Millionaire Next Door

I've been regularly reading Frugal Pinoy's blog and her latest article caught my interest. It's her review on Thomas J. Stanley and William D. Dank's book "The Millionaire Next Door".

There are a lot of interesting points that were covered in her review. Here are some that I found interesting:

A. Wealth is not the same as income

Having a high-income job does not equate to being wealthy. There are a lot of people who work in jobs that pay a lot of money, but they are not exactly rich. They cannot survive if they lose their job.

Most millionaires don't even look or act like millionaires. Based on my experience, this is true. I've seen a lot of millionaires who dress like people from the lower class, but they are filthy rich. Most of them don’t even have an MBA degrees, nor did they inherit their wealth from their parents.

B. Common traits of millionaires

The authors made a survey among American millionaires and found several common characteristics that they share (which probably explains how they managed to acquire their wealth).

1. Millionaires live well below their means. That's probably the reason why they are rich... they only spend a small tiny fraction of their money.

2. Millionaires allocate time, money, and energy in building wealth. They are goal-oriented people who are able to manage their money well and aim to become financial secure and independent. This means they can live well without regular employment.
3. Millionaires believe financial independence is more important than displaying social status. Having a lot of fancy stuff does not equate to being rich.

4. Their parents did not provide economic outpatient care.
This means that they did not rely on rich relatives or inheritances to get rich. They earned their money by themselves.

5. Their children are financially self-sufficient. Millionaires make sure their children can support themselves.

Now that I've finished reading the review, I'm thinking of getting a copy of the book. Financial independence is always one of the things I want to achieve, but somehow I find it difficult to do or actualize. I think this book would help me develop the right attitude with regards to savings and investment.