A Doctor in NeedPosted on October 7th, 2010
I recently received an e-mail from a physician of the Income Statement Affluent variety (high income/low net worth). In it he laments about the difficulty in transforming himself into a Balance Sheet Affluent millionaire. I have all the basics to live frugally; I just have not done so because I have been caught up with my status. Until your latest book, Stop Acting Rich, which is my 3rd installment, clearly I must have forgotten from reading The Millionaire Next Door and The Millionaire Mind. He wants to know how he can invest his money to the fullest, what cars he should...
The Real Cost of HomeownershipPosted on August 31st, 2010
The New York Times published a front page article recently entitled in the print edition "Your Home as Sure Nest Egg? That Era Is Over, Analysts Say." I'm not sure what "era" they are talking about. As I said in Stop Acting Rich, overall single family, owner occupied homes were never the so-called nest egg that many people thought they were. According to The New York Times' article, even during the rosy days of residential real estate the inflation adjusted appreciation was only 4% per year. In an earlier blog, I mentioned the false premise that many homeowners operate under when assessing the appreciation...
Here's an Upside to DownsizingPosted on August 10th, 2010
We recently sold our family's mainstay, a 1997 Toyota 4 Runner 4 X 4. I bought the car new as a reward, a merit badge, in recognition of The Millionaire Next Door hitting No. 1 on The New York Times Bestseller List. The car was like a good friend; it never let our family down. Even though it had 180,000 miles on it, everything worked. The paint was still nearly perfect. We were surprised with the large number of prospective buyers who contacted us shortly after it was listed on the internet. Private sales, person-to-person, of motor vehicles are growing. It is no wonder. According to...
Wrecks to RichesPosted on August 5th, 2010
Our family receives more than 2 dozen telephone directories annually. Most of them we recycle. However, I actually look forward to looking through one of them- the Business Yellow Pages. The 2010 edition contains 1,051 pages. Eighty-one of these pages is devoted to attorneys. In a quick computation, I estimated that there are more than 12,000 attorneys/law firms listed. This reminds me of an encounter that I had with an attorney who was working the counter at a Kinko's. He had attended an accredited law school and passed the bar exam on the first try. He explained that he was working two...
Stop Acting Rich: A Professor of FrugalityPosted on June 29th, 2010
Engineers, professors and people with Scottish ancestry, taken separately, are among those who are significantly above average in transforming income into wealth. I have focused on these three groups in previous blogs. I wonder if someone who fit in all three of these categories would be especially good at accumulating wealth? The details of the following case certainly support this hypothesis. Dr. Scott became wealthy on a professor's salary before he was 50. He and his family are very frugal. As an example, what wattage light bulb does Dr. Scott use in his home? One-half are 60 watt; one-half are 40 watt. What is...
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