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The Millionaire next door
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It's been a few years since I read it, but basically its saying that if you end up splashing out on luxury items all the time, you're more likely to be working to the bone until your death. However, if you are sensible, even frugal, save for retirement, buy what you need, buy in bulk when you do etc. then you are more likely to be able to save and effectively become a millionaire, without ever needing that job in banking or that win in the lottery.
it is quite American though.
That's all true, but it does more than that.
The book offers evidence regarding the behaviour of high net worth individuals in the US.
This evidence indicates (according to the book) that the richer people in the US do things like put more effort into shopping around for cars, live in smaller homes in cheaper neighbourhoods, spend less on clothes and a WHOLE LOT of other examples.
So it's basically using an evidenced based approach to prove that frugality is what has actually made the rich people rich.
On top of that, it shows that those with the outward appearance of wealth are not generally the actual rich ones.
Edit: It is quite interesting, but it does tend to repeat itself and I found some of the stats quite boring.0 -
On top of that, it shows that those with the outward appearance of wealth are not generally the actual rich ones.
I think that is a good point. I drive a 12 year old car but could afford to buy a new one if I so wished. Many people I work with drive brand new ones but cannot afford to do so, buy it on credit and have no savings to speak of.
Who has the most wealth? The common expectation is the one driving the flash car. You wouldn't expect the person with the old car to be the richest but often that is the case.Remember the saying: if it looks too good to be true it almost certainly is.0 -
I buy nice cars at just over three years old and then run them for up to a decade. My FIL keeps going on about me and my flash cars but I pay massively less in depreciation than he does as he buys a new Renault every three years.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Only men call that love0
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.....live in smaller homes in cheaper neighbourhoods......
I believe the MND book means $ millionaire excluding personal private residence. So it excludes those who choose to live in their investment by buying the biggest house in the most expensive neighbourhood they can, and 'downsizing' in later life.
So I guess the rest, on average, would live in smaller houses.....0 -
Don't buy it - borrow it from the library.
Of course, you have to have a substantial amount flowing through your hands to be able to make a lot by cutting back. If you've £10/month left over and can turn that into £20 by not going out/not doing anything or buying anything ... it still won't amount to much.
The 7th thing the study found was:
7. They chose the right occupation.
Bit late if you've got the wrong one.0 -
gadgetmind wrote: »I buy nice cars at just over three years old and then run them for up to a decade. My FIL keeps going on about me and my flash cars but I pay massively less in depreciation than he does as he buys a new Renault every three years.
Or do what I do and buy a 3 year old renault.......... or two ....... or renaultsports ......... oops that's not frugal.
Boring, boring book by the way - which could have been precised into 10 pages.0 -
Some really salient points, I was brought up with two very fugal parents who both lived through war and real austerity. As the years passed they could not get out of this grove, it was always....we will enjoy it when we're older.
Well it of course never happened, they lived unhappy lives never enjoying the fruits of there working years. when they passed away my sibling and I who thought that they had no saving were shocked...and I mean physically shocked when we discovered what they had left. They never ate out or went on holidays (our hols were always at relatives) , my father ran an old morris spending weekends trying to keep going.
I think this kind of scrimping in quite common place in the older generation brought up in real hardship not the nonsense that they speak of today.
There savings have changed our lives and attitudes, we are determined use the gifts they have left us to live lives of worth and happiness wherever possible, money is a tool to be used carefully to make life better-remember scrooge? Don't be one-Merry Christmas!!The revolution is not an apple that falls when it is ripe. You have to make it fall.0 -
downshifter98 wrote: »Other main message is that passing money to adult off spring is almost always a mistake - they will (sub-consciously) learn to rely on it, expect more and consequently not learn the hard financial lessons; not sure how that sits with today's younger home buyers....
So many good points in it (though agree, a bit over-laboured at times).
Can I recommend Rich Dad, Poor Dad? I can honestly say if I had read that & follow up years ago I would be in a very different position to what I am now.A positive attitude may not solve all your problems, but it will annoy enough people to make it worth the effortMortgage Balance = £0
"Do what others won't early in life so you can do what others can't later in life"0 -
nicknameless wrote: »Or do what I do and buy a 3 year old renault.......... or two ....... or renaultsports ......... oops that's not frugal.
Boring, boring book by the way - which could have been precised into 10 pages.
Buying a 3 year old Renault is a risky purchase IME;)
Not paying people to do things you can competently do yourself unless you really don't have the time - is that in there?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0
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