THE MILLIONAIRE NEXT DOOR
Author: Thomas J. Stanley
RATING: 9.0 out of 10
OVERVIEW: The truth about the lifestyle and spending habits of Millionaires. The book corrects the false pre-conceived notions that television portrays about how the rich live and how they became millionaires.
Millionaires are greedy, non-compassionate, business moguls, heirs to the rich, and lavishly live the celebrity lifestyle, right? They buy the nicest clothes, sports cars, eat caviar, and travel the world often, right? Wrong, you couldn’t be more off, at least according to Thomas J. Stanley, the author of The Millionaire Next Door. He’s taken empirical data from surveys given to hundreds of Millionaires around the country to give us a new glimpse of Millionaires.
I’m typically an optimist in my views of all negatively stereotyped parties, but even before this book my views of Millionaires were somewhat downbeat. The Millionaire Next Door shed some light on the true lifestyle of Millionaires. First, 8 out of 10 Millionaires are first-generation Millionaires. In other words 80% of Millionaires were not born wealthy; they built their wealth from the ground up. Second, the rich are typically more frugal than the middle class. You don’t believe me? See my notes below.
INTERESTING FACT: Many doctors are highly in debt/broke. Academic education has no correlation to financial education. Learn 2 Budget!
One incredible observation I learned is that those who say they’re rich or buy like they’re rich, are more often broke than they are wealthy. The next time you see someone pull up in a luxurious Escalade, it is a better chance that person is in debt and not wealthy. The rich avoid debt like the plague! They typically buy affordable cars and large ticket items with SAVED cash. Most wealthy individuals had those habits before they became rich. Most rich people could live next door to you and you would never know it. They don’t flaunt their money or lifestyle. They most definitely avoid taking advice from the broke, who buy things to appear rich.
This book will change your views of Millionaires forever! Not only will it teach you about Millionaires but give you an idea how to live your life so you can avoid being broke, living pay check to pay check. My notes below will give you good insight to real Millionaires and not “TV Millionaires.” Enjoy this book!
•Wealth isn’t how much you make, its how much you keep
•2/3 of millionaires are self employed
•80% of millionaires are first generation
•10% have ever bought a suit over $400
•Few have bought shoes or watches over $200
· •Future and current Millionaires don’t lease cars they buy affordable cars with cash
· •Don’t buy a car you can afford MONTHLY, but a car you can afford with CASH.
•Despite general belief the wealthy aren’t generally high consumers
•You don’t see many overweight joggers because those who jog become skinny. Same reason why the rich should budget and poor don’t.
•**Don’t buy a home that is more than double your gross annual household income
•Don’t go to a mortgage broker to see how much home you can afford!
•People expect high income will make you wealthy. Budgets, or spending less than you make, create wealth more effectively than high income.
•Wealth comes from separating expenses and income as far away from each other as possible.
•Gifts can become bills. Like George Costanza when he received free super bowl tickets. If you get a free nice rug you know have to furnish the whole room to match.
•Teaching your children how to earn money is much greater gift than cash
•Plan your work, and then work your plan
***Don’t chase money. If you’re the best in your field the money will find you
*** Just because you have Air Jordans does not mean you can play in the NBA. Just because you’re in a certain industry, title, opportunity, etc. does not guarantee wealth. It takes daily effort to realize a dream.
•Millionaires are frugal, frugal, frugal
•They can take your business but they can’t take your intellect
•A budget is telling your money where to go instead of wondering where it went
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