What The Millionaire Next Door Does NOT Pay For – Part 2

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Jonathan graduated with a degree in Business Administration from Ouachita Baptist University. He also holds a Masters in Business Administration from the University of Texas at Arlington. While he works for a contractor buying specialized tools, his passion is personal finance, frugal living, blogging, and stewardship.

Interested in becoming a millionaire? I’ve recently been re-reading and have been listening to the audiobook “The Millionaire Next Door: The Surprising Secrets of American’s Wealthy” by Thomas J. Stanley and William D. Danko. This is part two of a four part series.

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I’ve gone in a more in-depth book review here. But basically the book is based on the work of the two researchers named above who interviewed millionaires over several decades to find out how they got rich and how they stayed that way.

The book eliminates the myth espoused by media and marketing companies that rich people live extravagant lives. If you want to become a millionaire a good place to start would be to see how many of these “millionaire traits” you have and adjust your lifestyle accordingly.

This is part two of a four part series. Read part one here, part three here, and part four here.

What the Millionaire Next Door does NOT Pay for: Part 2 – 5 More Categories

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6. Eating Out on a Regular Basis – With the price increases in corn, eggs, wheat products, and dairy products preparing your own food is already expensive enough. If you eat out you will often pay double, triple, or more the price for a meal you could cook at home. If eating out on a daily basis you will easily waste a few thousand dollars a year.

How often do you eat out?

7. Think He Knows It All – People who think they know it all stop learning and thus become unaware of new opportunities. Make it a point to learn something new every day. The millionaire next door is often  reading and learning in order to stay motivated. Once you lose awareness, you lose. A good goal is to at the very minimum to read or listen to at least one book a month. Preferably more!

What have you been reading or learning lately?

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8. Socialize with People Who Waste Money – Who are your closest friends or relatives? What kind of patterns do they exhibit when it comes to handling their money? It’s common sense but let’s just state the obvious: The people you socialize with influence your habits. It is impossible to save money if you constantly hang around people who blow all their money and live the high life.

Do you hang around people who are constantly blowing their money?

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9. Desire Instant Gratification – Do you know how to say no to yourself? You have to think long-term to attain long-term financial freedom. The millionaire next door desires long-term deferred compensation over instant gratification. Knowing when to say no and say yes is a key factor.

Do you know when to say no and when to say yes to yourself?

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10. Pay Retail for Name Brand Clothing – You can easily save hundreds of dollars a year on clothing purchases by waiting for sales or shopping at discount retailers like Marshalls, Ross, Khol’s, etc. Even Target is a good option. You can buy clothes on heavy discount at the end of the season. Shop consignment stores and thrift stores for heavy discounts on clothing. Better yet, avoid so called “name brand” clothing all together.

Do you pay retail for name brand clothing?

Imagine yourself having financial freedom! Being able to allocate your resources towards what matters most to you and your family. Imagine yourself being able to give like never before. This is all attainable for the average person if you learn from those who have lived frugally, built wealth, and practiced self-discipline!

Think you’d like to read The Millionaire Next Door: The Surprising Secrets of American’s Wealthy? Join us for the book club discussion on Facebook in Book Worms – Book Club. The book discussions started this week with Chapter One!

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So, how’d you do on these 5 categories? Are you following the habits of the millionaire next door?

{Read Part 1 here} {Read Part 3 here} {Read Part 4 here}

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About Jonathan Key 112 Articles
Jonathan graduated with a degree in Business Administration from Ouachita Baptist University. He also holds a Masters in Business Administration from the University of Texas at Arlington. While he works for a contractor buying specialized tools, his passion is personal finance, frugal living, blogging, and stewardship.

59 Comments

    • Thanks for commenting Jessica! Yes, eating out all the time can be a drain on your finances for sure. What other advice would you give to those who want to find financial freedom?

    • Rachel I know right? Thanks for commenting. Have you thought about maybe getting the audiobook? If you have a long commute or travel some it can be very easy to “read” books.

  1. Great update in the series! I would say that they definitely set their own standards by the people they hang out with. One of the big lessons that my family had to learn was about social events. We love to socialize, but would not end up doing it at the bar every weekend, or other places that cost a bunch of money to get into. We have found that potlucks and hosting events at our house or play dates at the park work great and allow us to use many free resources available! Thanks for posting these!
    Steve @ MyFamilyOnABudget recently posted…Do You Use A Checking Account Buffer?My Profile

    • Thanks Steve for commenting! Social events can be a challenge. Particularly when everyone is buying 2-3 things for their kids for example and you’ve agreed with your wife on 1. I love the idea of having friends over and having potlucks. We try to have people over to play board games or just hang out. Play dates at the park are a great idea too. We do that often and love it!

    • This is true Marie. Thanks for commenting. That said, if you cook in bulk you can have left overs or freeze portions so that probably making meals end up cheaper. Also the quality of the food may be poorer if you eat out instead of cooking. Food for thought. What do you think?

    • Thanks Bismah for commenting. Have you thought about listening to audiobooks or podcasts? I’ve found when exercising, in the car, or out and about running errands that listening to books can be helpful. Good job making your own food most of the time. That saves a lot of money and adds up in the long run! So many people are eating into their retirement. Literally.

  2. Interesting perspective. I am a successful career woman and I eat out – A LOT. It is usually cheaper for my husband and I to do so rather than to grocery shop – and with my travel schedule the leftovers are known to go to waste. Each person has to do what’s right for them and their financial goals.
    Heather recently posted…So…I Moved to the SouthMy Profile

    • Thanks for commenting Heather! I agree you’ve got to personalize your finances to make sense for your family’s situation. This is just what a higher percentage of the typical millionaire next door interviewed in the book did. I wonder if you tried to compare one month to the next what the cost would be eating out verses trying to eat at home? Perhaps try that out one month and see how it goes. I wonder too at the quality of food people get when eating out. I know the quality of food when we cook and eat at home is typically a lot better. Of course, that may not be the case for everyone. Thanks for adding your perspective!

  3. I have never thought about comparing myself to a millionaire before or trying to be like one, so this was a different read for me. I can identify with #6, 8, and 10 however. It is far better to ask Jesus where I can use the money He blesses us with than on things I don’t need.
    Blessings,
    Deborah recently posted…Praying Over Your Husband’s FinancesMy Profile

    • Deborah I think I understand where you are coming from. I agree we are to be good stewards of what God has given us. I don’t think I mentioned anything that people don’t need. What I’m trying to point out is for people to imitate the habits of the millionaires who are frugal, self-discipline, live on a budget, save for retirement, and have an emergency fund. Also, the greater income someone has the more they can give right? Thanks for adding your perspective to the conversation!

    • Thanks for commenting Patrice! Yes, the author’s define a millionaire as someone who has a net worth of 1 million ore more. Living frugally like the millionaire next door makes sense though right?

  4. This is a great post! I think the instant gratification is the hardest part for most people nowadays. Everyone is used to being able to just pull out a piece of plastic and pay for anything they want right then and there. This without even thinking of the actual money being spent.
    Katie recently posted…We Have a New Allotment!My Profile

    • Thanks for commenting Katie! I agree it seems a credit card or debit card is the way to go these days. And when someone pulls out cash it seems like the others in the line tend to roll their eyes. If you have envelopes though remember to say to the person “Living like no one else.” or something to that effect. I believe there’s studies that show we spend 22-28% more in the grocery store when we use plastic. Great comment and reminder!

    • Amanda yes this is true. Unfortunately, people who are in a constant state of emergency are always wanting to borrow or receive gifts. You have to determine what is right for you and your family for sure. Also, there’s the risk of enabling people instead of truly helping them. Friends and relatives are no different in that respect. Thanks for commenting!

  5. For me personally I’ve struggled with the whole thinking I know everything… Surprise! Lol. I thought I knew all about personal finance a few years ago. The more I learn the more I realize the more room there is to grow.

  6. I also struggle with the instant gratification thing. Saying No is hard to do to the red faced kid that comes out at times. It’s a process. Thankfully, I’ve become a little better at that since discovering Dave Ramsey, Saving Advice, Get Rich Slowly, etc.

  7. I’m with the Millionaires on all of these things. I hardly eat out, don’t spend time with people who waste their money, and never pay retail for name brands. Ever. I’m not sure about the Instant gratification thing, but I think I’m pretty good with that one too.
    Shann Eva recently posted…Home Matters Linky Party #50My Profile

  8. Here’s the continuation of my comment (I accidentally pressed “enter” – oops). I have a small partition tray in the foyer. Everytime I come home from work, I empty my pockets of all (ALL) coins and place them there. It may just look like a bunch of coins but after a week or two, I have enough to get myself and the kids a treat without having to tap into the weekly budget. I’m a penny millionaire perhaps?
    Annemarie LeBlanc recently posted…‘The Bold and the Beautiful’ Spoilers: Watch The B&B Video Preview For Monday August 17 – SEE IT HERE!My Profile

  9. Sometimes a lot of us think that if we live lavishly, we are in a good place in life, but really it’s just money going down the drain. We need to learn how to live a simple life.

  10. May sound weird but I have no interest in being a millionaire or have excess amounts of money. I want to do well, and that’s all I care about. As long as I can care for my family and not struggle that’s what I need.

  11. These are really great thoughts on money! And, I’ve heard about this book and not read it yet! Thanks for sharing some of the principles. I came over on Cozy Reading Spot, and I’m glad to find your site! Hope you have a blessed weekend~ Melanie

    • We all have to start somewhere. But I understand your frustration Jelli. Having friends that understand when you say “this is not in the budget” can be very helpful. Thanks for commenting!

  12. This sounds like a great read indeed. I do do most of these things but the instant gratification is something I need to work on. I am for sure going to be checking this out. Thanks for sharing.

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