Ten Lessons Learned From “THE MILLIONAIRE NEXT DOOR”

  1. This is an email I recieved today and I thought I'd share, since we're all into the spendy-spendy when it comes to our bags! I think "The millionaire next door" is a book :flowers: (but not sure, don't shoot me :biggrin:)

    Lesson #1:

    Most millionaires do not buy high-priced footwear. About half had never spent $140 or more on a pair of shoes.

    Lesson #2:

    Most millionaires have never spent more than $235 for a wristwatch. About one in ten never
    spent more than $47, while about one in four spent $100 or less.

    Lesson #3:

    The millionaire buys the house in the affluent area after he/she became wealthy. Maybe
    you aren’t as wealthy as you should be because you traded much of your current and future income just
    for the privilege of living in a home in a high status neighborhood.

    Lesson #4:

    They live below their means. Living in a less costly area can enable you to spend less and to invest more of your income.

    Lesson #5:

    Operating a household without a budget is akin to operating a business without a plan, without goals,
    and without direction. The foundation of wealth accumulation is budgeting and planning.

    Lesson #6:

    You aren’t what you drive! They believe that financial independence is more important than
    displaying high social status. Most millionaires never in their lifetimes spent near $65,000 for an
    automobile. Nearly half never spent more than $30,000. That’s why they’re millionaires!

    Lesson #7:

    Both Sears and JC Penney's cards are significantly more popular among the wealthy than the cards of
    status retailers.

    Lesson #8:

    Allocating time and money in the pursuit of looking superior often has a predictable outcome: inferior
    economic achievement.

    Lesson #9:

    Not only are the most prodigious accumulators of wealth frugal, their spouses tend to be even more
    frugal. Most people will never become wealthy in one generation if they are married to people who are
    wasteful. A couple cannot accumulate wealth if one of its members is a hyper-consumer.

    Lesson #10

    There is an inverse relationship between the time spent purchasing luxury items such as cars and
    clothes and the time spent planning one’s financial future. Millionaires pay themselves first, investing a minimum of 15 percent of their annual realized income before they pay the sellers of food, clothes, homes, credit, and the like.

    Appearing rich isn't chic - being financial stable, having some money in the bank, affording the lifestyle you
    crave, and having the strength to save is Tres Chic!
  2. how boring. money is meant to be spent
    i think the rules are bs.or at least only for people whose one and only goal is to have a milion $ in the accounts no matter what they have to give up for it :rolleyes:
  3. I find this very interesting and perhaps true. My boss makes a lot of money. However, his house is very modest, located in a nice middle-class neighbourhood. He invests almost all of the $$ he makes in securities. Seriously, if I didn't know him, I wouldn't have guessed how much money he has. He's just so modest. I think that's what I respect most about him though :amuse:
  4. I believe there's a middle ground between fiscal anorexia (as I call it) and overconsumption. IMO, if you're saving money and not going into debt, you can pick and choose your luxuries.

  5. Very nicely said!:yes::yes:
  6. How does one define "millionaire?" Having a million dollars in assets to your name? In California that means practically nothing. A million dollars won't even buy you a starter home in the mid-range suburbs.

    The only one I see that's been obvious to me is the car situation! You definitely are not what you drive!
  7. Most millionaires only have between $1-2 million and that INCLUDES their house (the part already paid off from their mortgage), so of course the advice is skewed towards the actions/lifestyle of those millionaires who really cannot afford to splurge constantly. Over 1% of the US population are millionaires ... but most cannot afford to live like millionaires used to be able to.

    (That's the criteria the book uses.)

    Yes, most people in LA are millionaires!

    Regardless, there is good advice. Always live below your means and you'll never have money problems.
  8. You said what I was trying to say very nicely! Agreed, Sonya.
  9. Actually a lot of this makes sense. I've read this before and it has appeared in another form in some marketing books.

    You really do have to save money for the future. (unfortunately, I, myself, have little saved). But paying yourself first is excellent advise. Putting even $5.00 away a week in a savings account will add up.

    Thankfully my husband has a lot taken out of his check for annuities, thrift savings plans, life insurance, and even savings bonds. I have a small pension from when I worked full time. Social security cannot be counted on in the future. And at best, it is to be a supplement to retirement income.

    I won't be a millionaire, but I will be able to live comfortably and send my children to college - without loans.

    I don't think anyone really wants to be working when they are 75. I know I don't.
  10. It would be interesting to see how this was broken up in age range, in other words the spending of the 60-75 yr old might be different than the 35-45 age range...
  11. Sage advice.
  12. as i was reading this i was like "well damn, why aren't we millionaires then?" we do and plan for all those things.

    then i got to number nine:
    wasteful hyper consumer? ouch. but yeah. that would be me. :smile:
  13. Yes but this book mainly researches the spending habits of small business owners who become millionaires (the biggest group was drycleaning shop owners) and then also points out alot of high income earners, i.e. doctors and lawyers, won't ever be millionaires because they spend so much of their income. Frankly, I think the book had some ridiculous points i.e. clip coupons and buy all your clothes from JC Penny. Blah, boring and completely ineffectual without a high income or some dramatic asset appreciation to go with it.
  14. oh and by the way. i am not the girl next door so what the heck should i do with the millionaire next door?
  15. :roflmfao: :roflmfao: :roflmfao:

    No sweetie, you certainly are not! I don't think anyone would suggest otherwise!