[pontifier]

I totally had this happen. When I was growing up we didn't have much money, and I've always tried to be really frugal. I tend to agonize over minor necessary expenses like gloves or shoes. When I went from a couple hundred bucks in the bank to almost a million I felt strange. I tried to ignore those feelings, so I could live like a normal person. It only took me about a year to...

I mean... Well... It goes pretty fast and things are pretty much back to the way things were.

I did not understand at all how people who win the lottery could blow through it all so quickly. Growing up, the limit on my spending was availability. When that availability went up, I didn't really have the right tools to change my internal spending algorithm quickly enough to maintain a comfortable level for a longer time.

It truly didn't fix as many problems as I had hoped, and it turns out a million dollars isn't nearly as much as I thought it was.

[nostrademons]

It's possible to avoid this by having separate buckets for consumption and savings. Hold your consumption bucket constant (some people call this "budgeting", but it could be done more informally), and all the excess cash you're making, by definition, will go into investments. Then you just have to learn how to invest prudently. :-)

GP is talking about the investment side of this, where "investing prudently" usually means looking at the relative prices of different investments and putting your money only into the ones that are undervalued. If enough people do this, a.) relative prices approach a pretty good approximation of their true value, and b.) those prices are going to be much higher when a lot of cash went into savings than if there's not much cash going into savings.

[pontifier]

Oh I invested most of it, and now I don't have all that cash anymore. I have assets instead. I'm back where I can worry about spending a few bucks on something minor.