‘The Millionaire Next Door’ is taken from the title of a book by Thomas Stanley. In it, he shows that many millionaires don’t live a flashy lifestyle – in other words, they could be your neighbors and you wouldn’t know it.
In his other book ‘The Millionaire Mind’, he goes on to explore the attitudes that make up these ‘secret’ millionaires. His results make for interesting reading, especially if you want to learn how to handle income better by seeing how others successfully do so.
The focus of the book is on what attitudes contributed and helped them in the goal of getting a comfortable lifestyle. Note I didn’t say ‘become a millionaire’ – ultimately, many respondents just wanted to have a secure and safe lifestyle for themselves, and money was the key to it, not the goal itself. One-third of the respondents were self-employed (32%), proving that your own business is a proven method to attaining financial security. Other categories covered senior executive positions, and professionals like lawyers and doctors, but for those of us without the requisite education, the results for the self-employed group are most interesting.
For instance, intelligence is not as significant a factor as we might believe. Over half the respondents who attended college had an average grade of C. In fact, 72% of the low scorers said that what they actually came away with from school was a desire to fight for goals, because people labeled them average or less competent.
Another survey asked about success factors in attaining their goals. 92% of all business owners felt that being honest with all people was important or very important (surprisingly, 87% of the lawyers also felt this way). As well, 85% felt a supportive spouse, and 37% felt a strong religious faith, was important or very important to their business success. The idea of the hard-living, twice-divorced middle-aged millionaire is at odds with these statistics, but they help show that money can be balanced properly, and wealth isn’t necessarily a prescription for unhappiness.
Survey results about money and spending were likewise interesting. For instance, many of them avoid the self-help route. Especially in the case of lawyers, time is money, and few want to waste time on a leaky faucet or roof when that same time can make them money. They are also ‘total-cost’ aware: the initial cost is not always the final cost.
For instance, a professional often supplies a warranty, and the quality of the work done is often better than an amateur could do. Additionally, if he has any accidents on the job, he is covered – but what if you fall during a roof repair, and can’t perform your own job? While this doesn’t affect those of us still making less than a plumber, it highlights the need to always put money and time into perspective.
Another area I found especially telling was the survey about clothing. One respondent mentioned he had a pair of shoes, and got them resoled every few months. Although he spent $100 for the shoes, and $50 for each resoling, this compares well with a friend’s son, who wears brand-name sneakers (at $65-$85 a pair), and which last about 2 months. The end result was his larger original investment pays off in the long run.
Of course, we could look at the kid with the latest, and the fellow with the resoled shoes, and wonder who really had the money – and be wrong. This I think summed up the book nicely: people get and keep their wealth by knowing when to spend it, and when not to. A pair of shoes seems insignificant, but added up across over a lifetime of purchases (and larger expenses like custom furniture, well-made clothing, housing in ‘good’ neighborhoods, and quality investments), the differences add up.
Do you have the millionaire mind? If you have a chance, pick up the book and have a quick scan of the results. You’d be surprised how it differs from our preconceptions. And by putting in even a few of their attitudes into place, we can start saving money right away – ‘thinking like a millionaire’. And with that kind of mindset, who knows what you can do?