{"id":533,"date":"2012-12-13T17:09:36","date_gmt":"2012-12-13T22:09:36","guid":{"rendered":"https:\/\/www.cashflownavigator.com\/blog\/?p=533"},"modified":"2018-08-13T19:35:21","modified_gmt":"2018-08-13T23:35:21","slug":"wealth-and-cash-flow-lessons-from-the-millionaire-next-door","status":"publish","type":"post","link":"https:\/\/www.cashflownavigator.com\/blog\/2012\/12\/wealth-and-cash-flow-lessons-from-the-millionaire-next-door\/","title":{"rendered":"Wealth and Cash Flow Lessons from The Millionaire Next Door"},"content":{"rendered":"

<\/h3>\n

Attitudes and Behaviors \u00a0of the Affluent \u2013 How do you Compare?<\/em><\/strong><\/h3>\n

Thomas J. Stanley and William D. Danko have met with and conducted research among wealthy Americans since the early 1970s.\u00a0 As the title of their first book The Millionaire Next Door<\/span> suggests, the profile of a typical millionaire might surprise you.<\/p>\n

For example, most millionaires are self-made:\u00a0 80% are first-generation rich.\u00a0 The minority who do inherit their wealth have very different profiles and behaviors; they didn\u2019t earn it, so they don\u2019t appreciate it or manage it as effectively.<\/p>\n

Over 65% of millionaires who are still working are business owners.\u00a0 By contrast, only 20% of the U.S. population are business owners (self-employed).\u00a0 But the types of businesses owned by the wealthy don\u2019t suggest affluence.\u00a0 While some are self-employed professionals such as doctors and accountants, the majority are what the authors refer to as \u201cdull-normal.\u201d\u00a0 They include \u201cwelding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.\u201d<\/p>\n

How about their lifestyles?\u00a0 I\u2019m afraid the tabloids and the producers of TV\u2019s \u201crich and famous\u201d shows will be disappointed.\u00a0 Most live in what would be considered middle income neighborhoods, drive two- or three-year old cars or trucks (usually Fords or Chevys, not BMWs), and much prefer putting their hard-earned money into savings or investments rather than luxury items.<\/p>\n

The profile of a typical millionaire household<\/strong><\/p>\n

is not one of an overindulgent family <\/strong><\/p>\n

living in a high-status neighborhood <\/strong><\/p>\n

but instead of a practical, unassuming family <\/strong><\/p>\n

who might even be your own neighbors.<\/strong><\/p>\n

Here\u2019s why.\u00a0 Millionaires tend to share a common set of values.\u00a0 Stanley and Danko call them \u201ccommon denominators.\u201d\u00a0 \u00a0They\u2019ve identified seven.\u00a0 Here are a few:<\/p>\n

    \n
  • \u201cThey live well below their means.\u201d\u00a0 This is probably the most important one.\u00a0 That\u2019s right, millionaires are frugal.\u00a0 It\u2019s how they accumulate their wealth in the first place, and it\u2019s how they keep it.\u00a0 By contrast, other high income earners who should easily become millionaires instead become \u201chyperconsumers.\u201d\u00a0\u00a0 But when you keep overextending yourself with bigger and bigger purchases\u00a0 (as illustrated in our \u201cmoney pit\u201d pieces)\u00a0 it\u2019s hard to catch up, much less get ahead.<\/li>\n
  • \u201cThey believe financial independence is more important than displaying high social status.\u201d\u00a0 No McMansions, no luxury automobiles, and no $2,000 timepieces (aka watches). It\u2019s meat and potatoes, not caviar and Dom Perignon.<\/li>\n
  • \u201cTheir parents did not provide economic outpatient care\u201d for them.\u00a0 In other words, most millionaires accumulate their wealth independently.\u00a0 Nor, by the way, do they allow their children to become economically dependent on them.<\/li>\n<\/ul>\n

    So the picture Stanley and Danko paint is not of an overindulgent household living in an exclusive, high-status neighborhood but instead of a practical, unassuming \u00a0family who might even be your own neighbors.<\/p>\n

    The message to you?\u00a0 It\u2019s not rocket science and it\u2019s not beyond your reach.\u00a0 Your household can become wealthy if you stay focused and follow some common-sense \u201cmillionaire next door\u201d principles.\u00a0 But remember, wealth by itself isn\u2019t enough; you want wealth that generates cash flow.\u00a0 To get there you\u2019ll need to follow Cashflownavigator principles.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Attitudes and Behaviors \u00a0of the Affluent \u2013 How do you Compare? Thomas J. Stanley and William D. Danko have met with and conducted research among wealthy Americans since the early 1970s.\u00a0 As the title of their first book The Millionaire Next Door suggests, the profile of a typical millionaire might surprise you. For example, most […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19,10,9,45,20,17,16,3,11,8,7,12,1,46,21],"tags":[24,92,53,25,23,29,52,91,49,50,48,47,51],"class_list":["post-533","post","type-post","status-publish","format-standard","hentry","category-asset-accumulation","category-assets","category-cash-flow","category-debt-2","category-debt-reduction","category-financial-independence","category-financial-life-cycle","category-financial-planning","category-liabilities","category-net-worth","category-retirement","category-savings","category-uncategorized","category-wealth","category-wealth-accumulation","tag-cash-flow-2","tag-cash-flow-navigator","tag-cashflownavigator","tag-financial-independence-2","tag-financial-life-cycle-2","tag-income","tag-investments-2","tag-keith-whelan","tag-millionaire","tag-rich","tag-wealth-2","tag-wealth-and-cash-flow-millionaire-next-door","tag-wealthy"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts\/533","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/comments?post=533"}],"version-history":[{"count":22,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts\/533\/revisions"}],"predecessor-version":[{"id":947,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/posts\/533\/revisions\/947"}],"wp:attachment":[{"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/media?parent=533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/categories?post=533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cashflownavigator.com\/blog\/wp-json\/wp\/v2\/tags?post=533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}