by Dr. Thomas J. Stanley, published 2001, 406 pages
(follow-up to The Millionaire Next Door)
Fascinating book, and the best note came at the end: "Getting up earlier than others ... does not take a great deal of intelligence ... It's not what time people start their workday or get up in the morning that makes them financially successful - it's how productive they are during the working hours that counts. There is no statistically significant correlation between the time one wakes up in the morning and one's wealth"
This book is the author's interpretation of the answers over 1600 millionaires gave to his 9 page questionnaire in 1998. I stress 'interpretation' because these results are not hard facts and many times I discounted his conclusions. He also uses very slanted language to make his case look stronger. Nevertheless, the insights are probably valid and very interesting. I think I turned down the corners of half of the pages in the book. (That's my way of noting what I think is an interesting or important point.) Another gripe: He doesn't do a good job of defining exactly what he means when he says "economically productive" (which he does a lot) and how that phrase is intended to differ from "rich" or "millionaire."
Dr. Stanley says that those who are willing to work through adversity in their marriage and are committed to each other will use the same traits to succeed financially. Millionaires tend not to be single or get divorced and have, on average, 3 children. The top five qualities that millionaires say initially attracted them to their spouse are intelligence, sincerity, cheerfulness, reliability, and affectionate.
The book mentions education in a similar way to Robert Kiyosaki, (primary author of the "Rich Dad, Poor Dad" series) basically stating that the students who get good grades in our schools are not prepared for financial success, or risk taking, and that high SAT scores and grades do not correlate to wealth except in occupations that require advanced degrees such as law and medicine. Dr. Stanley believes that learning how to conform to the standards of success in school does not prepare one to deal with the adversity faced in the business world.
Here are a few highlights: (with my comments in parenthesis) (I love using parenthesis.)
Five most common factors cited by millionaires as contributing to their success:
Quotes:
"The really brilliant millionaires are those who selected a vocation that they love - one that has few competitors but generates high profits"
"Those with a net worth of ten million or more have the highest incidence of regular exercise." (See the discipline/self control item above!)
"The number one 'leisure' (ie non-work) activity is consulting with a tax expert."
"There is a very strong negative correlation between do-it-yourself activities (mowing the lawn, home repair, doing your own taxes, investing) and wealth."
"The typical millionaire earns the equivalent of about $300.00 per hour. Decamillionaires (those who have more than 10 million) earn the equivalent of about $1000.00 per hour." (Time is money!)
"Financially successful people and the next generation of economically productive people volunteer. If you wish to become affluent, associate with economically productive people."
"Being an employee smothers the fire in one's gut."
"[Working for others] may actually put you at greater risk... Having a single source of income... You are not doing things that are in your own best [economic] interest for you to become successful in terms of becoming wealthy... You are merely doing what is in the best interest of an employer."
"Not all millionaires wear suits (to work each day.)"
"I have never interviewed one business owner who is not cost sensitive."
"Most millionaires told me that they had several other jobs before they found the ideal one."
"Millionaires frequently 'bargain shop' for their own home at foreclosures, auctions, and estate sales."
Tips on home buying from millionaires: (for buying a home to maximize the likelihood of appreciation)
-Be willing to walk away from the deal at any time -Never pay the initial asking price -Research the prices of recent home sales in the neighborhood -Never try to purchase a home in a short period of time (allow plenty of time for the right opportunity to show up, don't rush to buy) -Search for a neighborhood that has good public schools -Purchase a home that is easily affordable (for you) -Don't have a home custom built
"There is a strong correlation between net worth and the proportion of one's wealth that is invested in real estate."
(Obviously there is a lot more in the 406 pages of the book, but here is the recap provided by the author at the end of the text)
"Keep in mind the eight important elements of the economic success equation:
1. Understand the key success factors our economy continues and will continue to reward: hard work, integrity, and focus.
2. Never allow a lackluster academic record to stand in the way of becoming economically productive.
3. Have the courage to take some financial risk. And learn how to overcome defeat.
4. Select a vocation that is not only unique and profitable; pick one you love.
5. Be careful in selecting a spouse. Those who are economically productive married husbands or wives who had the characteristics that are compatible with success.
6. Operate an economically productive household. Many millionaires prefer to repair or refinish rather than buy new.
7. Follow the lead of millionaires when selecting a home. Study, search, and negotiate aggressively.
8. Adopt a balanced lifestyle. Many millionaires are cheap dates. It does not take a lot of money to enjoy the company of your family and friends."
Books recommended by Dr. Stanley:
The Power of Positive Thinking by Dr. Norman Vincent Peale
Successful Intelligence by Robert J. Sternberg
The Magic of Thinking Big by David Schwartz (review coming soon!)
Also by Dr. Thomas Stanley:
The Millionaire Next Door
Marketing To The Affluent
Selling to the Affluent
Millionaire Women Next Door: The Many Journeys of Successful American Women