In your opinion, is money poison?

Over the years, I have met hundreds of people, women, and families from various sectors, diverse socioeconomic backgrounds, and different locations. An approach that recurred among many families, regardless of their financial situation, was the belief that money is a type of poison and should be removed from our lives.

Of course, the same families didn't say that. Most of them would have wanted more money, but in practice that's exactly how they behaved. Examine yourselves, do you want to get rid of your money? You most likely answered no. Perhaps some of you answered, I don't have money. But let's examine not only what you say, but also how you act.

Let's say I were to give you a check for 50,000 shekels right now. What would you do with it? Answer honestly. Maybe you should write it down on paper.

If you answered something like, "I would buy X," "I would renovate Y," or "go on vacation Z," or worst of all, "I would pay off my debt C," you are precisely the kind of people who think money is toxic and must be gotten rid of as soon as it enters the account. My guess is you are probably not in a strong financial position. You might have a big house, an expensive car (or two), and children in many extracurricular activities, but I'm guessing you are not financially stable. You fund your high standard of living with high current expenses, but what will happen if, for some reason, you can't work for three months? What will happen if you can't work for a year?

The poor buy, the rich invest.

And it has nothing to do with your income level! Assuming your basic needs were already met before you received the 50,000, your reaction to this unexpected money is what will determine whether, in the future, you’ll still be preoccupied with survival, figuring out how to "make ends meet," and other similar unpleasant thoughts. If, on the other hand, you invested the money, you know that it will gradually grow. 50,000 could become 55,000 by the end of the year, and 60,500 by the end of the following year, and so on. With 100,000 in 2003, I purchased an apartment worth 400,000 shekels, which is worth over 2 million today. Most of our investments in life will not yield a return of over 19% per year like this one. But if, as a young man, I had chosen to take the 100,000 shekels and use them to buy a car or go on vacation, today I would have 2 million shekels less in the actual scenario, or about 300,000 shekels less with a return of ("only") 71% per year. If my monthly expenses are 15,000 shekels, then 300,000 shekels would allow me to go nearly two years without working and without compromising my standard of living. A family that can survive two years without working is a financially stable family.

Those same poor people (as mentioned, even if your net income is 40,000 per month, in my eyes you are poor if your assets minus liabilities calculation yields a number close to zero or if a month without work would cause you to feel oxygen-deprived and economically insecure) for whom any amount of money immediately creates a desire to consume certain products or services feel that they are acting with economic wisdom if they purchased a certain product at a discount or on sale. You will often hear them say things like, "On Black Friday, I bought an 80-inch TV for 5,000 shekels." Their friends will pat them on the back and reply – "Not money"Generally, I hear the expression "no money" more from people who lack money. But buying an unneeded product, regardless of the amount, is a bad financial decision. The separation between "needed" and "wanted" is what will determine whether you progress financially or not.

To see where it's worthwhile to invest for returns, I recommend reading the previous article on the topic – Your first investment in the stock market.

What is your stance on wealthy people?

Association Sparks Here is a nonprofit organization that brings people from various fields to volunteer lectures in schools. A year ago, I conducted a financial growth workshop as part of the organization for 8th graders from Petah Tikva. During one of the sessions, I asked the children what they thought about rich people and began writing on the board what the children said about the wealthy: stingy, calculating, greedy, tax evaders, stealing from the weak, and so on. After that, I asked the children, 'Who wants to be rich?" All the children raised their hands. I asked them to keep their hands up and look at the definitions they had given just a minute before for rich people: stingy, calculating, greedy, etc. I told them that if they don't change their approach, they have no chance of becoming rich because their subconscious will block them from being part of a group about which they think so many bad things. I invited them to look at life differently. The fact is that in many public buildings, such as hospitals, museums, and even the activity I just did with them, in the end, those who donated so it could happen are people with money whom they decided to share with others. So perhaps wealthy people are just like other people? Some of them are stingy and some are generous? Some are calculating and some are as straight as an arrow?

Check what you think about the group you want to join. This may be one of the determinants of your chances of being included in this group.

I would be happy to read your responses below, or directly to my phone at 054-5232-799, or to the email rimon@effm.co.il.

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