I just recently read the book, Stop Acting Rich…and Start Living Like a Millionaire by Thomas J. Stanley. He shares tons of statistics about millionaires and millionaire wannabes. He calls those who act rich ‘aspirationals.’ These are folks who have little in investment wealth but wear the badges of wealth anyway. He shares that aspirationals very seldom become millionaires because they can barely afford driving the status symbol cars (Mercedes Benz, BMW, Porsche). Many aspirationals finance such vehicles through leasing because they cannot afford to purchase/finance the total cost of the vehicle. He calls someone a millionaire someone whose total net worth is 1 million dollars and only 1/4 of that wealth includes home equity.
Below are some telling quotes from the book: What percentage of the millionaires who live in homes valued at under $400,000 are happy? More than 9 in 10 (91 percent) indicate that they are extremely satisfied with life. Yet only 1 in 20 has a wine collection. Happy people tend to live well below their means. I have found this to be the case in all of the studies I have conducted.
The demographics of this group, millionaires who live in homes valued under $400,000, are quite similar to those of the millionaire next door profiled 14 years ago. Ninety-two percent are married. In 90 percent of the cases, the male head of household is the major breadwinner. Fully 62 percent of those who are married have never have never been divorced. The median value of their home is $293,214. Their median realized household income from all sources in 2006 was $152,193, or more than one-half the current value of their home.
This book reveals that hundreds of millionaires live way below their means. While they could afford to live more extravagantly, they simply feel no need to impress others. Their satisfaction comes from high levels of achievement. The author warns to not fall into the trap of becoming an ‘aspiration all.’ These are folks who are consumed with appearing rich while their balance sheet (investments) reveals they are in fact not millionaires. The book also reveals that millionaires are generous people. There is a strong correlation between donating to charitable causes and overall satisfaction with life. In conclusion this book is a good read if you want to know how millionaires live lives of value. You will find that many millionaires live below their means and invest wisely. I liked a quote from Henry David Thoreau shared in the book: “That man is richest whose pleasures are cheapest.”