep calm and carry on!

You find this hard to believe?

Looking through all the above options, this clearly appears to be the most boring choice. But hey, I’ve got a rather personal story for you guys today. Let me explain.

Once upon a time, I won a windfall myself.

I wanted to be a Millionaire.

We write the year 2001, my most crazy side-hustling days: During daytime, I was usually studying business administration and economics. Frequently, after sundown, you’d find me baking up to 200 pizzas each night at the first pizza home delivery franchise in my hometown. Saturdays, you’d find me advising clients at a bank counter and Sundays I’d be running the local polling station in our village.

Some wondered if I’d ever catch some sleep.

One evening, I was sitting on our couch watching the Swiss edition of “Who wants to be a Millionaire” on TV3. Somehow, none of the contestants ever seemed to make it past the first 10 questions. It got boring and frustrating. It quickly became painful for me to keep watching. I knew and appreciated the show from abroad and generally liked it because you usually learnt something while watching – infotainment. The entertainment value of the local version was rock-bottom. This tickled a nerve.

Instead of applying the ordinary way, I sent a feedback letter asking them to invite more suitable candidates in order to improve the infotainment value of their show. Little did I know that my written rant would be read and acted upon. Before I knew it, we – my then girlfriend and myself – got invited to participate as contestants at the TV show “Who Wants to Be a Millionaire”.

Turn sound on, click “play” and listen as you read on!

We spent the two weeks prior to the recording with extensive preparations. Since nobody could every finish reading Wikipedia (back then it was the Microsoft Encyclopaedia on CD Roms), we started feeding our brains with compressed wisdom using books like “The Knowledge Book: Everything You Need to Know to Get by in the 21st Century”. We also played the computer game of “Who Wants to Be a Millionaire” over and over again in order to get into shape and learn how we’d react if under pressure and what mistakes to avoid.

Ready Player One

Two weeks later it was showtime.

We entered the TV studio. The recording started. Game on. First question. Bam, I got on the hot seat. From there, everything went incredibly fast. And after less then 2 hours in the TV studio I was fortunate enough to have won a large windfall for the first time in my life.

How much did we win?

Actual screenshot from Swiss TV3 (2001)

We cleared about $125,000.

I was young, 21 years young to be exact, ran out of all three jokers and decided to call it a day. It felt surreal.

A short moment later they ripped the cables and microphones off me. There are still some blurred memories of me having shaken the show masters’ hand. My knees were soft, somehow it felt like flying on cloud number 9 to the back of the stage.

All of a sudden somebody tipped my shoulder, they pulled me back to reality.

A pen was handed to me and I was asked to clear the paper work in legalese. I signed. Sign-off here, sign-off there. Besides confirming how much we’ve won, the TV station asked me to also sign a non-disclosure agreement: We were not allowed to reveal the outcome of the show to ANYONE until the show was aired. It took another two weeks until my episode was on TV.

We went home.

Stealth wealth mode.

Swiss banking secrecy.

I knew the drill.

The Aftermath

In hindsight, this was probably the most awkward AND best situation I could ever have asked for. It was stealth-wealth practice. Maybe you have also read articles about how most lottery winners can’t handle a windfall and end up broke. I had time – time to think about how to win at life – despite having won a small fortune.

Here I was. Glowing in the inside. Ice cold on the outside. Poker face. Not allowed to talk about my experience of just having won a windfall. Pretending nothing has happened and going back to my normal busy life.

Some of my friends and colleagues knew that I participated on the show. Of course they asked all kind of questions. I played along and didn’t bother to talk too much about the show anymore for two weeks. I was back to “business as usual mode” and kept hustling. Literally the very next day, I was baking 200 pizzas again as if nothing happened. Many assumed that the show didn’t work out for me. At all.

Two weeks later, the TV show finally aired.

As the news spread, some colleagues wondered why I still show up at work and continue to bake pizzas until midnight, continue to advise banking clients on Saturdays and still rely on public transportation instead of buying a car.

What does a 21 year old do with a six-figure bank account?

First thing: I went to the ATM and printed an account statement for the record.

Nice, but now what?

The Splurge

It was a real honor for me as a young BA and Economics student to invite our family and selected friends for a restaurant celebration meal with drinks. Thereafter, we also splurged about $500 for a short break to sunny Spain, paid our taxes (ouch) and most importantly invested ALL the remaining into boring mutual funds.

That’s it.

Nothing else.

About two months later, we were back to normal and carried on with our lives.

Did my life change at all after that event?

Hell yeah it did!

Not immediately, but slowly.

The Transformation

Having had the extra cash aside, I slowly realized how much power came with it. Power over your own time and life. While most of my university classmates couldn’t wait to have their employment papers signed, I was dreaming to learn more, explore and discover the world.

Explore, Dream, Discover

With a fresh Masters Degree in my pocket, I took off on a 3 months backpacker trip to Central America. Learning Spanish, exploring a foreign culture and another way of life was extremely refreshing and eye-opening.

On my trip, I passed through New York, Toronto, then Bocas Del Torro in Panama, Turrialba in Costa Rica and many other exciting places. The scuba-dive course was $200. Spanish lessons came at $15 half a day including free coffee and internet. A night in a hostel was $7. Arroz con pollo $2 and cerveza for $1. The ultimate luxury dish, fresh caught lobster, butterfly style, set me back $5. Beautiful.

Bocas del Torro, Panama, watertaxi to Red Frog Beach (2003)

Conclusion: I learned a new language. Price tag: $3,000 and 3 months of my time.

It came with fun, adventure, new friendships and unforgettable memories. Actually, back in high school I sucked at learning languages! Now, without the pressure, I was enjoying it! Muchas gracias!

On the flight back home I got sad that this “graduation trip” is over. Then it dawned on me: While I was away, my investments more than fully covered for the trip already. Passively.

Bazinga!

“If you don’t know where you are going, you might wind up someplace else.”
– Yogi Berra

This experience taught me that I enjoy getting lost in other cultures, eating stuff I’ve never tried before and exploring how other people live on this planet. My logical conclusion therefore was to double dare myself and set an even more ambitious target: learning Chinese. In early 2004 I left home again. This time to live and work in Taiwan, thanks to AIESEC.

I stayed in Taiwan for almost three years, worked for three different companies, learned Mandarin Chinese, and got to know my future wife. A whole new world opened itself: The Chinese hemisphere with all its opportunities.

Badaling, the Great Wall of China (2005)

In 2007 we – my beautiful, loving wife and I – returned to Switzerland. To say the least, the newly acquired Mandarin Chinese language skills and the cross-cultural awareness opened the door to a promising job covering Chinese speaking clients.

“Time is more valuable than money. You can always get more money, but you cannot get more time.”
– Jim Rohn

Don’t just invest your money, make sure that you also invest your time.

6 Life-Winning-Lessons

1) Keep Calm and Carry On.

If you win the jackpot, receive a windfall or get a huge inheritance: Keep calm and carry on. Circuit-break your natural busyness and stop the rat-race for a moment. Don’t adjust your lifestyle right away. You got all the time in the world to adapt slowly. Invest into buying time!

Make it a blessing, not a curse.

2) Take a Break and Celebrate Your Windfall.

Commemorate your big moment. Spend something but don’t splurge.

“The more you praise and celebrate your life, the more there is in life to celebrate.”
– Oprah Winfrey

3) Dream and Plan for the Long Term. Imagineer your life!

How many people have the opportunity to do this in life? How could such a windfall help you learn new skills, grow and have fun at the same time? Having/ taking time to reflect about life is extremely valuable. We all have different dreams. What is yours?

“A human being always acts, feels and performs in accordance with what he imagines to be true about himself and his environment. For imagination sets the goal ‘picture’ which out automatic mechanism works on. We act, or fail to act, not because of ‘will’, as is so commonly believes, but because of imagination.”
– Maxwell Maltz

4) Invest the Money and let Compounding do its Magic.

Imagine $125,000 invested in equities, growing at an annualized 10% for 20 years: $125,000 could have grown into  $1 million by itself by late 2021!

How to become a Millionaire if you didn’t win the full million at the show?

“The stock market is designed to transfer money from the Active to the Patient.”
– Warren Buffett

Become a successful navigator of the seven capitalistic seas!

Use a GPS and/or read up if needed.

5) Do a Real World MBA

In 2016 Tim Ferriss’ published his book “Tools of Titans”. One chapter is called “How to create a Real-World MBA”. His idea is quite straightforward:  Instead of spending a fortune and a couple of months of your lifetime on a MBA and simply “learning” theoretical stuff in classrooms from reputable PhD theoreticians and professors who use big words and fancy powerpoint slides but never left their campus themselves, you might as well use the same amount of money and start-up a company or create even better and more exciting learning and growing opportunities. Apparently exposing yourself to real-world experiments and experiences shapes you stronger than learning theoretical stuff from books alone. “Tools of Titans”. Great read.

From 2001 onwards I’ve bought time and invested in improving skills of all kind on an ongoing basis. This has not only kept my life interesting and adventurous but also brought me financial returns and lasting contentment later in life.

6) Give back

You can give back and share in many ways. Some people prefer to give money through donations or on a one-off basis. Others prefer to directly share their time and experience. This could be done through volunteering, mentoring/coaching or even with a blog. Ever since my windfall, I’ve done all of the before mentioned. It feels good if you can support and help others!

We make a living by what we get, but we make a life by what we give.
– Winston Churchill

Final Conclusion:

If you are lucky enough to win a windfall: Keep calm and carry on. Celebrate, but don’t splurge. You may not be able to stop time, but you can stop the rat-race and “buy” time. Dream and imagineer your future. Invest in your skills, your passion, life quality, memories and fun. Why? Because it will shape you and your loved ones in ways you could never have imagine before. Dreams are everything – technique can be learnt.

“You cannot advance if you cannot visualize the end from the start.”
– Nabil N. Jamal

What’s your dream? What’s your perfect life? Imagine the perfect day, all the people you’d like to see and have fun with, the passions you’d like to chase as well as all the places you’d like to go. What’s your dream and how do you plan to get there? Writing down your dreams is the first step!

Inspire all of us by leaving a comment below or on Twitter and Facebook.

Leave your comments below or on Twitter and Facebook!
Leave your comments below or on Twitter and Facebook!
Leave your comments below or on Twitter and Facebook!
Leave your comments below or on Twitter and Facebook!

Sweet dreams!
Financial Imagineer

 

Disclaimer:
This blog doesn’t finance itself, please be made aware that the product links used above are affiliate links for which Financial Imagineer might receive a compensation.

The Power of Planning: 8 Life-Changing Ideas to Set Yourself for a Financially Successful 2018

 
Set challenging targets for 2018. Plan to push yourself out of your comfort zone. Try new things, learn new skills, keep pushing yourself forward, change and enrich your mind and your world. Embrace change. Be not afraid to make mistakes. Nothing is perfect from the beginning. Whatever it is, family, love, art, work – life itself. Do something new, something you’re scared of doing. Dare to allow yourself to make mistakes. Only this way can you grow!

To reaching new heights and making dreams work in 2018!

In a life well lived, each succeeding day becomes better than the last. Each day, each year, each experience does not stand alone. It cannot be separated from what has happened before or what may happen later. Yesterday determines today and today helps determine tomorrow. Decide and plan your tomorrow today. Do not stick to business as usual, don’t be a play-it-safer, a creature of the commonplace or a slave of the ordinary.

If you want to have an extraordinary life, you got to get rid of your ordinary one first.

Same procedure as every year James?

If you are aiming for a journey towards financial independence: Dream big, plan ahead and get started. Life is busy. Time flies. Organize your life. No one cares about your success more than you do yourself. And surprise: It’s not all about a budget, saving or investing.

1. Re-Imagineer Your Relationship Infrastructure

Your social environment defines who you become. Did you know that you’ll become the average of the five people you hang out the most with in your life? Therefore: Ensure that you surround yourself with people sharing your vision for financial success!

You become the average of the five people you hang out with.

Do you spend enough time nurturing relationships that matter? Do your current relationships bring you closer to where you want to be? Do you actively reach out and try to connect with people that are already living a life you’d like to live yourself? How do you manage toxic relationships that drag you down? Is the bulk of your current relationships meaningful and enjoyable?

Find five people within your social network that are living the life you dream about, increase engagement with them and learn from and with them. Grow together! Re-imagineer your trusted circle. Engage also in social media online groups such as Choose FI on Facebook.

Your network is your net worth. How do you value your network? Well, if you don’t value it, cultivate it, nurture it, it becomes worthless. If you do value it, it becomes priceless.

If you’re looking for a new start in 2018, this is where to get started!

2. Commit Yourself to Lifelong [Financial] Learning

If you want to grow, you got to keep learning and expose yourself to new experiences. Make expanding your mindset your new habit – embrace ongoing learning. Learn one or two new skills in 2018. This could be anything you believe could add value to your immediate life. Learn how to cook, how to write, how to invest better, how to start a business, anything that brings you forward and closer towards your goals! The most important thing is to get started and keep going so it may become one of your habits.

Make it a habit to read three blog posts a day – http://rockstarfinance.com/ already did the job for your pre-selection by posting the three best personal finance posts every day! Listen to good podcasts on your commute to and from work.

Simply: Create an environment that won’t allow you to escape your new habits anymore. Set yourself up for success.

Jerry Seinfeld has a great way to make new behaviours a sticky habit. Get yourself a big wall calendar and hang it on a prominent wall. For each day you got to do your newly self-assigned task, e.g. to write or to read, take a big marker and make an X over that day. After a couple of days, there will be a chain of Xs on your wall and you will feel a sense of accomplishment. Keep at it and let the chain grow longer. Your only job now is to NOT break the chain! After a couple of weeks you can put the calendar aside as you’d be living your new habit.

Education is the key to unlock the golden door of freedom. Never stop learning, because life never stops teaching. Education, therefore, is a process of current living and not a preparation for future living.

Bonus tip: For myself, I always carry a notebook and pen with me to write down new ideas as they pop up, some people also use online tools such as Evernote. Do this right after you’ve had an inspirational chat, listened to a podcast or finished your three blog posts a day.

Commit yourself to lifelong learning. The most valuable asset you’ll ever have is your mind. Don’t starve it and feed it well.

3. Set A Net-Worth Target

Humans are simple, they usually pay extra attention on what is being measured. Hence, measure financial success, and I assure you will pay attention to it. Start tracking your net-worth, set-up an excel and define a net worth target for you to reach in the next five years, by end of 2018, 2019, 2020, 2021 and 2022.

Goals are simply a dream with a deadline.

What is your current net-worth? Well, you basically add up all your assets and deduct your liabilities. Track the value of your cash, your investment account, your real estate, your business and deduct your loans, your mortgage and any other outstanding liabilities. The resulting balance is your net-worth. Aim to grow it.

When people calculate their net-worth for the first time, some will add their furniture, a car, an impressive DVD collection and assign highly subjective dream valuations to it. Don’t be like these people. Only consider your tangible assets with a objective market value for your net-worth calculation.

Net-worth can be grown by increasing your assets, by decreasing your liabilities or by doing both at the same time. Define by how much you aim to grow your net-worth in 2018 and get started.

Wealth is not money, it’s capacity for quality of life.

4. Activate Your Assets

Look through your list of assets – as in step 3 – and try to find any assets that are currently idle and could be put to work harder in order to help you achieve your net-worth target easier. This could be a large chunk of cash, gold or other unproductive assets, an extra room or two in your home, an extra parking lot, assets in your retirement account not invested efficiently or many other things that I might not have listed in this paragraph.

An asset is something that puts money in your pocket, a liability is something you still got to pay for or that costs you holding it. Hence, you better check if there’s any idle parts in your overall assets that you could activate or reconfigure. Any idle asset that you could activate today will start adding money to your pocket tomorrow and lets you achieve your financial targets earlier and easier.

You got a huge home? Rent out one or two rooms in your home! You got a parking lot but no car? Rent out your parking lot! Reconsider your current retirement account investments and make sure your current assets are put to work in an efficient manner. Many people will be surprised to find potential for further optimization in this area. Activate your assets!

A related area could also be to optimize your debt. Maybe you could pay-off high interest liabilities with lower interest loans and streamline your liabilities part as well. Sometimes I meet people who take up a car-loan but could have borrowed for much cheaper against their home or their portfolio.

In case you like to explore this topic further, you might also enjoy reading my post “Your Gravity Defying Money Bazooka”.

5. Increase your earnings

Are you making as much money as you’d like to? No? No problem: Everything is figureoutable! If you’re not making enough money [yet], then you need to get more creative. The majority of our fellow human beings rely on their salary for a lifetime. That’s not wrong, but it decreases their chance to attain financial independence dramatically. Did you know that the average millionaire has somewhere around seven different sources of income? In case you’d like to earn more money, don’t just focus on your job alone. Explore, dream, discover!

The most helpful tool I’ve come across for this step is Rich Dad Poor Dads Cash Flow Quadrant. The Cash Flow Quadrant is comprised of four quadrants. You might want to view this short video for further clarity before we move on.

E stands for Employee – Human Capital, no leverage

People that “have a job”, they sell their time and are “compensated” with money. Whatever value they create or contribute is absorbed by a company and they are “rewarded” with a salary for their efforts. As you will shortly see, this is unfortunately the poorest quadrant of them all. It offers no leverage and you can’t stop working without loosing your income immediately. Active, linear income with time constraint.

S stands for Self-Employed – Human Capital, no overhead

People in this quadrant “own a job”. They are self-employed and can cut-out paying for expensive offices, bosses or other stakeholders involved in the E quadrant. Hence, they can earn somewhat more money against their time. However, it’s just another version of the “time against money” game since if a self-employed stops working, no income is flowing back to them. Somewhat more money, but still active, linear income with time constraint.

B stands for Business – Human Capital with leverage

People in this quadrant “own a system”, the system allows other people to work with them and hence, they have a leverage component in terms of manpower. The system and its people work for the owner. The key to building a sustainable business system is to have useful, unique and hard to copy products, solutions or services combined with a great branding. Franchise systems can also be considered. In order to be successful, people need to transition from a job-mentality to a business person mindset. They need to learn how to hire and motivate the right people and how to keep all stakeholders involved happy over time. This quadrant is still a rather active one, but offers leverage from the peoples’ as well as the capitals component. Owning and managing a business is more risky than holding or owning a job. Therefore governments around the globe incentivize them with tax benefits people in the E and S quadrant don’t have.

I stands for Investors – Financial Capital with leverage

Last but not least, the investor. The big difference of this quadrant is that investors invest their financial capital instead of their human capital. In other words, they send money to work. This quadrant is therefore the only truly passive income quadrant. The active part comes from choosing the right investment cases and reviewing existing investments once in a while. Investments can be made in businesses, the capital markets as well as in real estate. This quadrant offers you unlimited upside potential but also bears most risks due to the volatility of the markets.

A common way towards Financial Independence is to slowly emerge from the E quadrant towards the S and B quadrants while constantly feeding the I quadrant on the side over time. Don’t just diversify your investments, also diversify your streams of income. Evolve from the E and S quadrants and start unlocking the B and I quadrants for yourself. In case you like it on the safe side: You can still hold your job while taking the first steps into these new fields! Don’t chase seven rabbits until you learn how to catch one.

I would rather earn 1% off a 100 people’s efforts than 100% of my own efforts.
– John D. Rockefeller

6. Multiply your streams of [passive] income

There are different forms of income. In step 5 you’ve seen that there are active and more passive forms of income. You can either sell your time for money or create systems such as a business or investment strategy to provide you with income. Most people start the wealth building process with an active form of income: salary.

Your salary: A nice looking flow of income. What if someone stops or diverts the flow?

Get started on this path and as your active income grows, open up and invest into passive streams of income.

First step: Make a list of all your current streams of income.

Salary
Interest [cash, bonds, mutual funds, ETF]
Dividends [stocks, mutual funds, ETF]
Capital Gains [real estate and capital market investments]
Side-hustle 1
Side-hustle 2
Rental income [apartments, rooms, parking lots]
Business
Any others?

As you look through this list, categorize the income streams into active and passive streams of income. Also make a triage in terms of how much return on investment you could possibly obtain by shifting your focus and/ or more capital into each respective source of income. Now, figure out how much additional resources such as time and savings you could possibly boost every month and define into which income streams you’d be investing your time and money going forward.

As the CEO and CFO of YOU Inc., it’s your job to focus on increasing your passive streams of income, especially where your expected return on investment is the highest. In order to learn more and get your streams of income from more independent sources, try to diversify into several streams of income as long as the administrative effort is manageable.

Imagine: If you’d be a publicly listed stock, would you invest in yourself?

Unlock the power of unstoppable multi-flows of income!

If you don’t find a way to make money while you sleep, you will work until you die.
– Warren Buffett

7. Reduce your expenses

Live below your means. Avoid lifestyle inflation. Do not keep up with the Joneses, rather try to keep up with the Mustachians.

Did you know Warren Buffett is still living in the same home he bought for USD 31,500 back in 1958. He managed to avoid lifestyle creep and smartly reinvested his savings instead of upgrading his residence. Amongst other reasons such as being patient, sticking to his strategy and reinvesting his profits, this allowed him to “early retire at 25” and focus on his true passion: Investing instead of selling stocks. Eventually, this helped him to unlock the magic of compounding interest and lead a happy, self-determined life.

Warren never thought of a $5,000 couch simply as a $5,000 couch. He calculated that $5,000 in today’s dollars multiplied with 7% annual performance over 50 years would represent an opportunity loss of $5,000 x 1.07^50 = $150,000. Now imagine, how much a new car, that expensive dress or a designer bag will actually cost you in tomorrows’ dollars. On top of that, such stuff will all end up as trash.

Warren is smart and successful. Be more like Warren.

Constantly throwing money at new experiences or more stuff is also not a recipe for lasting happiness and contentment. Don’t get me wrong, you don’t have to live like a caveman. But I’m 100% confident almost everyone can cut back their expenses and reinvest the difference in order to snowball their wealth up faster. Economize somewhat, simply spend less on housing, cars, eat out less often, keep your desire to acquire in check and off you go!

8. Pay yourself first – automate your investments

The majority of people simply spend their whole pay-check and only in the rare and special case some cash remains after a month, this might eventually get stashed away. Why not do the opposite and pay yourself first instead? Did you know Mustachianism comes from MUST-STASH!?

“Treat your savings account like just another bill. It has to be paid every month or there are consequences.”

Define how much to stash away every month! Right after you’ve received your pay check, pay yourself first. Best is to have this transfer automated! Stash this cash into your savings or even better investment account. By doing this, you will not be tempted to spending away your saving portion and you will start getting used to making ends meet with whatever amount is left in the bank account after having paid yourself. Another habit is created!

After you paid yourself first – get this surplus invested and make it work for you. Invest whenever your money is ready, invest regularly, best is to have investing automated as well so you don’t have to actively make an investment decision every single month and end up suffering severe decision fatigue. Once you pay yourself first and the investment part is put on auto-pilot, you’re set for a financially successful 2018 and beyond!

Looking for more reading material on these topics?
Click here.

What are your Financial New Year resolutions? What are your net-worth targets? Which skills would you like to build? Leave your comments below or on Twitter and Facebook!

Remember: Failing to plan is planning to fail!

To reaching new heights and making dreams work in 2018!
Financial Imagineer