When authors Tom Stanley and William Danko wanted to know how people became wealthy, their research turned up something odd.
What they found was, many of the people who live in upscale neighborhoods and drive luxurious cars were actually living double lives. Although they had the outward appearance of wealth, they were not actually wealthy. As we say here in Texas, they have a big hat but no cattle!
And to make things even more confusing, the authors’ research uncovered many people who actually were wealthy but who weren’t living in upscale neighborhoods or driving fancy cars.
Indeed the findings in their book The Millionaire Next Door are counter intuitive to what many people thought about the wealthy.
If you watch TV for even a short period of time, it would be easy to conclude that millionaires all drive a Mercedes, wear Rolexes and have multiple homes.
But most millionaires – individuals with a net worth of $1 million or more – live an entirely different lifestyle than this. Stanley found that the vast majority of millionaires:
-Live in a modest house.
-Don’t own a second home.
-Have never owned a boat.
-Are more likely to wear a Timex than a Rolex.
-Are more likely to drive a Nissan than a Mercedes.
-Have never paid more than $400 for a suit.
-Spend very little on prestige brands and luxury items.
This is certainly not the TV image of wealth is it? But, this is the life of an average millionaire.
You might be wondering something – if millionaires aren’t the ones buying all the expensive homes and cars, well who is?
The answer – “aspirationals” – people who act rich, want to be rich, but really aren’t rich. The people who are so concerned with not looking average, that they’ll spend themselves into debt trying to look better than average.
And here’s the thing – these aren’t people with a low income. Many are well educated and earning a six figure income. Like so many others though, they believe that the more they spend, the more they will look successful.
According to Dr. Stanley, “The pseudo-affluent are insecure about how they rank among the Joneses and the Smiths. Often their self-esteem rests on quicksand. In their minds, it is closely tied to how long they can continue to purchase the trappings of wealth. They strongly believe all economically successful people display their success through prestige products. The flip side of this has them believing that people who do not own prestige brands are not successful.”
There’s a better way.
Simply put, the average millionaire does things differently. Most of them became wealthy by avoiding the very actions of the ‘wealthy wannabes’. They made the most income possible. They minimized their expenses so that they could save. And they invested their money in smart investments.
So while millions of people spend their way to a false image of success, my advice is to be different. Instead of spending like the aspirational millionaire, spend like the average millionaire. They’re the ones who are living below their means and are enjoying the satisfaction and peace of mind that comes with financial freedom.
Now, before anyone shrugs their shoulders and says, “Average, meh…”, you should know this…
The average millionaire does not live an average lifestyle – they are able to do what they want, when they want, where they want, and with whom they want. They’re free.
So, the question is this – Are you willing to be average, average enough to be financially free?
Be free. Nothing else is worth it.
P.S. Why aren’t you wealthy yet? It’s because of something you don’t know. Otherwise you’d already be rich. Isn’t it time to learn what you don’t know? Consider signing-up for my newsletter below, to help you build wealth faster.
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Ready for more tips on how to achieve the free life? Check-out more articles from the blog archives below: