I haven’t done a scientific analysis of these money decisions.  However, my gut tells me that about eighty percent of the people made average decisions with their money.

When it comes to money, the biggest decision one makes is how they choose to earn money.

The biggest source of income anyone receives comes from their job or business.  For most business owners, their business is their job.

Many people think it would be great to receive an inheritance that would make it so they could live on easy street.

The chances of getting life-changing money from an inheritance are almost zilch.

Charles Schwab, the investment company, released a report indicating there were 9.4 million households that have a net worth from $1 million to $5 million.

There are currently 327.2 million people that live in America.

Let’s assume that when the 9.4 million people die, they pass the bulk of their money on to two children.

For this discussion, I’m going to assume that the average amount of wealth of the 9.4 million households is $2.5 million.

That means each of the two children of the 9.4 million households would get $1.25 million.

Each child would technically become a millionaire at the passing of their parents.

How long would the $1.25 million last?

The answer is it depends on much money is spent.

The median yearly income of an American household is around $60,000.

Let’s say each of the new millionaire children decides to quit working and just live on their newfound wealth.

Assuming the millionaire children maintained their $60,000 standard of living, that $1.25 million will be gone in 20 years.

If the new millionaires spend $100,000 a year the $1.25 million will be gone I about 12 years.

Seriously, let’s think about this for a moment.

Recently I found a $20 bill in a pocket of my jeans.  On that day I had a windfall of money.

That $20 in my jeans pocket was found money.

Did I invest the money in stock and bond?

Of course not.  I went out to lunch and had some sushi.  I blew through my found money.

And that is what most people do.

For most people, an inheritance is found money.

If I splurged through a relatively small amount of money and I have more knowledge about how money works than most Americans, what is the likelihood that someone who is ignorant about money is going to be wise with their newfound wealth?

Zilch. Zero Point Zero.

People who get a huge windfall of money is going to splurge somewhat.  They’re going to buy a car.  They may pay off their mortgage if they have a mortgage.

If they’re renting a house, they will probably buy a house.  They’ll go on a fancy vacation.

I am willing to make a wager that the average American would spend at least 10% of the $1.25 million in the first year after they receive their inheritance.

A whopping $125,000 would be spent just like that within one year of receiving the inheritance.  Probably more.

Then here comes Ugly Cousin Joe who lost a tooth wrestling a three-legged pig.  Ugly Cousin Joe wants a piece of the inheritance pie.

Ugly Cousin Joe comes with a sob story about how he lost a tooth.  Now he needs oral reconstructive surgery because now every time he uses the letter S, an ear-piercing whistle comes out of his mouth.

The only thing that changes in people’s lives when they receive money from an inheritance is the amount of cash they have in their bank account.

If the new children millionaires were bad with money before they received their inheritance, 99% of them will be bad with their money after they receive their inheritance.

If the new children millionaires were good with money before they received their inheritance, 99% of them will be good with money after they receive their inheritance.

People typically do not change because of an external circumstance.

People only change from the inside out.  People have to look deep into what they are doing to receive certain results.

Change is an inside job.  Always has been.  Always will be.

Here’s an even more important number to keep in mind.

The 9.4 million households only have enough wealth to help about five percent of the rest of America.

That means 95% of Americans have zero chance of receiving a life-changing inheritance.

Those are not good odds for most Americans.

In my work over the last ten years, I’ve been privy to circumstances where some of my clients have received large sums of money through an inheritance.

There was one case in particular where a person was named majority heir to the deceased estate.

The other heirs of the estate got upset because they didn’t like the first person.  Lawyers got involved.

After the legal issues were settled, several hundred dollars were spent on attorney fees to defend the heir’s interest.

The money was one thing.  However, the emotional toll and stress this person went through is something I would not have even wished on my worst enemy.

These experiences have led me to form an opinion.

There’s nothing like an inheritance to piss people off.

It’s sickening. It’s only money.

And yet it’s not.

There’s always a lot of pain when someone we love dies.  I’ve lost several loved ones in my lives, and the hole it left in my heart was at times devastating.

I think as people go through the grieving process, they try and grasp at anything they can to hold on to the recently departed.

A lot of times that something can be a teapot or it could be a large sum of money.  It could be many things.

And then there are the family dynamics of someone being favored or someone being the black sheep of the family.

People make decisions while grieving that they wouldn’t otherwise make.

So maybe it’s a good thing that less than 5% of people in America will receive a life-changing inheritance.

After all, it’s not the money that makes people happy.  It’s the journey and the things that people do to get the money that makes people happy.

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