How Johnny Depp’s Money Mistakes Can Help You

How Johnny Depp’s Money Mistakes Can Help You

Emotional Intelligence often matters more than cognitive intelligence and is a marker of successful integration in society. Followed by how to develop this emotional intelligence to make better decisions with money.)

In June 2009, Forbes magazine named Johnny Depp as the highest paid actor in the world. He’s now facing financial ruin. Earning money and spending money are two different actions. Johnny Depp excels at both of these. The real question is how did he spend $630 million US dollars in 13 years? How could anyone squander this much money in such a short period? But most importantly, why does this happen?

The purpose of this article is to take a look at a famous example of excessive spending, to fully comprehend something that we all face in our daily lives so that we can do something about our spending habits. Don’t think that you and I are unique in our challenges. We may not have Johnny Depp’s financial reach, but we fortunately also don’t have the depth of his money woes.

Money is something that affects us all, every day of our lives. The key is to build up the awareness of what we’re doing with our own money so that we can make better financial choices. Yes, Johnny Depp may spend $630 Million, but there’s little difference between what he does and when we go into a store and pay $20 for a latte that we don’t need.

The Cost of Lifestyle

Johnny Depp has been bold to state that his lifestyle costs about $2 million per month to maintain. While most of us don’t have an issue of this size, we all have different ideas, expectations, and beliefs about our lifestyles. We all have different notions of what we need, want and deserve to have each day.

The cardinal rule of money is simple. Samuel Johnson once said, “Resolve not to be poor: whatever you have, spend less.”
Apply this to your lifestyle and your options.

In his book, Rich Dad, Poor Dad, Robert Kiyosaki stated something simple and quite apparent about the rich:

“The rich don’t live within their means. They find a way of expanding their means.”

In this sense, Johnny Depp has the creativity of the rich. Whenever he’s out of money, in debt or in over his head in financial woes, he can sign a movie contract and take him earning to the next level.

This insight shows one of the two choices available to every one of us:

  1. Live within our means.
  2. Find a way of expanding these means.

To be poor is to live outside of our means. Most of the world today lives in a negative saving cycle. It’s easy to see why. Credit card debt is now big business, as are personal loans and school loans. The great news is that, once you build up your awareness over what you’re doing with your money, you may never fall into the trap of living outside of your means, ever again.

Emotional Decisions – Why we Buy

Advertising is one of the biggest industries in the world today. The average person, from waking up to going to sleep, sees 5000 ads a day, according to Yankelovich, Inc. Does that make you feel overwhelmed? Don’t let it. If we were conscious of even a fraction of this advertising, we’d lose our minds. But most of it only registers on a subconscious basis.

Our senses are bombarded with advertising from every angle, and in today’s world, we’ve become masters of ignoring most of it. Of these 5000 ads a day, only a small portion penetrate our field of awareness and reach us. These are the brands that we connect with or the stories that we relate to. The better the story, the stronger the brand affiliation we have, the more we become emotionally invested in what the advert we’re experiencing.

And this is where the problem lies. These brands hold power to our pockets. They keep the keys to our buying decisions. Our emotions override our rational, logical thinking processes. We buy quick thrills and fill voids with products and services. We buy things that look appear to be bargains but could be dud deals that are cleverly framed. At the core of it, we buy love, and we purchase belonging.

Think about the last time you bought something without even considering the price. What was the reason behind it? What was the story you told yourself? Great brands have a way of cutting through our walls and telling us a story that we want to be a part of.

Nike tells us to man up and “Just do it.”

M.A.C. Cosmetics welcomes us into a family with the bold statement of “All ages. All races. All sexes.”

Emotionally, a powerful brand will make us a part of something more significant, something that we want to belong to. This is where our emotions are at their peak. The problem is that, sometimes, these decisions place us living outside of our means. Like Johnny Depp and his passion for collecting wine, our emotions are what makes us human.

The thrill of conscious experience is what defines human living. We’ll never remember the time we opted to save money and have a quiet night in, over the unforgettable dinner we had with our friends. However, it’s all about balance, moderation and being in control. Our emotions are meant to enhance our lives, not dictate our behaviors.

So, how do we deal with this Achilles’ heel, if we have it? Here are the action steps you can implement in your own life to overcome this problem and have a healthy relationship with spending.

Action Steps – Mastering Your Spending Habits

Remember, none of this is pretty, but is it necessary? Definitely. And it all starts with understanding where you stand financially.

Step 1: Know Your Numbers

How much do you earn? Is this number fixed? How much do you spend each month? When you can measure your quantities, you’re ready to change them. This first step may be the most daunting, but in the long run, debt-free living is liberating. One day, you will thank yourself for measuring your finances.

Step 2: Build Your Budget

Once you have your numbers in place, start allocating your money in various ways. If you’re the kind of person that loves spending money, allocate space in your budget for this. If you’re the kind of person that loves saving, allocate money for saving and investing. Your budget should enable you to be a well-rounded person, a person who gives to charity, looks after themselves in the short term, as well as long term and also pays bills on time.

Step 3: Stick to your Plan

Once you have a budget, the real test is whether or not you can stick to it. Yes, there will be times where you will want to talk yourself into buying things you think you need. Sticking to your budget is hard, but it gets easier every time you stick with it. It’s kind of like a muscle that you’re developing.

Step 4: Expand your Means

Regardless of who we are, one day we will look at our budgets and realize that they’re not enough. This is the time when we need to start thinking bigger. What is it that you can do to earn more income? How could you make your current income work harder for you? How can you serve more people? These are all great questions to ignite your thinking on how you can expand your income.

No one is perfect. We have emotions, and we develop habits. The real question is this, what are we willing to do about it, today? Because this decision is the one that determines our future. This is the only decision that we have complete control over.

 

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