In the recent issue of SmartMoney Magazine they have an interesting article titled, “10 things millionaires won’t tell you.” I disagree with some of the points, but let’s look at their top 10 first…
These are the 10 things that SmartMoney says millionaires won’t tell you…
- You may think I am rich, but I don’t.
- I shop at Walmart.
- I didn’t get rich skimping on lattes.
- I have a concierge for everything.
- You don’t get rich by being nice.
- Taxes are for little people.
- I was a B student.
- Like my Ferrari? It’s a rental.
- Turns out money can buy happiness.
- You worry about the Joneses-I worry about keeping up with the Trumps.
While I won’t go into each one of these, there were some points worth mentioning…
#1. SM makes a good point that being a millionaire isn’t nearly as big of a feat as it used to be. There are now over 10 million households with a Net Worth (excluding home equity) over $1 million. So while a million dollars still has a nice ring to it, it isn’t what it used to be.
#2. They mention that over 70% of millionaires come from middle-class households and that only 3% inherited it. This is strong evidence that reaching the millionaire level can be attained if you take the right steps.
#3. I kind of get annoyed that so many people rip on David Bach’s “latte factor”. In his book the Automatic Millionaire, he talks about how the average person who buys a latte a day could fund a million dollar portfolio for retirement just by sacrificing their latte. If you do the math you can see that there is some validity to his argument. But while he called it the “latte factor” is isn’t about coffee, it is about making some small sacrifices that will yield tremendous results. It doesn’t matter if it is lattes, cable tv, or any other indulgence. The small things can really add up to something big over time.
#5. I disagree with this one. The author uses Rockefeller threating to bankrupt other companies and some of Bill Gates business ethics to basically prove this point. While I agree that some people do get rich by being jerks, there are plenty of examples of people who ended up very wealthy by being nice and doing it God’s way. Most notably Warren Buffett. While I can’t defend every business move he has ever made, whether he knows it or not he has followed a lot of Biblical principles in business and has reaped the harvest of them.
#7. According to the book the Millionaire Mind the median college grade point average for millionaires was 2.9. Yes, I beat that! Hmm, but is that a good thing or not? When asked to list the keys to their success, millionaires said hard work, education, determination, and treating others with respect were the keys. They also suggested that learning how to study and being able to stay disciplined was very important as well.
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{ 6 comments… read them below or add one }
I’m also totally annoyed by the way people dismiss the Automatic Millionaire because of the latte factor. I think it’s one of the best, most straight-forward books out there. The automatic savings principles are what bring you freedom with your finances. The latte factor, like you say, is simply a tool to get you thinking about how small of a sacrifice you need to make to get to freedom. Great post, Bob.
I’m having a really hard time understanding this list. Does the title mean “things millionaires won’t tell you because they’re not true”, or does it mean “things millionaires won’t tell you because they’re ashamed of them”?
Either way, there are some hefty double negatives in this list. Let me try to reduce the list to single-negatives.
THINGS THAT ARE TRUE ABOUT MILLIONAIRES:
1. They think they’re rich.
2. They don’t shop at Walmart.
3. They got rich skimping on lattes.
4. They don’t have a concierge for everything.
5. They get rich by being nice.
6. Taxes are for everyone.
7. I was NOT a B student.
8. I bicycle to work.
9. Money can’t buy happiness.
10. I have no worries about the Trumps.
Most of these don’t make sense together when read this way. I think the list is actually a composite: some of the items are things that a millionaire won’t tell you because they’re not true, while others are things they won’t tell you because they’d rather not.
In other words, without more details, this is an annoying and useless list.
-Wm
@PT
thanks – I am glad there are others out there who can see what David meant with his book
@WM
you know, part of the confusion is my fault because I didn’t want to re-type their entire article, but I think part of the confusion was from their article. That said, I believe the point they were making was that millionaires wouldn’t tell you this stuff because they don’t want everyone else to know – I am not really sure…
I think #2 is more important than it seems– simply because we tend to think that those that accumulate money spend it frivolously as well.
The truth of the matter is, these people tend to understand the value of money (unless they’re sport stars or get crazy sums of money quickly– and then all bets are off) and know what they can spend and where to get good deals.
Totally don’t agree with the idea that rich people don’t pay taxes, or much taxes (if thats what it is arguing). When I first got married I was so poor the our taxable income was $0 for the first two years. We also were getting aid from social programs. Someone is footing the bill. Now that I have more money saved and investments and all taxes are a real concern.
#11 Don’t waste time reading top ten lists on how millionaires work..take it from me.. go out and DO IT