Readings: ‘The Millionaire Next Door’
A good read. US based research. Takeaways:
- Being a millionaire refers to one’s ability to live through many years on wealth without any additional income. Thus, it depends on one’s consumption (beyond a certain minimum wealth)
- Millionaires don’t look like ‘Millionaires’: They are frugal. They are value conscious. They buy second hand cars. They are self-employed. Most of them in not-so-fancy businesses. They enjoy financial freedom. Most are first-generation entrepreneurs and have worked hard to save and invest money.
- A conscious effort and plan is required to ensure that the progeny (of millionaires) doesn’t get ‘crutches’ — regular cash to be spent. There is a need to avoid the folly of making ‘weak’ weaker by supporting them.
- Care is required in estate transfer. A third party — neutral — would be useful to avoid conflicts in children/grandchildren.
- Millionaires — good ones — spend money on education of their progeny and instill values in their children — self reliance emotionally and financially.
- To target millionaires, choose profession where millionaires are willing to spend money — specialists in health, accounting, real estate, education etc.
- For their children, millionaires prefer profession where intellect is sold — professionals like doctors, lawyers, accountant etc.