Have you ever noticed those people whom you see jogging day after day? They are the ones who seem not to need to jog. But that's why they are fit. Those who are wealthy work at staying financially fit. But those who are not financially fit do little to change their status.
- Excerpt from The Millionaire Next Door
Chapter two of The Millionaire Next Door outlines four basic questions that all Prodigious Accumulators of Wealth Millionaires can answer yes to. (The only exception being older/ retired Millionaires on question #3 because many of them have actually reached the majority of their long term goals).
Under Accumulator of Wealth Millionaires on the other hand may have inherited their wealth or earned it through very high paying salaries (and spend as quickly as they earn), i.e. movie stars/ athletes and while they are in fact millionaires they have considerably less net worth then they should have and will not generally answer yes the the following four questions.
- Does your Household operate on an annual budget?
- Do you know how much your family spends each year for food clothing and shelter?
- Do you have a clearly defined set of daily, weekly, monthly, annual, and lifetime goals?
- Do you spend a lot of time planning your financial future?
I've been reading through this book very slowly. It's a very fascinating book that I'm glad to finally be reading but there are a lot of number examples and charts which makes it more difficult for me to concentrate on reading through it for a very long time. It's been a VERY up and down read emotionally. One moment I'm thinking "Yes! I'm really doing this money thing so much better than I'd thought." Then a few pages later I'm like, "oh, no I'm doomed."
There was a long description about how the majority of first generation millionaires in America are actually immigrants. Specifically Russians who come here do really well in accumulating wealth. On the other side of the spectrum it noted statistics that say the longer your ancestors have been here the more likely you are to live a very average life/ not ever accumulate wealth.
I think the lesson to be learned from these statistics is that people get lazy. People who travel here from overseas with virtually nothing to their name and very little money in their pockets are more likely to live a super frugal life, take extraordinary risks, and attain an overly ambitious goal through hard, hard, grueling years of work. Whereas people who grew up here are much less likely to step out of comfortable living to do what it takes. Uh oh, a great deal of my ancestors have been here since the pilgrims (but Sluggy is doing pretty good and a good lot of her ancestors have been here for centuries as well so I still have hope. Thank-you Sluggy).
Back to the questions. This was one of the portions of the book that made me really hopeful. Since starting this blog I can pretty easily answer yes to all four of these questions. The only one I really struggle with is number 3. I make a lot of goals but I get overwhelmed and distracted and lose focus really quickly. "What, did she just say she's scatter brained?" Yeah, anyone who's read this blog for any period of time knows this full well. Do I have a clearly defined set of goals? Yes. Do they change by the hour. Pretty much. I do need to work on that. Number 1, 2, and 4 on the other hand are resounding yeses and I'm really proud of that because it took years of very hard work and focus (not a strong point) for the answers to be yeses.