They will suffer from stress, owing to insecurity. A high debt load, relative to income, means they will always be living in a house of cards. This man and his wife are likely to be carrying so much debt that they cannot save enough money to withstand an emergency, such as the loss of a job. That’s all well and good, but those material items won’t build financial security.
So, to him, being “a lot better off” meant achieving enough career success to enable him to own “a nice home in an upscale neighborhood, fine clothes for everyone in the family, classy cars, club memberships and items purchased in the best stores.”
He was amazed at the fancy cars being driven by some of the students, while he had no car and his parents had an old vehicle. It’s fascinating that people at all income levels live “paycheck to paycheck.” In one case study, the authors cited cultural factors as a major reason why a successful salesman was so focused on “being a lot better off than his parents.” The man came from a lower-middle-class family and had gone to a high school with students from families with different social and economic backgrounds. The book cites several examples of people who were interviewed by the authors, so more insight could be gained into successful wealth-building strategies, as well as less successful strategies and non-strategies. This wealthy person lives in a regular middle-class or lower-middle-class neighborhood.Īccording to statistics backing the book, “more than 80% are ordinary people who have accumulated their wealth in one generation.”Īnd the most important factor in building that wealth has been what’s called underconsumption.Īre you living in the most expensive home you can afford? Are you driving the nicest car you can afford? If so, even if you’re earning a lot of money, there’s a good chance you are what the authors call a UAW, or “under accumulator of wealth.” Homes and cars are two of the main items that can keep you from accumulating wealth, but there are many others, of course. There’s no fancy car, no $5,000 watch, no McMansion. He or she makes no ostentatious display of wealth. The book defines the “millionaire next door” as someone who doesn’t look the part.
Even though the book was written before the credit crisis, its ideas are current. The book, which I just finished, was first published in 1996, but Stanley wrote a long preface for the 2010 edition. Read 8 secrets for success from early retirees.Īmong several thoughtful Father’s Day presents from beloved family members was the book “ The Millionaire Next Door” by Thomas J. As a result, you’ll need to begin planning early and have a realistic understanding of what it means to be financially secure.
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