Millionaires Like You
By: John Shepler
Wouldn't it be wonderful to be rich? If only you could hit that winning lottery number or have Meredith Vieira hand you a million dollars for the correct final answers. Who wants to be a millionaire? You do, of course. So do all your neighbors and friends, glued to their television sets, dreaming that someday their money worries will be a thing of the past. But how likely is that? Would you be surprised to know that there are millionaires living in your neighborhood right now? Would you be even more surprised to know that they weren't born to rich families and probably never won a dime in their lives? What if I told you it was possible, even likely, that you, too, could become a millionaire?
First, forget everything you know about the wealthy. Except for a select few, the people you think are rich really aren't. It's the ones you might never guess that are really the millionaires. That banker who dresses in $1,500 suits, throws the most lavish Christmas parties and drives this year's model Mercedes? Not rich. The major league pitcher in his 10th year of winning seasons? Nope. How about that bright new star sure to win an Oscar? Sadly, no. Well, then, if these people, living lives to be envied, aren't the millionaires, who could possibly be?
See that ranch house up the street? The one with the plumbing contractor who parks his pickup in the driveway overnight? You must be kidding! Uh uh. The construction business is booming and twenty years of treating customers like friends has really paid off. Instead of blowing the profits on a new mini-mansion and weekends in Vegas, the contractor and his family have quietly reinvested their earnings back into the business, some rental houses and blue chip mutual funds. The kids go to public school and hand down the clothes they've outgrown. These perfectly ordinary looking folks are worth about a million more than the upscale couple living two blocks over, with matching BMWs and a family income well into the six figures.
Shocked? Surprising twists like this are exactly what two Ph.D. researchers, Thomas Stanley and William Danko, found when they went looking for the rich in America. They wrote up the results in their best-selling book, "The Millionaire Next Door." What they found is that many of the people who are living rich really have few assets and need every bit of their substantial incomes to maintain the images of success that they think are so important. Even some entertainment celebrities and well known sports figures spend their money as fast as it comes in. The people with the real stores wealth, the solid bank accounts and investments, tend to be regular folk, who live in average neighborhoods and drive average well used American cars.
So the question is: Do you want to be a millionaire or just look like one? If looking the part is important, then get a job with a decent income, spend every cent that comes in and pile up the mortgages and credit card debt. Even modest earners can appear to be on easy street...for a short while.
Now, if what you want is real wealth, forget the high-flying lifestyle. Join the dentists, the plumbers, the engineers, the professors and the machine shop owners in quietly amassing a fortune that will sustain you in retirement...maybe even very early retirement. Here are some perhaps surprising keys to the secrets of the rich but not so famous:
First, and most importantly....live well below your means. You've heard the expression pay yourself first? Take 10 or better yet 20% of what you make and invest it. Live on the rest. Compounded earnings in stocks, bonds or even CDs will make you wealthy, but only if you let them multiply for decades. Start this practice with your first job and continue until you have enough to live on the rest of your life.
Need seed money to get started? Give up some bad habits. A 25 year old smoker who swears off and puts the cigarette money into an IRA can expect to have over a quarter million dollars accumulated by age 65...and a better chance to get there.
Live simpler. Stay in the apartment or starter house a few years longer, sell the boat and all that stuff overrunning the basement, polish up "old Betsy" and don't trade her for a new car until next season or the one after that. Don't spend your next raise. Increase your savings instead. When you've got it, DON'T flaunt it!
Become a small business owner. When you work for someone else, you're being paid the wholesale value of your skills. When you sell directly to customers, you can often command a higher retail price. The difference is that when you own the business, you get the profits as well as a salary. Many millionaires got that way by building a small retail store, restaurant, professional office, building trade, industrial supply or other entrepreneurship from the ground up. Even a sideline can make you wealthy if you work hard and stash the profits away for later.
Who can become millionaires? Teachers, accountants, salespeople, doctors, electricians, franchise owners, computer programmers...and you. That is, if you buy the notion of "get rich slowly" and have the gumption to stick with it until you inevitably do.
Books of Interest:
The Millionaire Next Door: The Surprising Secrets of America's Wealthy - by Thomas J. Stanley, Ph.d and William D. Danko, Ph.D. In this phenomenal bestseller, Stanley and Danko reveal surprising secrets about America's millionaires -- and provide a valuable blueprint for improving anyone's financial health.
The Millionaire Mind by: Thomas J. Stanley. An in-depth companion to "The Millionaire Next Door." Find out how the true millionaires think, what choices they make and how those choices have led them to wealth. You'll be suprised to learn that average people with average intelligence are the backbone of America's millionaires. Find out what makes them tick and how you can build your own wealth regardless of present circumstances.
The Roaring 2000s Investor: Strategies For The Life You Want by Harry S. Dent, Jr. Using his proven ability for predicting specific financial trends, the author of the nationally bestselling "The Roaring 2000s" provides pragmatic, innovative investment strategies designed to revolutionize financial planning for all investors. Read my article about this book, "Let's Hear that Roar, Bull!"
365 Ways to Become a Millionaire: (without Being Born One) by: Brian Koslow. Digest one of these every day before starting your quest for wealth and you'll be way ahead of the pack.
The Millionaire Kit: Surprisingly Simple Strategies for Building Real Wealth with CD-rom by: Stephen L. Nelson. No need to buy any secret software, everything is included on the CD ROM that comes with this book. Mac and PC compatible! Find out what the cigarette habit really costs and how dumping the butts can inflate your bank account. See what your real odds are in the lottery. Compare interest rates on loans and analyze the benefits of buying or leasing a home or car. More programs and directions are included in this handy package.
Everything You Know about Money Is Wrong: Overcome the Financial Myths Keeping You from the Life You Want by: Karen Ramsey. Did you grow up learning that more money will make you happier, that you have to pay for your kids educations, that you should stay at a job you hate or that you absolutely have to buy a house? You may have been deceived by the "money hype" for years. Find out what's wrong with these maxims and what better options may be available.
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First Published: March 6, 2000 as part of A Positive Light