2:20 pm , by
We recently wrote about our mindsets that determine whether we are living within your means or not. Income is really not as important as the mindset. Recently I came across an article which illustrates my point very well. The UK’s Independent newspaper ran an article “Extraordinary details of the Queen’s finances revealed.” Apparently the Queen needs US$12 million per year in living expenses. That is a cool $1 million per month. Now, the British may have a good reason to pay that much money to have the Queen and her Royal Family stick around. For one, I think they like tradition and they are probably getting a pretty good return on this investment, since tons of tourists flock to Buckingham Palace, to Windsor Castle, and to who knows what other royal sites in the UK. But the Queen seems to be struggling with her “paltry” income.
How come the queen can’t live on $1 million a month? You get the answer, or at least part of it, when you read the article. She grants a few freebies to some people like the “Keeper of the Privy Purse”, who is living rent free in one of the palaces. (I wonder how do you get this job.) This forgone rental income on prime real estate has got to amount to a pretty penny. The Queen also has high expenses like her energy bill. I can imagine that it costs a ton of money to heat all these rooms with their high ceilings in the various palaces. You need a bunch of light fixtures to light up these big rooms, too. So, the Queen had her energy bill lowered, which saves her $215,000 in two years. Imagine! These are just the savings she gets on her energy bill!
I am sure if the Queen was awarded $2 million a month to make ends meet, she would find a way to spend that “extra” $1 million a month. I doubt that she will save $500,000 per month or even $100,000 if she had her income doubled. But she can’t do much about it. What choice does she really have? She’s got to live like a queen, right?
Her fixed expenses have got to be very high. We already know that her energy bill is high. Now think about the furniture polish, the amount of Windex, the mopping soap, etc. Every little thing that does not cost very much in our households have got to amount to some serious money in her place. And this is exactly what happens to most people when they make more money. Their houses get bigger, their cars get bigger, their wardrobes get bigger, etc. Having all these bigger things means that their monthly heating and cleaning bills get bigger, their gas bills and car service bills get bigger, their dry cleaning bills get bigger, etc.
We may think that more income solves our money problem, but more income may very well create more and bigger money problems. Unless you have the right mindset, even $1 million a month can leave you struggling!