Monday, April 03, 2006

The Millionaire Next Door

I used my last free book from Audible.com to download The Millionaire Next Door by Thomas J. Stanley.

Stanley documents seven common denominators among those who succesfully built wealth. Here they are along with my assessment of how my family is doing on each factor:
1. They live well below their means. I think we're doing okay, but need to do better. We currently live on about 70 percent of my take home pay. The rest goes to investments and debt reduction. We're still looking for ways to cut our budget and increase our income.
2. They allocate their time, energy and money efficiently; in ways conducive to building wealth. This is something we don't do very well. That's part of the reason I started this blog is because I realize that we need to dedicate more of our resources to this.
3. They believe that financial independence is more important than displaying high social status. I drive a 1988 Toyota. Enough said.
4. Their parents did not provide economic out-patient care. My grand-parents paid for my college education and my parents are doing the same for my kids, but we don't depend on either of our parents for our economic survival.
5. Their adult children are economically self-sufficient. My eldest will turn four next month. The last thing I want for her is to be economically self-sufficient right now.
6. They are proficient in targeting market opportunities. I need to get better at this. I'm trying to start thinking like an entrepreneur and investor.
7. They chose the right occupation. I like what I'm doing, but the jury is still out on this one.

I'm about a third of the way through the book and thoroughly enjoying it. It's well worth the read...er, listen.