Tuesday, July 26, 2016

How to live like a millionaire

A few years ago I read a book (suggested by my financial advisor) about how people who are millionaires actually live.  It was titled The Millionaire Next Door:  The Surprising Secrets of America's Wealthy by Thomas J. Stanley.

What I learned from this book I actually watched my parents live my entire life and boils down to a few things:

1. Live as if you aren't wealthy (within your means)
2. Pay off your house (don't keep upgrading to bigger and better with granite this and that)
3. Don't buy new cars or if you them forever and ever and ever
4. Pay yourself first (in savings/investments/401k)

(These are not in order of importance.  If they were, #4 would move to #1.)

For my undergraduate degree, I double majored in English and Economics.  Teaching literature is my first love, but teaching personal finance would probably be a close second (although I don't get an opportunity to do this).  I think it is a terrible flaw in our education system that we don't teach young people about the importance of saving and spending wisely.

My financial advisor, Hank, and and I have talked (perhaps dreamily) about writing an article together about our partnership to achieve wealth.  This partnership has involved me and D mapping our goals, sticking to them, with Hank cheering us on and offering guidance as needed.

I know some "millionaires," but they do not look like millionaires.  They are people who have families, who have modest homes with well-worn furniture, who have old cars and who shop at Target and Payless.  They use coupons and buy at consignment shops.  On paper, they are millionaires, but they do not live lavishly.

Most importantly, they do not get everything they want.  They make a lot of thoughtful choices and are willing to delay gratification.  They also know their priorities and do not allow other distractions to infringe on their priorities.

My priorities have always been to be home with my children and to take vacations with them.  But due to my not working, we didn't go on vacation every year or every other year (beyond a day trip).  We went to the beach when I was 5 months pregnant with M, and we did not go to the beach again until M was almost 4.

Since my priority is making memories on vacations, we do not go to movies.  We do not go to church picnics.  We do not go to entertainment venues with bowling and arcades.  We do not go to the state fair and ride the amusement rides.  We do not go see concerts or theater performances often.  We do not do other things that would keep us from funneling money into saving for vacations.  We do as much free stuff as possible, like taking hikes at the park and going to the local playground.

Other things we've done to save money (not specifically to save for vacation but to save for whatever)---

*We got rid of cable/satellite television long ago.  We spend $18 a month on Netflix.

*I didn't get a smart phone until April 2015 (thereby not having a monthly bill for many years).

*N doesn't have a cell phone and won't get one until high school (or that is the plan anyway) so we don't have that monthly bill.

*We don't eat a whole lot of meat.  We never eat steak, not because we don't like steak, but because it is so expensive.

*D's car is 15 years old.  Mine is 7 (and we're planning to drive it another 7, hopefully.)

*We use the public library.  If we do buy a book or a DVD, we generally get it gently used from

Are there times when it would be easier or nicer or more convenient to just pay $15 at Target for the novel my bookclub is reading?  Yes....but that would cost $15, and so I wait patiently for it from the library.

Becoming a millionaire isn't fun or lively or exciting, but I like to think that it will, ultimately, be worth it.  

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