PASSING THE TEST OF WEALTH

The test of wealth is one of the most difficult, if not the most difficult, challenges when it comes to mastering money. Recent studies show that most inheritances are lost by the third or fourth generation, and lottery winners tend to go bankrupt within a few years.

Even if someone has strong financial training, they can still squander their blessings by making poor decisions.

One simple way to prepare yourself for passing the test of wealth is to practice your skill of capacity. Like physical exercise, anyone can build capacity using simple exercises that develop their wealth muscles.

Strong wealth muscles produce what I call capacity. Capacity is your ability to carry sudden sums of money and not squander it with poor choices. Those with high capacity can manage ever-increasing wealth and pass it on to future generations. Those with poor capacity squander their wealth within a few years or even months.

One simple exercise I use often to teach my students capacity is the $20 prisoner test. In this test, clients take prisoner a $20 bill in their wallet and keep it there for 30 days. They’re not allowed to spend it on groceries, gas, or rent; they can’t give it away or store it in savings either. Their job is to simply demonstrate their mastery over money by holding it prisoner for 30 days. On day 31, they can either decide to spend the $20, save it, or give it away. Because they have exercised their will over money, they have earned their right to choose how to use it.

This exercise might seem simple, but the lesson learned is profound. The more you train yourself to hold onto money and resist impulse decisions, the more likely you will be able to handle large amounts of wealth when it comes in. The next time you receive a blessing, consider this $20 prisoner test. Recognize this as an opportunity to grow and expand your wealth, not to detract or reduce it through impulse spending.