The Millionaire Next Door: The Surprising Secrets of America's Wealthy

First off, good on you for doing this at 17.

Here's some things I wish I knew at 17:

Save your money. Save like a motherfucker. I'm 34, started saving for the first time two years ago and I absolutely HATE my past self. I'm happy, for the most part, with the experiences and time I spent my money on but there were SO many things that were a waste. I came from a poor family, who are still poor. My mother hasn't worked in like 20 years (no idea how she gets by - federal assistance in all its forms). I had zero financial education growing up and it took a mental breakdown over finances after my wife and I bought our first house (that it turns out we couldn't really afford) to get my shit together.

Save as much of your money as you can while still living reasonably and having a social life. I often think of all that money I spent on shitty weed, technology and other things I didn't need, etc. Save until you hit $10k in your savings account, then move your money into a slightly higher yield (but still liquid) account like a money market. Once you hit another $10k there then start looking into investments. This will take a while and that's okay, you're doing what you can.

Don't use credit. I fell into that hole when I was around 24, and I hit the bottom HARD. My wife did too, but not as bad as me. Remember that house I mentioned? We sold it and made $45k. $41k of that 45 went to paying off credit cards. Like the sean, they're dangerous and need to be respected and approached cautiously. Do NOT confuse your "minimum monthly payment" on ANYTHING with "This is what I can afford to put on credit per month." This includes credit cards, car loans, mortgage, etc. It seems great on the surface - "oh this friendly company called Visa is willing to let me buy this sweet new (guitar/phone/wardrobe/whatever) and have it RIGHT NOW and i only have to give them $95 per month!" but it isn't. They don't want you to pay that off. They want to keep you in debt - that's how they make money. Every single month that your credit card isn't at 0 they make money off you. You're paying for convenience and it's REAL easy to get lost in just how convenient it is. Again, we have $41,000 USD of credit card debt. That's a new Audi. That's a 20% down payment on a $160k house.

Use credit responsibly. I know this is contradictory but once you understand how credit works very well you can use it responsibly. At this point I use my credit card for EVERY PURCHASE I make and I pay that shit down to a $0 balance every two weeks (on payday). No ifs, ands, or butts. And because of this strict discipline and non-abuse of the credit card, my wife and I haven't paid for a flight in a long time. They don't make a dime off of me - I'm their model "shitty customer". You'd think a shitty customer doesn't pay and you're right - they dont - because they don't owe anything.

Do not do your math by the month. Sure make sure you can pay your bills, but don't think that just because it fits in your "monthly budget" it's okay. Look at things daily - my $1650 rent payment (we're renting because we don't have 20% or more to put down on a mortgage right now) costs me $55 per day. Five years ago I was making $26 per hour, so each day I worked 2.5 hours of it would be paying for a roof over my head that day. Your time is your money. Your money is your life. In the end we don't have money, it's not really a real thing. The only money we have is time. If each year costs a dollar then if you're lucky, someone handed you $100 when you were born and there's no way for you to get any more of it. Remember that. At this point the first 45 minutes or so of my "work day" is paying for my rent/roof over my head that day. Do this with all recurring purchases (and even ones that are one-time purchases). Starbucks? That's fifteen minutes of work. iPhone? There goes fifteen hours of your life to work.

Sorry if this is rambley, I've had a few drinks.

Anyways. Read some books - these ones in particular changed my life:

Your Money or your Life - if you do the audiobook, know that the woman who narrates it's voice will make you want to shove an icepick into your eyes.
The Millionaire Next Door - outdated in some ways, but some SOLID information. Don't skip this.
The Four Hour Workweek - people shit on Tim Ferriss but he writes a good book and it has some great information. The narrator for the audiobook is top notch.
The Martian - I just like this book, okay?

In all seriousness, if you want a copy of one of those books DM me and I'll pay for it.

> Ironically the owner, who is an actual millionaire, drives a mid 2000s Corolla.

Most millionaires drive old cars. https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

You are projecting YOUR willingness to pay more for the same stuff you were buying before with everyone else.

You should read The Millionaire Next Door. Tl;dr: people with sound money management skills absolutely are NOT okay with spending more just because they earn more.

Here's an entire book on the subject.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

I'll answer from a previously homeschooled perspective. All ages approximate.

5-13: Paying me for chores like dishes or mowing the lawn. Not going to lie, most of that went to baseball cards.

12ish: Opening a savings account to acquaint me with the formal financial system and learn about savings and compound interest.

14: "hiring" me to help them make websites for their company's intranet.

16: Helping me buy a car ($2000) for which I paid them $100/mo and for insurance. This allowed me to get a "real job."

16: Helped me open an Etrade account which I funded with my savings.

In my teens, I bought The Millionaire Next Door which affected my views on money ever since. I also got Rich Dad, Poor Dad, but that's widely known as a fraud now.

A key area has been finding the right balance between enjoying life and being frugal. We've been on same side as well as opposing sides of the discussion. When your SO is also your partner and friend, it makes the journey so much better.

An interesting related item... one of the most common shared attributes from high net worth individuals in Millionaire Next Door is a stable and long term marriage. I don't know if this means that savers choose wisely, or saving makes a marriage stay together...

Loses value as soon as you drive it off the lot. Here's a book for you: link.

But swatkins. Buying a car, especially a car as expensive as OP's is a wasteful purchase with no return value. almost cars go down in value. Not only that, they are highly illiquid. I actually know some supercars do go up in value....sorta (not much and not really after inflation) but good luck selling them. And you need to baby the shit out of them if you do. By that logic alone, buying a car with debt is an incredibly stupid decision, especially if you keep it.

Now for the data.

First off. IF you know anything about stocks, you'd know the Shiller CAPE is one of the only trustworthy predictors of future returns. Right now it is at a level it has only been at twice in history. Higher levels of the shiller CAPE imply lower future returns. And really high levels correspond to future crashes. So there will be a stock market crash in the near future or there will be lower returns. A real crash. The covid crash, is actually not that big of a deal since it recovered so quicky that we won't be that much worse.

Second. My argument isn't that the stock market will recover or that it is bad to invest. My argument is for behavior. You want to get into data, take a gander at the drawdowns for the SP500 . Notice that it can get as bad as 45% in some cases. Covid was 30% to put things in perspective. These drawdowns happen often. And, while I understand that , from a rational perpsective, you shouldn't care, behaviourally speaking, greater exposure to drawdowns means greater likelihood of being stupid.

Third. Leverage compounds the negative effect of drawdowns and bear markets. What if the market is down and you lose your job? 25 million people have already had that happen. How do you think their portfolios are faring? do you think 100k in debt would help them?

​

This is the issue with debt. It comes with the asusmption of perfection. Perfect outcome, perfect behaviours, no emergencies. Those are bad assumptions.

you should read this book. i think you would like it.

I suspect it's probably the case more often than you realize. Certainly not always, sure..

Have you read this book? https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

All that really matters though is you. Comparing yourself to others is a waste of emotional energy. As I said before, you have done extremely well for yourself so far. Relish in that, and allow yourself to enjoy the fruits of your labor.

This subreddit has a wealth of knowledge. Also a book that really opened my eyes: The Millionaire Next Door: The Surprising Secrets of America's Wealthy https://www.amazon.com/dp/1589795474/ref=cm_sw_r_cp_api_i_QIZHFbBCPNA6A

Buy one more thing, The Millionaire Next Door by Thomas Stanley.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

The biggest thing that separates millionaires from non-millionaires, when you control for income, is conspicuous spending. You need to find yourself in a place where you also look at people wearing trendy designer clothing, with a brand new SUV/Truck/Luxury Sedan, with ridicule. Bozo's is the official term.

Seriously, until you have that change of mindset, you're never going to be more than just middle class.

Good luck to you.

> Where you’re born and who your parents are are almost entirely the story of who you will become.

What's weird is that you think socioeconomic positions are just set in stone. Yet the US mints millions of entirely new millionaires every year. The majority of these millionaires are working-class people who have saved a good portion of their income. Has everyone suddenly forgot about The Millionaire Next Door?

And the extraordinarly wealthy are people who have built completely novel companies. The "old wealth" families decay, and other wealthy people routinely lose their wealth (from bad investments). The Forbes 500 list is an ever-changing carousel. It is all dynamic.

You say:

>Practically the only way to get wealthy is to already have capital.

Yet that's just not true. An absolutely huge chunk of billionaires are self-made and if they aren't self-made, their parents or their grandparents were. You are presenting this as if wealth was handed out by god at the dawn of history and has always remained in the same hands.

The Millionaire Next Door

>Yea, I get triggered by Americans who bitch about money.

You've got to read The Millionaire Next Door, since they touch on this topic and that some of the highest performers are immigrants who know how to budget and aren't sucked into America's consumption culture.

Wealthier people create connections not only on the basis of liking someone but also because they are an advantageous connection. I’ve never met someone who was actually wealthy (not faux wealthy) who looked down on a possible connection because they weren’t wealthy. Anyone can come up, they are looking at the potential.

Just like a real estate investor looks at a messed up piece of property and sees the potential it could be with a bit of renovation, with connections they look beyond the bullshit to see the value.

Loyalty, honesty, respect, responsibility and work ethic are largely personality traits that can’t be bought. They are really turned off by rudeness and bad manners though.

Money is a multiplier it just makes you more of what you already are. Asshole if you’re poor? Multiply that by 100x with money. If you’re a giving person you will be more so with money.

Less wealthy people are usually looking to their friendships for social standing or faux wealth (I.e. keeping up with the joneses) In appearing better off they seem to “have it all” but really don’t.

I’ve seen people not be friends with someone because they didn’t wear designer or drive a nice car. Inside that’s my cue to cut that friendship cordially. I won’t waste my time with people like that.

Rich people keep money in their pockets by not spending it. My great grandmother died with a 22 million dollar estate and would drive to a different grocery store to save 50cents on bread. You don’t get rich by looking rich or living a celebrity lifestyle.

So many people leverage their high income job to look like a multimillionaire but they drown in debt and eventually bankrupt.

I really love this book regarding millionaires and multimillionaires it really paints a real picture of what they are like and it’s nothing like the lives of the rich you see on TV

The Millionaire Next Door: The Surprising Secrets of America's Wealthy https://www.amazon.com/dp/1589795474/ref=cm_sw_r_cp_api_i_YnjjFbAHAMSDR

You might be surprised to find out that you are surrounded by millionaires. You don't accumulate wealth by spending money and you do it by saving money.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

Buy this book and read it: https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474.

> HAHAHAHAHAHA. Vai dizer ao Zé das obras que ele se ele quiser comprar um T2 em Lisboa é só viver de forma frugal uns anitos.

Escolheste um exemplo bastante mau para o teu caso, visto que dentro das 'obras' existem exemplos de pessoas que fazem bastante dinheiro (canalizadores, electricistas e basicamente todos os não trolha).

Mas quem é que te mandou comprar um T2 num sítio sobrevalorizado? Onde é que isso é viver de forma frugal?

>Fonte?

Por exemplo (e o estudo de 1985 que leva a essa citação, penso que esteja publicado no Wall Street Journal).

Mas mais importante que isso, são todos os exemplos de pessoas que alcançaram sucesso financeiro começando do nada. Excluindo pessoas que começaram ricas ou com sucesso através de se tornarem famosas (pessoal da cinematografia, música e desportos), ou através de empresas que só pode realisticamente haver uma (por exemplo no caso do Steve Jobs) assim de cabeça consigo dar-te os exemplos de... hm. . . Warren Buffer, Kevin O'Leary, Graham Stephan, Daymond John, Kevin O' Leary, Kevin Parfath, Kevin Trout, Ralph Lauren, George Soros, Howard Schultz, Leonardo Del Vecchio, Suze Orman e David Murdock.

Todos eles têm uma coisa em comum. Não tinham dinheiro, mas todo o dinheiro que ganhavam era usado para fazer mais dinheiro. E o dinheiro que isso gerava era usado para fazer ainda mais dinheiro. E daí? Ainda mais investimento. Eventualmente todos chegaram ao ponto onde o seu investimento lhes permitia comprar uma mansão e aposentarem-se... e nenhum deles fez isso, mesmo quando começaram a melhorar as suas condições de vida, continuaram a reinvestir.

Dá que pensar.

Most of the so called rich are wealthy, but not just by income. Save and invest savagely and getting some degree of wealth is within most people’s reach. This is an older book, but it still holds true

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

You could not be further from the truth. Read this book. https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

The Millionaire Next Door is a great read for young people.

No. Ramsay's schtick - and a viewpoint that is core to many who subscribe to the American Dream - is that anyone can make of themselves what they want to be.

This perspective is backed by Ramsay's own flawed, but still interesting, survey of millionaires in the US, along with research published in Ramsay acolyte Chris Hogan's "Everyday Millionaires", as well as Thomas Stanley's "The Millionaire Next Door" which confirm that the majority of millionaires interviewed did not inherit significant wealth, but "made it" by working hard, spending less than they earn, and investing wisely for the long-term.

Ramsay advocates earning one's way out of debt, and into wealth. He staunchly rejects relying upon state provided safety nets, "hand-outs", and benefits.

His approach and guidance is a solid plan for those with an unsophisticated approach to money, wealth, investing, etc. Those who most benefit from his guidance are often those who are deeply in debt, mortgaged beyond their means, leveraged to the hilt, and on a path to disaster and misery in later life.

His approach to debt elimination is via the "Debt snowball" is not mathematically optimal, but is psychologically rewarding to - and thus likely to work for - those that are highly motivated by "instant gratification" due to the fact that they're already often neck-deep in student-loan debt, credit card debt, and car loans.

And yes, sadly, a lot of his "guidance" is wrapped up in religious claptrap which many outside the US will find highly off-putting and otherwise discrediting to his approach. But such is life in the US which (feels like) is more "religious" today than it's ever been.

It's worth watching/listening to several of his shows (many of which are freely available on YouTube), just to get a taste of his approach, but understand that his is not the optimal way to achieve financial independence for many who're already responsible with their money and lifestyles.

Top three book I've ever read "The Millionaire Next Door" Idea that they live among us very well off people but live boring, no flashy life style.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474/ref=sr_1_1?dchild=1&keywords=millionaire+next+store&qid=1600458456&sr=8-1

"Rich" in American culture has less to do with income and more with lifestyle. Which is to say, the perception isn't the reality. The guy who works from home in a New York suite might actually be making less money than the guy who lives in a small house and goes to work every morning. This book covers this question in depth:

The Millionaire Next Door: The Surprising Secrets of America's Wealthy

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

OP this is solid advice right here, a little more detail on the saving part: learn to live on less than you earn.

Back in the day, Motley Fool used to have a message board called LBYM. Oh those were good times, it was /r/frugal without drama. Hmm, nevermind, it was awesome, and no longer.

On that note, one book I read when I was in college was Clason's Richest Man in Babylon. It's not complicated, it's just no one (okay few people) actually do this. Along the same lines is The Millionaire Next Door, but I digress.

On the work-side, doing PM or learning how to sell RE or getting into a trade and doing RE improvements is all great advice. You'll learn first-hand how things work. Heck even learning about RE taxes is another killer skill, in the US the tax code treats RE unlike any other asset.

Lastly would strongly encourage you to learn the cheap way, by reading books, rather than the expensive way, either through paying for expensive RE courses or putting your hard-earned money into something sketchy. As the barriers to entry into RE is low (i.e. to get a RE license it doesn't take much effort, plenty of charlatans over the years hawking courses to make money etc) you need to be careful.

Read this book:

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

explains a lot of what's going on.

There's actually a fair amount of evidence against this. There's a book called The Millionaire Next Door that notes that the vast majority of millionaires tend to be a social class below doctors and lawyers, who have so much income that they feel more comfortable using it. The majority of the rich are people who get enough to really save hardcore, but not enough to really blow it hardcore. https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

You can become a one digit millionaire by working hard your whole life, provided you didn't go to school, make near 100k$ despite that, live in the same small town your whole life, married someone without a degree and also working for that much, preferably both working in a business you own and inherited and living in one house your whole life. No restaurant, one car, no expensive activities, one week vacation per year, one or two child, no one sick ever...and provided your evening activities consist mainly of watching TV while drinking tea while your wife is sorting out coupons.

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

Any other scenario include a fat part of blind luck with an idea, a gimmick, a gadget that you were able to leverage with someone else money, or outright stealing or corruption, or flat out inheritance of millions.

Earning such a high figure (in your 20s) and maxing out your 401k/ Roth IRA indicates to me that you are already on a path to future success.

Breathe. You're doing a fantastic job.

If you would like to increase your financial education, I would suggest reading around the topic. Here are my favourite books to recommend:

• The Little Book of Common Sense Investing - John C. Bogle
• The Richest Man In Babylon - George Clarson
• The Millionaire Next Door - Thomas Stanley

Take the arts & crafts job and this is why: You are grinding it out, working hard for a paycheck, only to give it away to another financial institution in the form of interest. Make money work for you. Set aside the extra 8 hours you’ll save by not working at OD to learn all you can about money, how it works, and how to wield control over it. Read. Read. Read. I’d start with: Rich Dad, Poor Dad https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1543626610

The Millionaire Next Door https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474/ref=mp_s_a_1_3?dchild=1&keywords=the+millionaire+next+door+book&qid=1599014746&sprefix=the+millio&sr=8-3, a

What Would The Rockefellers Do? https://www.amazon.com/What-Would-Rockefellers-Do-Wealthy/dp/1717167160/ref=mp_s_a_1_3?dchild=1&keywords=what+would+the+rockefellers+do+book&qid=1599014841&sprefix=what+wo&sr=8-3

The secret the wealthy have is financial education. Well...that, generational wealth, and a system that’s set up to favor the already rich. But I promise, you can learn how to build wealth with research, good advice, and good choices. I commend you on working so hard to get out of debt. Look into how you can stay out of debt and create a system of wealth that you are in control of. Good luck!🍀

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474 and / or https://www.mrmoneymustache.com

Here, how about you let a black man save you for once. :-)

http://brassknucklefinance.com/

https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474/ref=sr_1_1?dchild=1&keywords=the+millionaire+next+door&qid=1592530401&sr=8-1

https://www.amazon.com/Random-Walk-Down-Wall-Street/dp/0393358380/ref=sr_1_1?crid=1C955P84JN3VN&dchild=1&keywords=a+random+walk+down+wall+street&qid=1592530461&sprefix=a+rando%2Caps%2C175&sr=8-1

As much as you won’t want to hear this.... cash is king and you don’t have enough of it yet. You could start putting some money into some growth investments each month, but keep saving cash as well. Check out IVV and ARKK. They are two ETFs that I really like. You can open up an UGMA account at a TD Ameritrade, Schwab, Etrade type place and start an investment portfolio. When you are 18 you can switch it to a regular individual account.

I’d really recommend reading or listening to a handful of books (Links Below):

Rich Dad, Poor Dad

The Richest Man In Babylon

Your Money Counts

Think & Grow Rich

The Millionaire Nextdoor

Tye Motley Fool Investment Guide

Live below your means at whatever income level. Save, save and save your money.

Before you invest, read these books:

1) Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Fully Revised and Updated for 2018 Paperback – December 10, 2008

by Vicki Robin (Author), Joe Dominguez (Author), Mr. Money Mustache (Author)

The Millionaire Next Door: The Surprising Secrets of America's Wealthy

by Thomas J. Stanley and William D. Danko | Nov 16, 2010

YNABin perustajan kirja on hyvä alustus budjetointiin, joka on kaiken perusta:
Jesse Mecham: You Need a Budget

Omia suosikkiperusteoksia henkilökohtaisesta taloudesta ja varallisuuden kerryttämisestä:
J L Collins - The Simple Path to Wealth

Ramit Sethi - I will teach you to be rich

Thomas J. Stanley - The Millionaire Next Door

Thomas J. Stanley - The Millionaire Mind

Vicki Robin - Your Money or Your Life

Ja velkahelvetistä selviämiseen tuo jo mainittu
Dave Ramsey - Total Money Makeover

I was in the same boat, but I didn't get activated into this desire until after high school, when I was working in food service & realized I really didn't want to have to hustle for the rest of my life. I worked various manual-labor & retail jobs around that time & realized that dealing with the public & relying on my body & until retirement wasn't the path I personally wanted to be on.

Along the way, I learned how managing my energy worked & how managing my productivity worked, so that I could feel good, get organized, get stuff done, and enjoy doing it.

>Another side note: $1,000,000 is barely enough to be set for life nowadays (with EXTREMELY smart investments), let alone enough to spend on nice cars, vacation homes, etc. You probably need $2,000,000-$3,000,000 before you can splurge on nice stuff like that and still not have to work.

You may be interested in FIRE:

• https://www.reddit.com/r/financialindependence/
• https://www.reddit.com/r/fatFIRE/
• https://www.reddit.com/r/leanfire/

This stuff is all based on the Trinity Study:

• https://en.wikipedia.org/wiki/Trinity_study

Summary of FIRE:

• https://en.wikipedia.org/wiki/FIRE_movement

If you're interested in this stuff, I would highly recommend getting a copy of "The Millionaire Next Door" book & really diving into it.

• https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474

The book addresses two core ideas:

1. The story of how people go from a regular income or even a poor background to becoming wealthy
2. The principles involved in doing so

The book is based on a tremendous amount of research. Summary of the main ideas here:

• https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

A few key points here:

• https://www.businessinsider.com/personal-finance/the-millionaire-next-door-unexpected-facts-i-learned

The combination of learning about FIRE & learning the resultant principles discovered from studying massive amounts of millionaires in the Millionaire Next Door book may be a good rabbit-hole for you to dive into.

If you're having trouble feeling motivated about school & about your hobbies, personal financial growth & education may be something worthwhile to dig into to both keep yourself occupied right now & also to generate some long-term goals that you personally care about.

The key thing understanding is that everything is out there for the taking; they literally print money every day, mass-manufacture cars & food & video game consoles; the only thing holding you back is you doing some planning & putting in some consistent effort every day to getting what you want.

So if you are willing to do some personal planning & put in the effort, even when you're not in the mood, then good things start to happen because actions have consequences. Unfortunately, most people don't care enough to make a plan, let alone put in consistent levels of effort every day, so most people have dreams but don't want to work to make them happen, which is why we have /r/productivity - to learn the principles of productivity & motivate each other to reach our goals!