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.
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.
What the Millionaire Next Door does NOT Pay for: Part 3 – 5 Further Categories
11. Waste Money By Keeping It in a Checking Account – If you want to increase your wealth you have to set your money up to make more money. Most checking accounts yield little to nothing in interest. Think long-term say 5 more years. The Simple Dollar suggests keeping your emergency fund in a savings account. Invest in quality stocks, bonds and mutual funds; especially those with high yield dividends and interest. Invest into your retirement accounts like your 401k, 403, traditional IRA, and Roth IRA. See this Forbes article or check out Investopedia to learn more about investing. Look into buying rental properties or some land in an area with growth potential.
Do you have a large portion of your money in your checking account?
12. Replacing What is Not Broken – This article in Consumer Reports suggests not to spend more than 50% of a products value on fixing it. Yet there has to be a balance between repair costs and replacement costs. Some repair projects you can probably learn to do yourself. Are you constantly upgrading your technology such as your cell phone, laptop, or hand-held device? Do you replace items around the house instead of fixing them? The millionaire next door fixes things. Fixing something is usually significantly cheaper than buying a brand new replacement item. This is particularly true if you fix it yourself.
Do you find yourself throwing away items instead of attempting to fix them?
13. Visiting the Tanning Bed – Only $25 a month for skin cancer? Where do I sign up? If you want a tan all year round, move to Florida or California. For those that live in those two states and still go to the tanning bed… WOW! Seriously? The CDC has data and studies that link tanning to skin cancer, including melanoma.
Do you pay to get a tan on a weekly or monthly basis?
14. Impulse Buys – Impulse buying wastes money and leads to a cluttered house full of “stuff” you don’t need or use. Try this discipline out. If you see something you like at the mall, simply walk away. Use the 24 or 48 hour rule. Think on it for a day or two. If it still holds value in your mind, maybe it’s worth buying. Rule of thumb: NEVER buy something the first time you see it. The Simple Dollar has suggestions on how to beat impulse buys.
Do you find yourself buying on impulse on a daily or weekly basis?
15. Waste Time on Senseless Activities – It is said that time is money. In actuality, time is far more important than money. Time is incredibly precious. Time is your life. If you waste it, you will fail. It is really that simple. How would you define senseless activities? I’d say some examples of senseless activities can include spending a majority of your day sleeping, shopping for things you don’t need, spending countless hours in front of the television, spending countless hours playing video games, spending hours a day worrying about what might happen, spending hours a day surfing the internet with no purpose, spending hours a day smoking, etc.
Do you often find yourself spending time on senseless activities during the week?
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. We are currently on chapter 3 of the book discussions!
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So, how’d you do on these 5 categories? Are you following the habits of the millionaire next door?