178. How To Lose Millions By Having A “Great Idea”

A big money moment can be the start of freedom or the start of a slow slide back to square one. We sit with the central idea from Morgan Housel’s The Psychology of Money: getting wealthy and staying wealthy are two different skills, and most people only practise the first one. A business sale, an inheritance, a market win, or a lucky property deal can create a windfall fast, but without a plan it is easy to pour everything into the next venture and wake up years later with nothing to show for it. 

We talk through the “many versions of you” that financial planning needs to protect: the you that earns, the you that retires, the you that may get sick, and the you that faces unexpected curveballs. That’s why we keep coming back to simple wealth management basics like locking away a portion for long-term compounding (think retirement annuity or a disciplined investment strategy), keeping an emergency buffer, and making sure your future self isn’t forced to carry today’s risks. 

Our practical framework is the five ways of spending: giving, spending, keeping, saving, and growing. It helps you enjoy life now while still building resilience, funding future opportunities, and protecting what matters. We also share Warren Buffett-style principles for staying wealthy: be careful with debt, don’t panic-sell during recessions, protect your reputation, don’t get stuck on one trend, and avoid relying on other people’s money. 

If you found this useful, subscribe, share it with a friend who just had a windfall, and leave a review so more people can learn how to build wealth and keep it.

Transcript

Welcome And Book Series Setup

SPEAKER_01 0:12

Hello everybody. Welcome to Know Your Money. I'm Bron Man Weiner.

SPEAKER_00 0:16

And I'm Craig Finch, and we are from Growth Financial Planning. We hope you enjoy our podcast.

SPEAKER_02 0:22

Craig, hello.

SPEAKER_00 0:23

Bron, how are you today?

SPEAKER_02 0:25

Good thanks. And you?

SPEAKER_00 0:26

All good, thank you.

SPEAKER_02 0:27

Back to The Psychology of Money by Morgan Housel. And like we've said in previous episodes, we're doing a series on the chapters that he's written. But it is such a powerful book. I encourage anyone that's even just alive to get the book. You know, you don't even have to be thinking about investing.

SPEAKER_00 0:46

That book's been read a few times. You've got little scruffy there on the table.

SPEAKER_02 0:52

Definitely. Just because it has so many beautiful messages and it's not, it's more stories than it is do this, do that. Which is also quite nice because we can relate to stories a lot easier.

SPEAKER_00 1:05

Yes.

Getting Wealthy Versus Staying Wealthy

SPEAKER_02 1:06

The chapter we're on today is getting wealthy versus staying wealthy.

SPEAKER_00 1:11

Okay.

SPEAKER_02 1:12

Have you experienced that or have known of people that have had that?

SPEAKER_00 1:17

A few. And uh I think I'm yeah, so I'm very aw a wary of somebody who sells a business. Sells I I've got other people sell property and have made a a fortune out of selling them. Um when they bought a piece of land, and and and property for me is often not a great investment, but there have been the odd person I know that bought and then suddenly there's been a big development come their way and they've sold the property and they got the money. Sometimes they sell the property, they don't get the money. That's more more common that does happen. But this one person got the money and a whole chunk of money, and then did something silly with the money instead of saying put some of it away. Another person I know made a fortune of money on the stock market, listed a company, and I just said let's lock away some of that money in a very boring product like a retirement annuity. This person was only 40 years old. And I said, let's lock it away for 25 years, and I just said 10% of your wealth, and you'll never you don't see it for for until you're 65 and it'll it'll do its own work, compounding, etc., with a good manager. And no, they didn't do that. And then then they went, took all that money and they put it on another venture, and eventually they back actually at 65 now that I think about it, still working. Yeah, which is crazy. So all I'm saying is that when you get a windfall, you must invest some money that you can't touch it for whatever reason, because often those people are entrepreneurial thinkers, and any great idea will come their way and they'll back the whole house on that idea. Yeah. And I'm just saying, you put that money away, some of it lock it away, that you can't even touch it until you need it later in life. So that's I've had those experiences.

Planning For Many Versions Of You

SPEAKER_02 3:20

And I think that aligns with like what we're trying to say in our way of doing financial planning, is there are a lot of versions of you that exist. There's a version of you that makes money, there's a version of you that is gonna retire one day, there's a version of you that might get sick. When you're doing something, you have to factor all those versions of you in and not just see the healthy one. You know, I was thinking about Michael Schumacher the other day. I mean, what an amazing guy. And like now he went skiing.

SPEAKER_00 3:53

I know. You know with a helmet, he was did everything right. Said.

SPEAKER_02 3:57

And his whole life changed, and and life can throw us these curveballs, and you just want to be prepared for it because sometimes getting wealthy is easy. Maybe you buy the lottery ticket and you get all of this money. Maybe something happens to you and you get a payout or an inheritance. It doesn't always have to be work. But I think if you look at our wheel of wealth, there are ways of getting wealthy, which is receiving money from others or different things and earning money. And you can do active earning, passive earning, owning properties, all of those

The Five Ways Of Spending

SPEAKER_02 4:35

different things. But you should have a balance of both in a way, or of all of them: active earning, passive earning, receiving from others, inheritance, those kind of plannings. But when it comes to keeping your wealth or staying wealthy, you have to factor in those other relationships, which we've defined as giving, spending, keeping, saving, and growing. If you make all of this money and you just go spend it buying this house, buying a new business venture, you luck might not always be on your side. Risk might be on the other side of that, and then you've lost everything. Are you keeping stuff aside for emergencies and those sort of things? And I think the strategy to staying wealthy is those five ways of spending every single time you have money. Like you said, that person that made those millions from selling, a portion should have gone into growing for that 65-year-old version of them, no matter what. There should have been a portion that goes to savings for the next business venture. There should have been a portion that they're keeping aside for what if I do get sick? What if something happens to my kids? Giving, because I feel like when we do make money, we do want to give or people do need from us. But if you can lock aside a portion, you can manage that. And then actually spending and enjoying, because life is about enjoying and having it all.

Warren Buffett Rules For Staying Wealthy

SPEAKER_02 6:11

So one of the things that is in Morgan Housel's book is about Warren Buffett and his trick to how he stayed wealthy. So our expression is the five ways of spending. But his is don't get carried away with debt. So, like you want to go invest in another business.

SPEAKER_00 6:34

First be debt free or get close or balance it as well. You can't just do that first.

SPEAKER_02 6:40

Absolutely. So um, you know, aim for debt-free, but don't go into debt completely for your next goal.

SPEAKER_00 6:48

Correct.

SPEAKER_02 6:49

And this is a big one, I think, is don't panic and sell during recessions, which I think a lot of people do, and we've said this in a few of the other episodes. Just let the market sleep. Next is don't damage your business reputation. I think that that is really important. Your reputation's everything. Don't attach to one view, strategy, or trend. Don't rely on other people's money. Don't burn out, quit, or retire. And those are his sort of values and philosophies that he follows.

SPEAKER_00 7:24

Or your reputation, I think, is very important. So don't do something that you that skates against the law or something that'll make somebody look at you in a f in a bad light. Make sure you whichever you do every day is the right thing to do. Do the right thing every day. And just be kind to people around you. So that's very important.

SPEAKER_02 7:45

Yeah, and make sure you can sleep well at night.

SPEAKER_00 7:47

Yeah, exactly.

SPEAKER_02 7:48

Right. Awesome.

Closing Thoughts And How To Subscribe

SPEAKER_02 7:49

So let's hope everyone listening gets wealthy and stays wealthy. Thank you so much.

SPEAKER_00 7:55

Thanks, Brian. Cheers. Bye. Thank you for listening. If you have enjoyed this podcast, would like to subscribe, please visit our website www.growth.co.za. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial association with a financial planner.