Making money is not that easy. You need to work 8 hours a day for a full month to get your monthly salary. However, spending that money is quite easy. If you want, you can easily spend all your money from your salary within one day, if your purchases are extravagant enough. There are quite a lot of instances of lottery winners going broke within a few years of getting the money. According to statistics from the National Endowment for Financial Education, 70% of lottery winners end up broke and a third go on to declare bankruptcy. Here are a few of the dumbest ways to go broke.
Buying things to impress others
When you get obsessed with buying fancy things just for the sake of gaining admiration from other people, you are wasting your money. Whenever people see a supercar on the street, they start praising the car for its beauty and elegance, but not the person who purchased the car. Whenever you buy expensive gadgets and show them to your friends, they start admiring the expensive things, but not you. So buying things to impress others to the point where you have no money left in your bank account is certainly a dumb way to go broke.
Investing in things you don't understand
When you invest in a new asset or cryptocurrency just because it is in trend, you don't understand the amount of risk that you are taking. When you invest a lot of your money into something just because it is in the hype, you could lose all of your invested amounts if the price of that asset ever crashes.
Gambling and trying to get rich quick
Some people keep gambling all their money in hopes of a big win until all their money gets finished. Whenever we lose a particular bet, we tend to bet on more money in a hope that we win on our next bet. However, those with bad luck, keep on betting and losing until they can't afford to bet anymore.
Buying things that harm your health
Some people spend all the money on their addictions like drugs and alcohol. Whenever an addicted person gets a lot of money, it would be a smarter decision for them to use their money on getting rid of their addictions rather than using that money to abuse more substances.