Officer Next Door / Teacher Next Door (OND/TND) Program Evaluation
The Millionaire Next Door
description
Transcript of The Millionaire Next Door
The Millionair
e Next Door
32 Observations
1 – Inconspicuous
Lifestyle
1. Inconspicuous Lifestyle
2 - Mentor
Example of successNo commission or profit from advice
Tax advisors preferredExample - CPA
1. Inconspicuous Lifestyle2. Mentor
3 - Modest House
Often a ‘starter’ home
In a middle class neighborhood
My wise father said to me,“Get a modest home andpay off the mortgage . . .
Gordon B. Hinckley
1. Inconspicuous Lifestyle2. Mentor3. Modest House
97% of millionaires are homeowners
4 - High Instance ofHome Ownership
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership
5 - Dr. North (PAW)
vs Dr. South (UAW)
Can you live like Dr. North
Can you see how easy it is to
become Dr. South
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)
6 - EducationIncome
AccumulationEducatio
nIncom
eIncom
eAccumulati
onPhysicia
nsDentistsOrthodonti
stsAttorneys
CPAsFinancial AdvisorsStock BrokersInsurance Agents
Home BuildersActorsArtistsMusicians
Provide Professional Services for a Fee
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation
7 – Income – vs – net worth
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth
def. – Net WorthFinancial Assets
– Liabilities (debts)= Net Worth
8 - First Generation Millionaires
85% are first generation!
Second generation millionaires
At a disadvantage:
‘Overnight’ millionaires
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires
Odds of being an overnight millionaireOne in four thousand
9 – Inheritances
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances
More than 50%Never receive $1Majority of inheritances
Gone by the third generation
10 – Economic Outpatient Care
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient CareLess than 2.5%Ever received more than a
$10,000 in giftsMore than 50%Never received any education financialassistance from any relativeEOC to Adult Children – Rarely GivenThe more assistance adult children
receivethe less likely they are to accumulate
11 – Monthly Payments
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments To pay . . .
curseTo receive . . .
Million Dollar ChoiceTM
12 – Budget
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense
Intense focus on knowing
where money is spent
13 – Shoppers
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense
Not extensive time and energy spent
Love NOT giving away their moneyVery aware of where to find a ‘good deal’
14 – Higher Education
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense14.Higher Education
80% are well educated
No guarantee offinancial success
15 – Higher Education
Spending on Children
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South
(UAW)6. Education / Income /
Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense14.Higher Education15.Higher Education for Children
“We spend well for theeducation of our children?”
16 – JOY of Prudence
and Frugality
16.JOY of Prudence and Frugality
Delaying GratificationOr
Developing a HealthyPreferred Lifestyle
16.JOY of Prudence and Frugality17.UAW / AAW / PAW
17 - UAW AAW PAWAsset Formula
Current ageCurrent income(x)___________________________10
What Your Current Net Worth Should Be
$ 100,000(x)10 = $ 450,000
$ 450,000$ 450,000$ 900,000
Underachiever UAWAverage Accumulator AAWProdigious Accumulator PAW
=
=
45________________
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance
87% leading cause ofAmerican divorces –
money American Bar
Association
18 - Spouse Significance
I am satisfied that moneyis the root of more trouble in marriage
than all other causes combined.Gordon B. Hinckley
Cornerstones of a Happy Home
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person
19 – Marrying the Right PersonVery Important + Important
I married the right personMillionaire Mind
84%
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate
20 - Divorce Rate
One-half national average
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse
Rarely worked21 - ‘Working’ Spouse
No time consuming professional careers
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘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
Children likely to spend to meet the ‘expectation’We ‘encourage’ inefficient professional lifestyles
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment
23 - Self EmploymentTwo-thirds of all millionaires are self employed
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save
24 - How Much
to SaveMillionaires Save
At least 15%Average of 20%
Joseph to Pharoah - take up a ‘fifth part’ . . . Genesis 41:34
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules 25 - Investment
Rules Familiarity with company or industry
“Dull / Normal” investments Twelve per-cent return over the
past 10 years Increasing Dividends each quarter Same Management Team
Long - term
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits
Rarely purchase:
26 - Purchasing Habits
“I can’t get my wife to spend any money”Being frugal –
a cornerstone to accumulation
Brand namesExpensive items
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business
27 - Most ProfitableBusinesses
Begin with what already worksSole proprietorships:
15 million only made $6,20025% made no profit
Partnerships - 42% made no profitCorporations - 45% made no profit
The Most Profitable BusinessThe One that Compels you Most!
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives
28 - Estate Objectives
AmbitionDiscipline
Independence
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor 29 - Non-beneficiary
Estate Executor7 out of 10 named
non-beneficiary as executor
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor30.In-Law Conflicts
30 – In-Law Conflicts
Majority of family financial conflictsBest In-Laws – stay out
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor30.In-Law Conflicts31.Live Life WELL Below Means
31 – Live Life WELL
Below Means
16.JOY of Prudence and Frugality17.UAW / AAW / PAW18.Spouse Significance19.Marrying the Right Person 20.Divorce Rate21.‘Working’ Spouse22.‘Better than my life’ Syndrome23.Self Employment24.How Much to Save25.Investment Rules26.Purchasing Habits27.The Most Profitable Business28.Estate Objectives29.Non-Beneficiary Executor30.In-Law Conflicts31.Live Life WELL Below Means32.Life of DISCIPLINE,
SACRIFICE, HARD WORK
32 – Life ofDISCIPLIN
ESACRIFICE
HARD WORK
1. Inconspicuous Lifestyle2. Mentor3. Modest House4. High % of Home Ownership5. Dr. North (PAW) – Dr. South (UAW)6. Education / Income / Accumulation7. Income – vs – Net Worth8. First Generation Millionaires9. Inheritances10.Economic Outpatient Care11.Monthly Payments12.Budget – Intense13.Shoppers – Not Intense14.Higher Education – 80%15.Higher Education for Children16.JOY of Prudence and Frugality17.UAW AAW PAW18.Spouse Significance19.Marrying the Right Person20.Divorce Rate ½ the National Average21.‘Working’ Spouses – Rare22.‘Better than Mine’ Syndrome23.Self Employment24.How Much to Save – Average 20%25.Investment Rules26.Purchasing Habits27.The Most Profitable Businesses28.Estate Objectives29.Non Beneficiary Executor30.In-Law Conflicts31.Live Life WELL Below Means32.Life of DISCIPLINE, SACRIFICE, HARD
WORK