Interview with the Millionaire
I hear so many comments about very affluent people and their spending (or lack thereof) habits. "So and so can afford to do more but they're too darn cheap!" or "I can't believe they won't spend money to update that." My thinking on these comments is, "That's exactly why they're well off. They have frugal habits". I know many of you do not share this sentiment at all, so I thought I should set out to do my own research.
I will preface the rest of this blog post by asking you who are doubters to keep an open mind. Please remember that my interviewee was not in fact born a millionaire. He has worked and saved his entire life. His life is very much reflective of so many of those interviewed and surveyed for the book The Millionaire Next Door which is a fascinating read if you're interested.
A little while ago, I interviewed a millionaire. This man, who we shall refer to as "Mr. B" to preserve his anonymity, has been a family friend for many years. The purpose of this interview was to a. provide research and quotes for another article and b. was to compare his habits to those of "average" millionaires.
If you're anything like me, you think millionaires are anything but average. Before we begin, let's quickly define the term millionaire. A millionaire is someone who's net worth is more than $1,000,000. Someone's net worth is determined by taking everything you own and subtracting what you owe.
A Family Tradition
So, back to Mr. B. When we first sat down, I asked about his upbringing and family history. He was raised on a farm and learned from an early age to work hard, to take care of his possessions, and that he needed to face his problems head on. A rooster was trying to flog you? Well, you need to go show that rooster who's boss! A bull chased you? Absolutely not. You weren't gonna have that happen to you on this farm. His parents also really pushed for him to be a strong, honest person with integrity. They didn't push him to chase after dollars, but instead to pursue a path that would build his character.
Then, we moved onto his careers. Mr. B had two distinct careers over the course of his life: a lengthy and highly decorated military path and a business owner. Mr. B credits his military years for teaching him the importance of serving something bigger than himself. He also credits the military for a wonderful pension and retirement. He's also been very successful as a business owner. He said his average pay over the course of his life, in today's dollars, was around $100,000. And yes, that's absolutely a terrific salary. However, it's the habits that make millionaires who they are. Not just their income.
Habits of the Rich and Not-So-Famous
So, what habits are these that help make someone wealthy?
1. Slow and steady wins the race
Sure, Mr. B had an income that most people would love to earn. However, plenty of Americans DO earn that level of income - or more - and they have nothing to show for it but a lot of debt. Mr. B stated that a good friend of his has tremendous knowledge of investing in mutual funds. So, they talk about investing a lot when they're together, invest more when there's a dip in the market, and don't get sucked into day trading (trying to time the market). He said years upon years of steady investing in mutual funds have led to his sizable nest egg.
2. A life of moderation
Another key piece of wisdom Mr. B had to offer was that living a life of moderation is necessary. He never drank or smoked much and didn't gamble at casinos either. Mr. B is convinced that having a life with a focus on stability is a huge part of the equation.
3. Keeping up with the who?
You wouldn't believe it, but Mr. B is a millionaire who doesn't act rich. In fact, most millionaires don't act what we would consider rich. In fact, most millionaires don't busy themselves with trying to keep up with the Jones's because they all know that the Jones's are broke. You're not going to see most millionaires wearing fancy clothes or driving flashy cars. In fact, many own very practical cars that aren't even new off the dealership lot. Mr. B said that buying brand new cars is a terrible idea financially. He buys a two to a three year old car and pays for them with cash.
4. Avoid debt
This is a big key. Mr. B stated that he doesn't utilize debt for anything other than some of his real estate investing, and even then he only gets a 15-year fixed rate mortgage and still aggressively pays down the balance. He doesn't utilize credit cards or any other kind of consumer debt. His avoidance of debt allowed him to save for a solid future.
If you're saying to yourself, "Of course he doesn't have debt, he's a millionaire!" then you need to flip a couple of words around. He's a millionaire because he has invested heavily and doesn't utilize debt!
5. Give in a big way
Mr. B tithes regularly to his church. This habit goes hand in hand with the "life of moderation" mentioned in item 2. He gives back to his country, his community as a business owner and to his church. This is a huge theme in Mr. B's life. Again and again, he reiterated to me that his net worth wasn't the end goal. The end goal was for him to become a person with integrity and character.
6. Have a plan
It's as simple as that. I've said it before on here time and time again. Budget, budget, budget. Tell your money where to go. You know who crunches the numbers annually and monthly? Mr. B. You know who's a millionaire? Mr. B. This is a practice that many of us don't utilize and our money just slips away from us! Don't let that be you.
Thank you so much again for stopping by. I appreciate each and every one of you! I had so much fun interviewing Mr. B for this one! Stay tuned for the next installment on "Parenting on Pennies".
I will preface the rest of this blog post by asking you who are doubters to keep an open mind. Please remember that my interviewee was not in fact born a millionaire. He has worked and saved his entire life. His life is very much reflective of so many of those interviewed and surveyed for the book The Millionaire Next Door which is a fascinating read if you're interested.
A little while ago, I interviewed a millionaire. This man, who we shall refer to as "Mr. B" to preserve his anonymity, has been a family friend for many years. The purpose of this interview was to a. provide research and quotes for another article and b. was to compare his habits to those of "average" millionaires.
If you're anything like me, you think millionaires are anything but average. Before we begin, let's quickly define the term millionaire. A millionaire is someone who's net worth is more than $1,000,000. Someone's net worth is determined by taking everything you own and subtracting what you owe.
So, back to Mr. B. When we first sat down, I asked about his upbringing and family history. He was raised on a farm and learned from an early age to work hard, to take care of his possessions, and that he needed to face his problems head on. A rooster was trying to flog you? Well, you need to go show that rooster who's boss! A bull chased you? Absolutely not. You weren't gonna have that happen to you on this farm. His parents also really pushed for him to be a strong, honest person with integrity. They didn't push him to chase after dollars, but instead to pursue a path that would build his character.
Then, we moved onto his careers. Mr. B had two distinct careers over the course of his life: a lengthy and highly decorated military path and a business owner. Mr. B credits his military years for teaching him the importance of serving something bigger than himself. He also credits the military for a wonderful pension and retirement. He's also been very successful as a business owner. He said his average pay over the course of his life, in today's dollars, was around $100,000. And yes, that's absolutely a terrific salary. However, it's the habits that make millionaires who they are. Not just their income.
Habits of the Rich and Not-So-Famous
So, what habits are these that help make someone wealthy?
1. Slow and steady wins the race
Sure, Mr. B had an income that most people would love to earn. However, plenty of Americans DO earn that level of income - or more - and they have nothing to show for it but a lot of debt. Mr. B stated that a good friend of his has tremendous knowledge of investing in mutual funds. So, they talk about investing a lot when they're together, invest more when there's a dip in the market, and don't get sucked into day trading (trying to time the market). He said years upon years of steady investing in mutual funds have led to his sizable nest egg.
2. A life of moderation
Another key piece of wisdom Mr. B had to offer was that living a life of moderation is necessary. He never drank or smoked much and didn't gamble at casinos either. Mr. B is convinced that having a life with a focus on stability is a huge part of the equation.
3. Keeping up with the who?
You wouldn't believe it, but Mr. B is a millionaire who doesn't act rich. In fact, most millionaires don't act what we would consider rich. In fact, most millionaires don't busy themselves with trying to keep up with the Jones's because they all know that the Jones's are broke. You're not going to see most millionaires wearing fancy clothes or driving flashy cars. In fact, many own very practical cars that aren't even new off the dealership lot. Mr. B said that buying brand new cars is a terrible idea financially. He buys a two to a three year old car and pays for them with cash.
4. Avoid debt
This is a big key. Mr. B stated that he doesn't utilize debt for anything other than some of his real estate investing, and even then he only gets a 15-year fixed rate mortgage and still aggressively pays down the balance. He doesn't utilize credit cards or any other kind of consumer debt. His avoidance of debt allowed him to save for a solid future.
If you're saying to yourself, "Of course he doesn't have debt, he's a millionaire!" then you need to flip a couple of words around. He's a millionaire because he has invested heavily and doesn't utilize debt!
5. Give in a big way
Mr. B tithes regularly to his church. This habit goes hand in hand with the "life of moderation" mentioned in item 2. He gives back to his country, his community as a business owner and to his church. This is a huge theme in Mr. B's life. Again and again, he reiterated to me that his net worth wasn't the end goal. The end goal was for him to become a person with integrity and character.
6. Have a plan
It's as simple as that. I've said it before on here time and time again. Budget, budget, budget. Tell your money where to go. You know who crunches the numbers annually and monthly? Mr. B. You know who's a millionaire? Mr. B. This is a practice that many of us don't utilize and our money just slips away from us! Don't let that be you.
Thank you so much again for stopping by. I appreciate each and every one of you! I had so much fun interviewing Mr. B for this one! Stay tuned for the next installment on "Parenting on Pennies".
Comments
Post a Comment