The Millionaire Next Door
BY THOMAS STANLEY
Based on statistics there are 100 million households in the USA. Only 3.5% of that are millionaires. Which these percentage of people will tend to get the wealthy kids, not because they inherit it. But because they are being taught how to spend their money wise. Average millionaire is not rich because of the salary, but it is because of the good financial decisions with the salary.
WEALTH IS NOT AN INCOME
This book defines several aspects and differences of having wealth and income. Which in reality, “wealth is what you accumulate not what you spend”. If you made a good income and spend it all, then you are not on the path of getting wealthier, you are just living high.
BUILDING YOUR WEALTH, INVEST
Most of the millionaires to be are using a certain formula called PAWs - (Prodigious Accumulators of Wealth), it defines a person who has the good financial decision makers. While there are those so called UAWs - (Under Accumulators of Wealth), it is those who has the bad decisions for their financials and wealth.
Spending wisely is being emphasized as well on this book. Which it indicates that you don’t have to follow all the things that can boost yours status symbol, including buying trendy gadgets or cars. Instead, you have to wise spending it and build your wealth. Getting trendy just to look cool as to show your status in life is way too bad if this affects your income and get broke in the future. It also points out about the manner of investing your salary to boost your wealth. Which you can also buy assets, lessen your liabilities and create invest more on the assets which can produce more assets. Examples are buying stocks, buying assets and investing on the real state business.
LIVING BENEATH YOUR MEANS
Which simply explains that you should be spending less than they make. A very simple idea which most of the people don’t really understand. A perfect example of this is spending less than what you are getting from your salary. But small spending like a cigarette a day can lead to big spending if you will count it for 365 days a year. Which small spending can be a big amount overtime.
BE FRUGAL
This simply means to live in very simple life and be in a low cost living lifestyle. It includes of not buying status items, for example a Watch which is having an obvious high rate pricing. Most of the millionaires appreciate buying pre owned liabilities like cars, which are slightly been used. They prefer to have these liabilities as the depreciation of the values never stops. Buy a house that you can afford based on your annual salary.
Most of Millionaires spend time, energy & money efficiently. They run a household like a business. They usually hiring a financial manager or planner.