Just finished reading The Millionaire Next Door

[Red]

Good book--An eye opener to say the least. Secret to becoming wealthy, according to the book, is to live way below your means and invest the rest of your money.

Wealthy = net worh, not your annual income. Most of the people in the book have a lot of net worth, but they may have been making $50k for last 20 years and were just great with their money the entire time.

Obviously, self control, determination, goals and starting your own business are important keys to being an affluent American, but he makes good points about how most millionaires in the US live in plain ol' subdivisions, drive used American vehicles, and find satisfaction in spending time with their family versus making money.

 

[OutHouse]

I have seen that book and might get it for my summer break lesiure read.

 

[Aquaman]

anyone read the follow up book "Millionaire Mind"?

Cheers,
Aquaman

 

[BigToque]

being careful with your money is a great way to save money.

The real goal people should set their sights for is getting enough assets so that the gains from your assets pays for your expenses. Then all your income can go to saving and other purchases.

 

[edmicman]

i'm too cheap to read the book - can you give me the main points, etc.?

 

[Descartes]

I just finished my last book last night, so I'm in need of a new one. I'll pick this one up today as it seems like a quick read.

Thanks!

 

[kranky]

Originally posted by: edmicman
i'm too cheap to read the book - can you give me the main points, etc.?

No library near you?

 

[rh71]

I read that book while on jury duty... I wasn't at all impressed. Sure they broke down the facts of wealthy people and how they become so... their spending habits, what they choose to own, etc... but you know what ?

WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

To clarify, I'm not saying they should spend every penny... but what really is the point of saving all that money just to live like a commoner ? Surely money affords you to live above the common man...

 

[Red]

Originally posted by: Descartes
I just finished my last book last night, so I'm in need of a new one. I'll pick this one up today as it seems like a quick read.

Thanks!

Yeah, 240 pages goes by fast if you're interested the topic.

 

[GasX]

Originally posted by: edmicman
i'm too cheap to read the book - can you give me the main points, etc.?

They key to being wealthy is spending less than you make and investing your savings.

It's the kind of sage advice that people think comes from some sort of genius. It is the financial equivalent of the "eat less and exercise more and you will lose wieght" diet. It makes perfect sense, but not eveyone has the discipline to do it...

 

[Ogg]

Originally posted by: edmicman
i'm too cheap to read the book - can you give me the main points, etc.?

live way below your means

I dont think any of us with common sense really need to buy the book. Theres no great secrets in there.
And now we can just pass Reds around anyway.

red send it to edmicman first!!!

 

[iamwiz82]

Originally posted by: rh71
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

I agree. Money is nothing if you just horde it all. You become like the people who are dying off now who saved every penny later in life after experiencing the Great Depression. You end up with a pile of money for your heirs, who promptly blow it on a new car and a new set of boobs.

 

[Red]

Originally posted by: rh71
I read that book while on jury duty... I wasn't at all impressed. Sure they broke down the facts of wealthy people and how they become so... their spending habits, what they choose to own, etc... but you know what ?

WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

To a point, I agree. It explain that most of these people sought after financial independence, early retirement, etc. They would rather live frugally for 30 years, retire @ 55 with $5million in the bank versus living a life of hyperconsumption, believing that the new car actually brings you happiness when it doesn't, retiring at 65 or 70 with nowhere near $5million in the bank. Which option would you pick?

 

[iamwiz82]

Originally posted by: Red

Originally posted by: rh71
I read that book while on jury duty... I wasn't at all impressed. Sure they broke down the facts of wealthy people and how they become so... their spending habits, what they choose to own, etc... but you know what ?

WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

To a point, I agree. It explain that most of these people sought after financial independence, early retirement, etc. They would rather live frugally for 30 years, retire @ 55 with $5million in the bank versus living a life of hyperconsumption, believing that the new car actually brings you happiness when it doesn't, retiring at 65 or 70 with nowhere near $5million in the bank. Which option would you pick?

However, once you get into the mode of constantly saving, it is very hard to break out when you retire. You end up collecting cans on the side of the road and driving an old K-car while your $5 million continues to collect interest.

 

[GasX]

Originally posted by: iamwiz82

Originally posted by: rh71
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

I agree. Money is nothing if you just horde it all. You become like the people who are dying off now who saved every penny later in life after experiencing the Great Depression. You end up with a pile of money for your heirs, who promptly blow it on a new car and a new set of boobs.

If you managed to save a few million dollars, you could retire and live comfortable off the interest for the rest of your life without worrying about how to pay for anything from vacations to emergency medical bills to college tuition.

It's only hoarding if you keep it under your mattress. If you put it to work, it just makes good sense...

 

[Nitemare]

The Wealthy Barber > Millionaire Next Door

 

[skace]

The idea is that if you save the money early enough on. You should get to a point where you can live wealthily. Which includes spending your money at that point.

The point isn't to simply save your money until you die...

 

[Red]

Originally posted by: iamwiz82

Originally posted by: rh71
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

I agree. Money is nothing if you just horde it all. You become like the people who are dying off now who saved every penny later in life after experiencing the Great Depression. You end up with a pile of money for your heirs, who promptly blow it on a new car and a new set of boobs.

It talks about this exact thing in the book. It said many affluent people make the mistake of giving $$ to their heirs / children too early in life. The secret to raising responsible, mature, financially independent children while your rich is to never let them know you are rich.

 

[maziwanka]

im all about fun now.

i am 22 though.

 

[masterxfob]

Originally posted by: rh71
I read that book while on jury duty... I wasn't at all impressed. Sure they broke down the facts of wealthy people and how they become so... their spending habits, what they choose to own, etc... but you know what ?

WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

To clarify, I'm not saying they should spend every penny... but what really is the point of saving all that money just to live like a commoner ? Surely money affords you to live above the common man...

bingo! we have a winner!

 

[iamwiz82]

Originally posted by: Mwilding

Originally posted by: iamwiz82

Originally posted by: rh71
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

I agree. Money is nothing if you just horde it all. You become like the people who are dying off now who saved every penny later in life after experiencing the Great Depression. You end up with a pile of money for your heirs, who promptly blow it on a new car and a new set of boobs.

If you managed to save a few million dollars, you could retire and live comfortable off the interest for the rest of your life without worrying about how to pay for anything from vacations to emergency medical bills to college tuition.

It's only hoarding if you keep it under your mattress. If you put it to work, it just makes good sense...

As I said though, the mindset of "save save save" is very hard to shake. Anyone I know that is "wealthy" due to years of saving and hard work does not enjoy their riches to any extent.

 

[Descartes]

Originally posted by: Red

Originally posted by: iamwiz82

Originally posted by: rh71
WHAT IS THE POINT OF MAKING MONEY if all you're going to do is save it ? What kind of life is that ?! You only live once. If they intend to hand it down to the next generation, that's great... but is that their intention ? I laughed at most of the people they describe... they can keep their money... it's worthless.

I agree. Money is nothing if you just horde it all. You become like the people who are dying off now who saved every penny later in life after experiencing the Great Depression. You end up with a pile of money for your heirs, who promptly blow it on a new car and a new set of boobs.

It talks about this exact thing in the book. It said many affluent people make the mistake of giving $$ to their heirs / children too early in life. The secret to raising responsible, mature, financially independent children while your rich is to never let them know you are rich.

They're going to find out sooner or later that they live a more affluent life than others.

I was not born wealthy, but I went to a grammar school with a bunch of wealthy bastards. I became friends with them because they thought I was "one of them", but on one occasion we had all gone out to eat, so one of the mothers took me home. When we pulled up to my house one of the more expressive bastards said, "Uhhhh, you live.... there??" I laughed because I couldn't believe how sheltered they must have been to think there were only rich people in the world. I lived in a nice reasonable house too, but it just wasn't a bloody manor.

Anyway, the point of the story is that I don't think keeping your kids ignorant is a good thing.

 

[Viper GTS]

Originally posted by: maziwanka
im all about fun now.

i am 22 though.

You're already late, though at 22 it's salvageable.

The really sad ones are the 40 year olds who are still living like that.

Viper GTS

 

[kranky]

Sigh. The book does NOT say "hoard all your money". It simply explains that there are a large number of very wealthy people who live comfortable middle-class lives by being intelligent with their available funds. None of the people in the book eat out of dumpsters or live in an abandoned trailer. They live comfortably. But they are careful about how they spend their money.

For example, many of them don't buy new cars, they buy year-old cars instead. It's not a question of being able to afford it; they just don't believe it's worth paying that much more just for a car that's brand new instead of a year old. When you see how much that saves over a lifetime, it's staggering.

They don't buy lottery tickets or $5 Supremo Latte Ventes at Starbucks, because they would rather have an extra $1000 in their bank account at the end of the year instead. They don't continually keep moving into more expensive homes because they want to actually have one paid in full someday. To some people, that might be "hoarding", but not to everyone.

They understand how compound interest works for you when you have money, and how it works against you when you owe money.

The book doesn't tell you what you ought to do; it tells you how other people of middle-class means have managed to accumulate a good bit of wealth while living comfortably. Whether you want to emulate them or not, the important thing is to understand more about what is achievable.

 

[AccruedExpenditure]

Sounds like common sense to me.