THE DIRTY ARMY: With some additions and edits… Interesting to note are the habits of wealthy Americans. Thomas Stanley PhD has spent his career defining this. Stanley has written a number of books after interviewing hundred’s of millionaires (at least $1 million net worth) and decamillionaires (at least $10 million net worth). What they do for work, how much they make, what they buy, what they worry about, family profile, education, demographics, and pretty much everything else. Some observations from Stanley’s work: – More then 80% of the wealthy in America are first generation wealthy. They made their own wealth through income and life style choices as opposed to inheriting it. This has been consistent for 5-6 generations, about 110 years. But how can this be you may ask? It speaks to the liquid and fluid nature of wealth. People that work hard, live frugally and become wealthy usually raise kids that blow the wealth out the expense column in the very next generation. – Number 1 vehicle driving by the rich: Ford F150 pickup (number 2: the Toyota Camry). Now it is true these vehicles are also top sellers to the non-rich. The key take-away is proportionality coupled with minimizing investment in depreciating assets. The rich spend a fraction of 1% of their net worth on their ride. The average person spends in excess of 50% of their net worth on choice of vehicle. So who are buying all the sexy foreign luxury rides? They are mostly purchased by either high achievers of income or high achievers of spending other people’s money. But rarely will this lead to a wealth quotient equal to or greater then their social-economic peers. – Income and wealth are very different and difficult to differentiate out in public. Spending habits can begin to give clues to who has tall coin and who doesn’t. When I am meeting a new company to do business with or possibly invest in, I always look at the parking lot before going in to meet the people. If I see many fancy foreign luxury rides in the lot it is telling that the people running this company value and invest in depreciating assets. Why all this focus on wealth? What about love, happiness, contentment you ask? There is a very high corollary between one’s propensity to acquire wealth and one’s feeling love and connected to/with other people, feeling happy, feeling content. I have not seen research about the inverse, but I would venture to say those who spend a lot of their money on life style choices have a lower rating in all these categories. The rich simply do not invest in depreciating assets, nor depreciating relationships. Most millionaires are couples that rarely get divorced. As I heard Jim Ready say years ago…”The world is full of people who are experts at turning $20 bills into $5 bills”. The goal it would seem, if one ventures to be happy and content, is to not be one of them. To sum…You can be wealthy in your lifetime by hard work and life style choices. And rich people don’t care what others think of their ride. It’s simply not important.
30k’s are the only ones with something to prove.- nik