This week's book discussion (+ giveaway): "The Millionaire Next Door"


#17

Well now. That’s quite a take on the book. But…is this your way of avoiding answering some personal questions Derek? Hmmm. Squirrel!


#18

Ummmm, yeah, me neither…:blush:

I hope you get your hands on it. It’s a great read and the stats don’t lie. It’s nice to see empirical evidence that a given lifestyle pays off…in more ways than one.

BTW: Nice to see you have your spending in line with your priorities and are quite happy about it (very YMOYL of you).


#19

Ah I haven’t read this book yet but it was in my back burner for the longest time. We only have so much time to read in a day, right? :smiley:

Anyway, I’m doing the following wealth accumulators:

  1. Saving more than I earn - like 50%
  2. Side hustling and trying to build businesses on the side
  3. Portfolio Income

While my husband and I only started to take FI very seriously 2 years ago, we decided not to let go of our first love: Travel, hence our FI goal will not be as fast as most people will


#20

Sounds like you’re doing amazingly well. It might not be as fast as most people but you’re not forgetting to live for the present along the way. Looks like you’re more TMND than most! Congrats!


#21

Thanks! As Rich Dad said, better be a tortoise than a hare, and enjoy ourselves along the way!

I just realized our story might not be as exciting as those who retire in their 30s but we’re making retiring at 40/50 cool too!


#22

My pleasure. Have your checked out the FIRE section of this forum? I think you’d enjoy discussing your thoughts with other FIRE-aspirers.


#23

The ones for me, are focusing on their finances, value-focused in their purchases and establishing good practices for their children (no grandchildren yet!) .
To be honest, I would be amazed if anyone on this forum is not already following one or more of these habits.
I’ve read the Amazon summary of this book, and it’s on my list.


#24

Ha! You’re probably right. Just call us a bunch of money nerds. :sunglasses:

Glad it’s on your list. It’s definitely top shelf for me.


#25

I’m on the library waiting list for it!
Some years ago, I chanced on the Automatic Millionaire, and thought it made so much sense, I sent it to my older son, and told him to read it and pass it on to his younger brother. (Why buy 3?) We had a spate of weddings three years ago, and each couple got given a ‘Smart Couples Finish Rich’ book along with their present. Now, it is easy to see who took up some of the ideas. One couple evidently never read it!


#26

I read this book (so I don’t need to be included in the giveaway) and I also give it a thumbs up. I consider it one of the foundational PF books that shatters the conventional life style myths of a typical millionaire. A similar book is The New Elite by Taylor and Harrison, which focuses on the top 1% and who they are, and is more recent.

On a personal level, I think we’re a mixed bag on these areas:

Household goals: We don’t have any annual household goals.

Financials: Our financial are automated now. We have a firm budget that we live off of. Our annual spending budget is a small percentage of my annual total compensation, so saving rates are almost irrelevant and we don’t have targets. I keep track of key metrics, including net worth, portfolio management, passive income, on a quarterly basis.

Career: I don’t work for myself but I am a professional at a large megacorp that provides more than enough income to comfortably live.

Frugal/value purchasing: I am a huge fan of buying the right things that last forever. There are things that I buy that are required for my profession. I need decent suits, because I present in large audiences and clients frequently… I need a decent car to drive. I have even spent on a $700 watch. But once I purchase these, I use them for a very long time.

Overall, pegged on current compensation, I think I’ll be a PAW in 3 years. I think a better calculation would be to use the average compensation over my career, and using that figure, I am past the PAW target cutoff.


#27

I also like The Automatic Millionaire. It’s a personal version of “opt out” really. Once we’ve set up our system, we’re much less likely to change it and we end up accumulating $$ by default. It’s a beautiful thing. As for passing it around, that’s the best part of books: the shared experience, especially when some pages are dog-eared.

If you liked it, you will definitely like TMND.

Offering ‘Smart Couples Finish Rich’ is such a good idea. I can’t think of a better gift, no matter whether or not they open it. At least your intentions were good.

As an aside: Edinburgh? Jealous over here. I’ll make it to your neck of the woods someday.


#28

Thanks for “The New Elite” recommendation. I’ve ordered it from the library (2009 is relatively recent). I look forward to reading it.

Sounds like your household’s money management is right in line with those profiled in the book. Nice! :eyeglasses:

BTW: I hope you’ll set up your profile soon because your user name is intriguing. Where are you from?


#29

I have practiced all of the above except one. Guilty of buying new cars, mostly as a business expense. I am a professional, a business owner, a goal setter, very interested in finances and no kids. I have a long time spouse and we totally agree on all of the above. I think that this last trait, which is not really mentioned above, is one of the most important. You don’t have to have a spouse, but if you do, it definitely helps to have had just one and that they are like minded with you financially.


#30

Household goal setting: I’ve never been much of a goals guy, just bought when I wanted and squirreled away the rest and got a little bit (but not too) excited when I hit various round numbers. I’m pretty low maintenance.

Living Frugally: Until somewhat recently, it was not overly intentional, my purchasing decisions just inherently straddle the fence between frugal and cheap

Focusing on Finances: As my savings built up, I made more of an effort to learn about investing.

Working for self: No. I see self employment as far more risky and far more stressful. A lot safer to work for someone else. I’d rather work for 8 hours a day and have 16 hours a day off than feel like I’m “on call”.

Value focused: Absolutely. This all changed when I started having my own money vs. being supported by parents.The perfect example is cars. My parents bought me a Chevy Monte Carlo when I graduated high school. I thought it looked cool. It got terrible gas mileage. 6 years later I bought a Honda Civic, didn’t care what it looked like, I just knew it got good gas mileage and it was cheap. I still drive it.

Clothing: Any fancy clothing I own was a gift when I was younger. Thankfully I haven’t changed sizes too much. I seldom wear that sort of thing though. I had to YouTube how to put on a tie 6 months ago to go on a jacket and tie date. When I have to re-buy clothing I look at the brand and size on the tag and I find it on the internet (usually Amazon).

Accessories: I’m the only one in my family who has never had an Apple device.

No children or grandchildren, I always said I’d be the super cool uncle, but my sister hasn’t gone that route yet either.


#31

Hi there. Thanks for sharing your thoughts on this (cars and professional image go hand in hand, don’t they?).

“Yes!” to your last point. Your partner in life is HUGELY important and is the second of three points I highlighted in my review of the book on Rockstar Finance this week. Glad you agree. :wink:


#32

I salute you sir. Not easy to resist those gadgets (says a person who has a virtual orchard of electronics in her household).


#33

Well, I do have a work provided Galaxy S7 so It’s not like I’m rocking the flip phone or anything, lol.

Still the only one who never had an iPod though. Rocked that DiscMan to the very end.


#34

I’m originally from California and I moved to the upper midwest. When I first created my user name within the early retirement forum, it was in the middle of winter and I was simply cold :slight_smile:


#35

@Katrina: Congratulations! :confetti_ball:

You’re getting a copy of “The Millionaire Next Door”. @J.Money will be in touch with you to get your info and send it your way.

Thanks to everyone who answered last week’s question and/or contributed to the discussion.

Can’t wait to start another book review discussion this Friday!


#36

Wow, thank you! That’s so great! I can’t wait to read it. :smiley: