I started reading “The Millionaire Next Door” yesterday, and am about half-way through. It’s written in a very conversational style by two wealth experts, so it’s a fairly quick read. The whole point is that millionaires aren’t what we think they are (high consumers), and that really anyone could be a millionaire with the right attitude and willpower to save money (income does not equal wealth).
I really liked a few anecdotes so far, so I wanted to note them here.
One is about prodigious accumulators of wealth (what they call PAWs–people who have saved a significant amount of money relative to their income) being excellent defensive players when it comes to money. They liken someone who is a good defender of their money to someone who is physically in shape but still exercises every day. I get this, because I am what most would consider relatively fit, and I still exercise regularly. I don’t do it to lose excess weight, I do it to maintain weight and generally help my well-being (mentally as well as physically).
The other anecdote is about the millionaire who shies away from the expensive champagne and caviar spread that has been set out for him to enjoy as he is interviewed about his millionaire status. He admits that he only drinks scotch and two kinds of beer, “free and Budweiser.” The point is that millionaires actually have rather blue-collar tastes and backgrounds, and that is how they sock away so much of their incomes and work so hard to maintain financial freedom. They don’t wear expensive clothes or lease expensive vehicles.
I really like the idea that there literally could be a millionaire next door, and you’d never know it. It may be the plumber with his own business, or the auctioneer who spends a lot of time around farm equipment, but it’s probably not the doctor with the $500,000 house or the middle manager with the new Maserati every year.