A young lawyer had $1.5 million and spent it on a car, house, and furniture. The car dropped to $30,000, the house lost $300,000, and the furniture became nearly worthless. That money in an S&P index fund would be worth over $7 million today.
Years ago, when I was a young and foolish lawyer, found myself at the end of one year with $1.5 million cash in the bank. Instead of investing that money, I went out and blew through it. Paid cash for a $100,000 car, bought a million-dollar house. I bought all new furniture for the million-dollar house. 4 years later, that car was worth $30,000. The house had lost $300,000 in value, and the furniture was worth about 10% of what I paid for it. Instead of flushing that money down the drain, if I had invested it very simply, something as easy as an S&P index fund, that $1.5 million would be worth over $7 million today. This is a cautionary tale.
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