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THE MILLIONAIRE NEXT DOOR. 32 Observations. 1 – Inconspicuous Lifestyle. Inconspicuous Lifestyle. Lifestyle. 2 - Mentor. Inconspicuous Lifestyle Mentor. Example of success. No commission or profit from advice. Tax advisors preferred. Example - CPA. Mentor.

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The millionaire next door

THE MILLIONAIRE NEXT DOOR

32 Observations


1 inconspicuous lifestyle
1 – InconspicuousLifestyle

Inconspicuous Lifestyle

Lifestyle


2 mentor
2 - Mentor

Inconspicuous Lifestyle

Mentor

Example of success

No commission or profit from advice

Tax advisors preferred

Example - CPA

Mentor


Inconspicuous Lifestyle

Mentor

Modest House

3 - Modest House

Often a ‘starter’ home

In a middle class neighborhood

Modest Home

My wise father said to me,

“Get a modest home and

pay off the mortgage . . .

Gordon B. Hinckley


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

4 - High Instance of

Home Ownership

97% of millionaires are homeowners

Home Ownership


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

5 - Dr. North (PAW)vs Dr. South (UAW)

Can you live like Dr. North

PAW -vs- UAW

Can you see how easy it is tobecome Dr. South


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

6 - Education

Income

Accumulation

Education

Income

Income

Accumulation

Physicians

CPAs

Home Builders

Education

Income

Dentists

Financial Advisors

Actors

Orthodontists

Stock Brokers

Artists

Attorneys

Insurance Agents

Musicians

Provide Professional Services for a Fee


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

7 – Income – vs – net worth

def. – Net Worth

Financial Assets

Income

-vs-

Net Worth

– Liabilities (debts)

= Net Worth


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

8 - First Generation Millionaires

At a disadvantage:

85% are first generation!

Second generation millionaires

Inheritance

‘Overnight’ millionaires

Odds of being an overnight millionaire

One in four thousand


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

9 – Inheritances

More than 50%

Never receive $1

Inheritance

Majority of

inheritances

Gone by the third generation


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

10 – Economic Outpatient Care

Less than 2.5%

Ever received more than a $10,000 in gifts

Never received any education financial assistance from any relative

More than 50%

Economic OutpatientCare

EOC to Adult Children – Rarely Given

The more assistance adult children receive

the less likely they are to accumulate


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

Monthly Payments

11 – Monthly Payments

To pay . . .

curse

MonthlyPayments

To receive . . .

Million Dollar ChoiceTM


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

Monthly Payments

Budget – Intense

12 – Budget

Budget

Intense focus on knowingwhere money is spent


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

Monthly Payments

Budget – Intense

Shoppers – Not Intense

13 – Shoppers

Shopper?

Not extensive time and energy spent

Very aware of where to find a ‘good deal’

Love NOT giving away their money


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

Monthly Payments

Budget – Intense

Shoppers – Not Intense

Higher Education

14 – Higher Education

80% are well educated

No guarantee offinancial success

Education


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

Monthly Payments

Budget – Intense

Shoppers – Not Intense

Higher Education

Higher Education for Children

15 – Higher EducationSpending on Children

Education

“We spend well for theeducation of our children?”


JOY of Prudence and Frugality

16 – JOY of Prudenceand Frugality

Delaying Gratification

Lifestyle of Prudence

Or

Developing a Healthy

Preferred Lifestyle


JOY of Prudence and Frugality

UAW / AAW / PAW

17 - UAW AAW PAWAsset Formula

Current age

(x)

Current income

___________________________

What Your Current Net Worth Should Be

=

10

45

(x)

$ 100,000

________________

= $ 450,000

10

Underachiever UAW

$ 450,000

PAW

Asset

Formula

=

Average Accumulator AAW

$ 450,000

Prodigious Accumulator PAW

$ 900,000


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

18 - Spouse Significance

87% leading cause ofAmerican divorces – moneyAmerican Bar Association

I am satisfied that money

is the root of more trouble in marriage

than all other causes combined.

Your Spouse

Gordon B. Hinckley

Cornerstones of a Happy Home


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

19 – Marrying the Right Person

Very Important + Important

84%

Your Spouse

I married the right personMillionaire Mind


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

20 - Divorce Rate

One-half national average

Divorce


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

21 - ‘Working’ Spouse

Rarely worked

‘Working’Spouse

No time consuming

professional careers


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

22 - The ‘Better than My Life’ Syndrome

“I want your life to be better than mine”

We forget how we built our resources

A

Better

Life?

We ‘encourage’ inefficient professional lifestyles

Children likely to spend to meet the ‘expectation’


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

23 - Self Employment

Two-thirds of all millionaires are self employed

Self-Employment


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

24 - How Muchto Save

Millionaires Save

At least

15%

Savings

Average of

20%

Joseph to Pharoah- take up a ‘fifth part’ . . .

Genesis 41:34


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

25 - Investment Rules

  • Long - term

  • Familiarity with company or industry

Investment Rules

  • “Dull / Normal” investments

  • Twelve per-cent return over the past 10 years

  • Increasing Dividends each quarter

  • Same Management Team


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

26 - Purchasing Habits

Rarely purchase:

Brand names

PurchasingHabits

Expensive items

“I can’t get my wife to spend any money”

  • Being frugal –

    • a cornerstone to accumulation


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

The Most Profitable Business

27 - Most Profitable

Businesses

Begin with what already works

Sole proprietorships:

15 million only made $6,200

25% made no profit

Profitable Business

Partnerships - 42% made no profit

Corporations - 45% made no profit

The Most Profitable Business

The One that Compels you Most!


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

The Most Profitable Business

Estate Objectives

28 - Estate Objectives

Discipline

Ambition

Independence

Estate Objectives


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

The Most Profitable Business

Estate Objectives

Non-Beneficiary Executor

29 - Non-beneficiary

Estate Executor

7 out of 10 namednon-beneficiary as executor

Estate


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

The Most Profitable Business

Estate Objectives

Non-Beneficiary Executor

In-Law Conflicts

30 – In-Law Conflicts

Majority of family financial conflicts

Best In-Laws – stay out

In-Laws in Estate


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

The Most Profitable Business

Estate Objectives

Non-Beneficiary Executor

In-Law Conflicts

Live Life WELL Below Means

31 – Live Life WELLBelow Means

Live Below Means


JOY of Prudence and Frugality

UAW / AAW / PAW

Spouse Significance

Marrying the Right Person

Divorce Rate

‘Working’ Spouse

‘Better than my life’ Syndrome

Self Employment

How Much to Save

Investment Rules

Purchasing Habits

The Most Profitable Business

Estate Objectives

Non-Beneficiary Executor

In-Law Conflicts

Live Life WELL Below Means

Life of DISCIPLINE, SACRIFICE, HARD WORK

32 – Life of DISCIPLINE,SACRIFICE & HARD WORK

Hard Work


Inconspicuous Lifestyle

Mentor

Modest House

High % of Home Ownership

Dr. North (PAW) – Dr. South (UAW)

Education / Income / Accumulation

Income – vs – Net Worth

First Generation Millionaires

Inheritances

Economic Outpatient Care

Monthly Payments

Budget – Intense

Shoppers – Not Intense

Higher Education – 80%

Higher Education for Children

JOY of Prudence and Frugality

UAW AAW PAW

Spouse Significance

Marrying the Right Person

Divorce Rate ½ the National Average

‘Working’ Spouses – Rare

‘Better than Mine’ Syndrome

Self Employment

How Much to Save – Average 20%

Investment Rules

Purchasing Habits

The Most Profitable Businesses

Estate Objectives

Non Beneficiary Executor

In-Law Conflicts

Live Life WELL Below Means

Life of DISCIPLINE, SACRIFICE, HARD WORK


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