Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: Book Report - Millionaire next door
Old 08-28-2004, 09:05 AM   #21
Thinks s/he gets paid by the post
wabmester's Avatar
 
Join Date: Dec 2003
Posts: 4,459
Re: Book Report - Millionaire next door

Quote:
... but this makes a huge amount more sense to me now.
I think I missed the logic that caused your lightbulb to glow. Could you elaborate?

In any case, I don't find it surprising that immigrants of all stripes are more entrepreneurial than non-immigrants. Consider what it takes to be a successful entrepreneur: risk-taking, vision, perserverence. Essentially the same qualities needed to pull up your roots and look for a better life in another country.

There were several waves of immigration into this country, including lots of eastern european jews escaping persecution in the early 1900s and around WW-II. But also including a newer wave after the USSR broke up.

My guess is that most of them will end up millionaires, but the newest wave is probably still ramping up to that status.
__________________

__________________
wabmester is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Book Report - Millionaire next door
Old 09-08-2004, 09:53 AM   #22
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

Quote:
Their reaction was to scoff at the very idea of Chevys being popular with the rich.
Depending on the point of view of what one means by "rich", they could be right. I read TMND myself, and i certainly acknowledge that "millionairres" are often the frugal ones as that book states. I "might" call these people moderately wealthy today, but if anyone today is past 50 years old and only worth 1 mil, i'd hardly call them "rich" and i'd hesitantly refer to them as wealthy.

IMHO, a "rich" people have so much money, they can afford to both live lavishly as well as amass capital. In contrast, someone's who's middle class but has managed to get 1mil+ in net worth by age 50 today is better characterized as simply a miser (or frugal) unless they inherited the money by some means. AFAIK, if you cant "afford" to spend lavishly, you ain't rich

Granted, even this wont be true 10-20 years from now as, by then, 1 mil really wont be that impressive at all, nor hard to obtain. A standard 10% savings as a middle class should get you a mil in 30 years or so.
__________________

__________________
azanon is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-08-2004, 04:57 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Mar 2004
Posts: 1,318
Re: Book Report - Millionaire next door

I think azanon raises a good point: is the whole TMND premise really a straw man talking not about anyone actually rich, but just about frugal business owners and professionals who keep living style more or less the same even as their economic fortunes increase?

Still there is value imho, since even if not 'rich', they (we) do still represent the top 5% or so of families on a wealth basis, which is still meaningful. There are lots of people worse off financially (pretty much everybody in the world on a percentage basis).

So even if a few super-rich do have real wealth and also buy flashy consumer items, the realization that plenty of people live below their means is a bit of an eye-opener in our hyper-consumptive society, and validation for those of us seeking or living FIRE and living the way we do on this board.

Wab, re: the number of russian heritage millionaires being up there with the scottish... and then my hearing from someone (one of my israeli friends, I think) that this was probably shorthand for Jewish people in the US -- what made sense is that I do know plenty of successful wealthy jewish people, but know almost no "Russians", successful or not, which had puzzled me when I first read the book. I think this is just one of those artifacts of how questionnaires get put together -- and efforts to distribute people based on geographic heritage . (Though we probably won't see broad uptake on beginning to speak of jewish people as "Russian-Americans" akin to Italian-Americans or African-Americans)

ESRBob
__________________
ER for 10 years; living off 4.3% of savings (and a few book royalties ;-)
ESRBob is offline   Reply With Quote
Yeah, but it's fun to read about that stuff...
Old 09-08-2004, 07:05 PM   #24
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Yeah, but it's fun to read about that stuff...

... when your spouse is a Russian Jew and your ancestors include Scots.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-09-2004, 11:01 AM   #25
Dryer sheet aficionado
 
Join Date: Mar 2004
Posts: 34
Re: Book Report - Millionaire next door

Quote:
I think azanon raises a good point: is the whole TMND premise really a straw man talking not about anyone actually rich, but just about frugal business owners and professionals who keep living style more or less the same even as their economic fortunes increase?

Still there is value imho, since even if not 'rich', they (we) do still represent the top 5% or so of families on a wealth basis, which is still meaningful. There are lots of people worse off financially (pretty much everybody in the world on a percentage basis)...
Certainly "rich" is a relative term. But just ask anyone with the mean US household income (~$41K) if someone with $1-2M net worth is rich, and I am pretty certain I know what the answer will be.

My point in the earlier post was that some folks are just not wired to even consider the possibility that lots of people who can afford to buy luxury "status" items choose not to, and that they end up a lot better off due to that choice.
__________________
Pennhaven is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-09-2004, 01:26 PM   #26
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 961
Re: Book Report - Millionaire next door

I have yet to read the book, but I had a question

Question(s): Did the authors take already existing millionares (sp) and see what similar characteristics/habits they had? Did the authors also look to see if people with same characteristics/habits did not become millionares? Or did they only look at the survivors?

Just curious,
- Alec
__________________
ats5g is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-09-2004, 01:35 PM   #27
 
Posts: n/a
Re: Book Report - Millionaire next door

Quote:
I have yet to read the book, but I had a question

Question(s): Did the authors take already existing millionares (sp) and see what similar characteristics/habits they had? Did the authors also look to see if people with same characteristics/habits did not become millionares? Or did they only look at the survivors?

Just curious,
- Alec

The book just looked at survivors. I think you have made a good point though. Life throws people plenty of curve balls. You can do everything right and have some medical job problems or others and not reach Financial Independence.

I really believe that people are not in as much control as they like to think. You always hear from the ones that succeded. They tout that everyone can do it, but it's just not true. It is gratifying to them that they made it and someone else didn't. But the luck of the draw has more to do with it than they'd like to think. Most of us were born into families in the U.S. that provided an education, health care and a standard of living to pursue a career.

The people that really know how to stretch a dollar live in the poorest sections of 3rd world countries.

I read the book and thought it was pretty marginal compared to other books out there.
__________________
  Reply With Quote
Re: Book Report - Millionaire next door
Old 09-09-2004, 06:01 PM   #28
 
Posts: n/a
Re: Book Report - Millionaire next door

Better watch it there. This sounds like "Class Warfare" talk.

Cut-Throat

Quote:
The book just looked at survivors. I think you have made a good point though. Life throws people plenty of curve balls. You can do everything right and have some medical job problems or others and not reach Financial Independence.

I really believe that people are not in as much control as they like to think. You always hear from the ones that succeded. They tout that everyone can do it, but it's just not true. It is gratifying to them that they made it and someone else didn't. But the luck of the draw has more to do with it than they'd like to think. Most of us were born into families in the U.S. that provided an education, health care and a standard of living to pursue a career.

The people that really know how to stretch a dollar live in the poorest sections of 3rd world countries.

I read the book and thought it was pretty marginal compared to other books out there.
__________________
  Reply With Quote
Re: Book Report - Millionaire next door
Old 09-09-2004, 06:12 PM   #29
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Book Report - Millionaire next door

Quote:
I really believe that people are not in as much control as they like to think.
Aint that the truth. My destination here is the result of a lot of fantastically unlikely events that were far more chance than direction. I guess the whole point is how well you take advantage of events, both exploiting the good and minimizing the bad.

__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 06:20 AM   #30
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

Quote:
Certainly "rich" is a relative term. But just ask anyone with the mean US household income (~$41K) if someone with $1-2M net worth is rich, and I am pretty certain I know what the answer will be.
First, the mean US household income today is actually in the mid 60s. *If you want a source, i can find you one. *That's not to be confused with the mean annual salary for one working individual. *

Back on point though, anyone means everyone and I told you my answer...... it wasnt "rich". *

Case in point:

My dad (59) is worth approximately 2 million right now. * I can assure you he isnt rich. *He is a typical TMND, makes about 150k per year. *Oh sure he has a nice house (3500square feet), and drives a relatively new car. *But rich? *That's a little overboard. * 2 million is about what he needs to retire on and not work anymore given his and mom's annual expenditures of roughly 75-80K/year. *If he retired now, he'd probably maintain that standard of living give or take. *That being the case, 75k/year in spending, IMHO, certainly doesnt qualify one as being rich. * Upper-middle class would be the highest descriptor i'd use.

Now, if one were 25 years old and had 2 million; *ok i'm with ya there; *he's rich. *hehe
__________________
azanon is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 06:40 AM   #31
 
Posts: n/a
Re: Book Report - Millionaire next door

Hello azanon. "Rich" is a pretty vague term at best,
but your dad is super rich in my dictionary. Although
I've hobnobbed with plenty of wealthy folk, nobody in
my family tree at any time was even close to a
million bucks. Take my granddad (either side). These
guys did about what they wanted their whole lives,
had a lot of fun and never left anything for their heirs.
Were they "rich"? Not in the coin of the realm maybe.

John Galt
__________________
  Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 07:09 AM   #32
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

Yeah but that's just the thing; he got that way because he's been frugal all his life, all while I was growing up, to even now. Heck, getting the man to spend money on any kind of pleasure is harder than pulling teeth. Case and point; i tried to get the man to get satellite internet (he lives in the country) and a LCD TV recently. But NOO.. his 27" regular tube is just fine (despite the fact he spends 3+ hours watching it at night), and as for the satellite internet, he'd have to pay an installer 100 bucks to come install necessary components and cut some trees downs that are blocking his signal. So there goes that!!!

What i'm getting at is that, is that he wouldnt have 2 million had he not always been frugal. Yes i agree rich is relative, but i just dont see how its very accurate to call someone that lives frugally all their life and middle class at best. To me, rich people have the means to both spend lavishly and have millions in the bank too.

Sam walton, for an extreme contrast, was truly rich, and only drove an old beat-up ford by choice. He could easily have what his heart desired, and still have millions in the bank. My dad could not afford both.

In the past, when i've described his financial position, i used the term "well-off". But i agree, its all relative.
__________________
azanon is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 07:13 AM   #33
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

I didnt find out about his position until just a few years ago. *It was pretty incredible how non-chilantly i found out. *I've always been good with pc's and apparently he was having trouble with his quicken program, so he asked me if i could help him integrate his files with ameritrade or whatever it was.

Well, we loaded it up, and then once quicken opened, there was the tally on the left hand column; *something near 2,000,000 at the bottom. *I couldnt restrain myself when i said holy cow dad, is that also wrong? *He said, no that part is right, while smiling. * *
__________________
azanon is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 07:48 AM   #34
 
Posts: n/a
Re: Book Report - Millionaire next door

azanon,

I also use Quicken and they encourage you to input all of your assets (and it works better this way) Primary residence, other property, even Cars and Furniture. The bottom of the left hand colum of Quicken is total Net worth (which would include any asset that you put into Quicken - and what you valued it at.)

worth $2 Million and having $2 Million Liquid are miles apart. *Just something to keep in mind.
__________________
  Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 08:05 AM   #35
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

Unlike me, he's only tracking liquid assets with it. * He also doesnt bother with the small stuff, like say his month-to-month checkbook. * I guess like you, i use quicken to track everything.

If net worths the issue, he could be worth twice that. *He owns two pharmacies that bring in a god aweful amount of income, not to mention he's a pharmacist himself. *This is to say nothing of his other assets (the house, cars, other land/buildings, etc). *Still back on point, i'd call him well-off, not rich.

(edit)
Quote:
worth $2 Million and having $2 Million Liquid are miles apart. Just something to keep in mind.
You did spark my curiosity though; how so? When i reflect on my hard assets (house, cars mainly) they arn't liquid but i could certainly get them that way if i needed to within a half year. Personally, i make sure my estimates of their worth are approximately what i could get for them.

IMHO, someone holding 2 mil in cash, is in the same shape as someone with 3 mil, and 1 mil in liabilities, provided that my math is serving me correctly.

__________________
azanon is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 08:14 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Book Report - Millionaire next door

Quote:

First, the mean US household income today is actually in the mid 60s. If you want a source, i can find you one. That's not to be confused with the mean annual salary for one working individual.
The mean US household income (mean third fifth, 2003 US census) is about 43k. Median is 41k. Thats household, not individual.

But as with any study, if you choose a particular one and take the data the way you want to, you can make this number say a lot of different things.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 08:17 AM   #37
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

Got an actual source TH? *I just recall reading otherwise not long ago, and personally being shocked it was mid 60s, which is why I distinctly remember it. *I would have thought in the 50s. I'll see what i can find, but i don't remember where i saw that.

(edit) Ok confirmed what you're saying: *http://www.census.gov/hhes/income/in.../statemhi.html * *Hmm, must have misread something then, my bad. * * 43K household seems low to me though; *sounds like the average household is knocking on poverty's door.
__________________
azanon is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 08:29 AM   #38
 
Posts: n/a
Re: Book Report - Millionaire next door

Quote:
sounds like the average household is knocking on poverty's door.
Hence you proved the point. If your dad's not rich then these folks are in poverty.

So it's all relative. If I woke with a Billion Dollars, I'd have more than enough money to do anything I wanted forever. If Bill Gates woke up with only a Billion, he might jump out the window in an act of desperation.
__________________
  Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 08:41 AM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Book Report - Millionaire next door

Sure...its worth a few minutes to ponder, the datas interesting

http://www.census.gov/hhes/income/hi...nchhtoc.html#3

The 60-something figure is for the fourth fifth mean.

I'm sure you heard someone say that 60-something was the average, mean or median. In 5 minutes I could find 10 studies that say 10 different things. I also wouldnt count on the US census for 100% good data. But its probably better than most sources.

Whats interesting to note is all the segments (fifths) are moving upwards except for the bottom fifth...pretty much the poor are getting poorer but everyone else is stable and trending upwards.

Break it down into race though, and you see that most non-whites are losing ground year on year.

Rich is certainly a relative term but I think it may be worthwhile to consider ones position against the rest of the world, not just the unusually well to do US positions. Having a paid off house, a car and regular meals puts you ahead of the vast majority of people worldwide. Having financial security, whether that means you will or wont buy a bigger tv if you can afford it, makes you rich. By a few billion peoples metric anyhow.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Book Report - Millionaire next door
Old 09-10-2004, 08:44 AM   #40
Thinks s/he gets paid by the post
 
Join Date: Jul 2004
Posts: 1,505
Re: Book Report - Millionaire next door

True, true. *I was born into that family, so i'll admit my views of money are a little warped to the "spoiled" side. *

As for Bill Gates, my perception of him is he really doesnt do it for the money. *The man could have anything his heart desired, but he continues to work. *Folks like that do what they do because they're passoniate about it, not to get rich. * I saw him on Leno once (or some talk show), and he was like a little giddy kid that was so genuinely anxious and excited about his new upcoming products. Supposedly he's only going to leave a paltry 1 million or something like that to his offspring because of his strong belief in the work ethic.
__________________

__________________
azanon is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Book report: "The Little Book of Value Investing" Nords FIRE and Money 5 01-08-2007 12:00 AM
Book Report: "Why Do I Love These People?" Nords Other topics 4 06-12-2006 11:40 PM
Book report: Life 2.0:... Nords Other topics 4 03-02-2006 04:42 PM
Book report: "The Way We Never Were" Nords Other topics 9 05-17-2005 10:57 AM
Good book - The Millionaire Next Door Telly Other topics 18 08-20-2003 04:37 PM

 

 
All times are GMT -6. The time now is 09:10 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.