The millionaires we discuss are financially independent. They could maintain their current lifestyle for years and years without earning one months pay.
Who becomes wealthy? Usually a businessman who has lived in the same town for all his adult life. He owns a small factory, service company, or chain of stores. He married once and remains married. He lives next door to people with a fraction of his wealth. He's a compulsive saver and investor. And he made his money on his own. 80% of the wealthy are first generation rich. Seven characteristics of the wealthy:
They are not descendants of the Rockefellers or Vanderbuilts. They did it in one generation -- slowly, steadily, without signing a multi-year contract with the Yankees, without winning the lottery, without becoming the next Mick Jagger.
- They live well below their means;
- they allocate their time, energy, and money efficiently in ways conducive to building wealth;
- They believe that financial independence is more important than displaying high social status;
- Their parents did not provide economic outpatient care;
- Their adult children are economically self-sufficient;
- They are proficient in targeting market opportunities; and
- They chose the right occupation.
Windfalls make headlines, but such occurrences are rare. During a lifetime the probability of becoming rich via such paths is lower than 1 in 4000. Contrast these odds with the proportion of American households in the $1 million and over net worth category: 3.5 per 100.
Another characteristic is that their spouses are even more frugal than they are.
[In 2000] the median household [had] a net worth of $15,000 excluding home equity. Without a check from an employer, the typical household could survive only a month or two.
Other Books Worth a Look:
- All the Money in the World; How the Forbes 400 Make--And Spend--Their Fortunes by Peter Bernstein and Annalyn Swan
- The 7 Habits of Highly Effective People by Stephen Covey