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The Millionaire Next Door is a book that thoroughly studies the life of real millionaires. It throws out some amazing ideas. Compared with the billionaires we saw on Forbes, many millionaires live more like ordinary people.
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To become a billionaire, you have to take huge risks, be very lucky, and sometimes rely on some talent. And becoming a millionaire mainly depends on patience and self-discipline.
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Here are some observations from Millionaire Next Door:
1. A millionaire is very thrifty.
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Although there will certainly be exceptions, most millionaires are frugal. They accumulate wealth not by earning more than others, but by saving the money they earn.
2. Millionaires don’t shop for cars.
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Most millionaires drive their cars for a long time. Some of them drive very long. Although they may not spend money on their cars, they generally do not change a new car in a year or two. Their cars tend to last ten years or more.
3. Millionaires live simply.
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The typical millionaire lives in a house that is less than 10% of his net worth. They don’t live in so-called luxury houses. Living in ordinary houses, they can live according to the spending standards of those who have much less money than them, which reduces social pressure and allows them to buy clothes, cars and holidays in a more luxurious way.
4. A millionaire will save money.
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Millionaires often consciously save a considerable amount of personal income, sometimes the proportion can even reach 40%. The vast majority of Americans can only save 4% of their personal income.
5. Not many lawyers become millionaires.
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Certainly, there are also lawyers who have become millionaires, but few of them, such as lawyers or other professionals who work in high-end office buildings in the downtown of big cities, have become millionaires. It is found in the book that such people are easy to squander their rich income under strong environmental pressure, and it is difficult to accumulate a lot of wealth. Stay away from the occupation and working environment with high consumption level, which is conducive to learning to save and invest rather than consume.
6. Millionaires are also entrepreneurs.
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Most millionaires own a business. They may not bring them rich income, but they can become very valuable assets in the future. When retiring, millionaires can not only benefit from savings and investment like many other people, but also sell valuable businesses to expand their retirement funds.
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Therefore, if you have lived frugally, you have lived like a millionaire. If you are young and persist in saving or investing all the money you earn, you can save one million dollars or more when you retire. But don’t lie to yourself. Even after more than 40 years, it’s hard to turn a mere $1000 savings into $1 million. Rich people tell us that accumulating wealth depends on self-discipline, frugality and persistence in saving.