Really rich or just acting rich?
Here are some valuable insights from the works of Thomas Stanley, an author and a financial expert. Some of his books are The Millionaire Next Door ( 1996 ), which he co-authored with William Danko , The Millionaire Mind ( 2000 ) and Stop Acting Rich (2009 ). In the course of writing these books, Stanley closely studied the lives of hundreds of millionaires.
Let us distinguish between “real millionaires ” and “acting like millionaires ”. Real millionaires have high incomes but spend much less. Instead of splurging, they build assets like bank deposits, profitable properties and investments. This is in contrast with those who are just “acting like millionaires”. These are people who may also have high incomes — but spend the same amount or much more. So, they actually have little or no assets. These people are just one misfortune ( like a serious medical problem) away from financial downfall.
Stanley was able to identify several factors that led to the millionaire’s wealth — like a knack for business .( I will leave the “business aspect” to the pros.) However, Stanley discovered two other things that we can all relate to: most real millionaires live simple and frugal lives. That’s surprising, isn’t it? Unfortunately, these are not easy traits to acquire. Simplicity and frugality require an overhaul of the way we think , feel and act . They require wisdom and will power.
The millionaires that we usually see on TV — those donning Armani suits, sipping champagne in their private jets and yachts, and driving around in the latest Lamborghini —-are not representative of the millionaire population. Most of them are anonymous. Many of them use ordinary and inexpensive brands. Many of them buy late-model cars instead of new -model cars . “ The pride of owning a brand new car wasn’t worth the $US 20,000. price difference.”, says one . A study in the US reveals that 86% of buyers of high-end vehicles are “ acting like millionaires” — not the real ones. Most millionaires buy Ford or Toyota, not Mercedes-Benz .
Stanley also found out that many millionaires do not wear luxury clothes and expensive watches .They know that the people they have to deal with do not make business decisions based on the price of their car, clothes or watch. ( How often do you see Mark Zuckerberg wearing a suit ? He wears a t-shirt most of the time ! ) Another study shows that 75% percent of the members of elite country clubs are, yes —you guessed it — “ just acting like millionaires”. Most of the real millionaires do not even care about these clubs. Here’s another thing: most of the millionaires’ wives are strict with their household budget. These things may be unbelievable for ordinary people like us — but those are words from the horse’s mouth .
Now, about houses. This is what Stanley says : “ My research has found that most people who live in million-dollar houses are NOT millionaires.” He also discovered that most millionaires in the USA live in homes worth only US$300,000. or lower. Moreover, they avoid buying homes in high status neighborhoods because that would force them to buy expensive furniture and cars to blend in. In contrast, a lot of ordinary people earning less want pricy houses and top-of-the-line tables and chairs.
Ninety-five percent of the millionaires profiled by Stanley said that self-discipline is an important component of economic success. Can we do what they do? It won’t be easy. Materialism, vanity, instant gratification and social pressures can easily get in the way. It will take a lot of wisdom, humility and iron-clad will power to reach what these extraordinary people have reached. But nothing is impossible. Shall we start the journey to become real millionaires?