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The Millionaire Next Door

The Millionaire Next Door. 32 Observations. Inconspicuous Lifestyle. 1 – Inconspicuous Lifestyle. Inconspicuous Lifestyle Mentor. 2 - Mentor. Example of success. No commission or profit from advice. Tax advisors preferred. Example - CPA. Inconspicuous Lifestyle Mentor

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The Millionaire Next Door

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  1. The Millionaire Next Door 32 Observations

  2. Inconspicuous Lifestyle 1 – InconspicuousLifestyle

  3. Inconspicuous Lifestyle Mentor 2 - Mentor Example of success No commission or profit from advice Tax advisors preferred Example - CPA

  4. Inconspicuous Lifestyle Mentor Modest House 3 - Modest House Often a ‘starter’ home In a middle class neighborhood My wise father said to me, “Get a modest home and pay off the mortgage . . . Gordon B. Hinckley

  5. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership 97% of millionaires are homeowners 4 - High Instance of Home Ownership

  6. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) 5 - Dr. North (PAW)vs Dr. South (UAW) Can you live like Dr. North Can you see how easy it is tobecome Dr. South

  7. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation 6 - Education Income Accumulation Education Income Income Accumulation Physicians CPAs Home Builders Dentists Financial Advisors Actors Orthodontists Stock Brokers Artists Attorneys Insurance Agents Musicians Provide Professional Services for a Fee

  8. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth 7 – Income – vs – net worth def. – Net Worth Financial Assets – Liabilities (debts) = Net Worth

  9. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires 8 - First Generation Millionaires 85% are first generation! At a disadvantage: Second generation millionaires ‘Overnight’ millionaires Odds of being an overnight millionaire One in four thousand

  10. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances 9 – Inheritances More than 50% Never receive $1 Majority of inheritances Gone by the third generation

  11. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances Economic Outpatient Care 10 – Economic Outpatient Care Less than 2.5% Ever received more than a $10,000 in gifts More than 50% Never received any education financial assistance from any relative EOC to Adult Children – Rarely Given The more assistance adult children receive the less likely they are to accumulate

  12. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances Economic Outpatient Care Monthly Payments 11 – Monthly Payments To pay . . . curse To receive . . . Million Dollar ChoiceTM

  13. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances Economic Outpatient Care Monthly Payments Budget – Intense 12 – Budget Intense focus on knowingwhere money is spent

  14. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances Economic Outpatient Care Monthly Payments Budget – Intense Shoppers – Not Intense 13 – Shoppers Not extensive time and energy spent Very aware of where to find a ‘good deal’ Love NOT giving away their money

  15. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances Economic Outpatient Care Monthly Payments Budget – Intense Shoppers – Not Intense Higher Education 14 – Higher Education 80% are well educated No guarantee offinancial success

  16. Inconspicuous Lifestyle Mentor Modest House High % of Home Ownership Dr. North (PAW) – Dr. South (UAW) Education / Income / Accumulation Income – vs – Net Worth First Generation Millionaires Inheritances Economic Outpatient Care Monthly Payments Budget – Intense Shoppers – Not Intense Higher Education Higher Education for Children 15 – Higher EducationSpending on Children “We spend well for theeducation of our children?”

  17. JOY of Prudence and Frugality 16 – JOY of Prudenceand Frugality Delaying Gratification Or Developing a Healthy Preferred Lifestyle

  18. JOY of Prudence and Frugality UAW / AAW / PAW 17 - UAW AAW PAWAsset Formula Current age (x) Current income ___________________________ What Your Current Net Worth Should Be = 10 $ 450,000 Underachiever UAW 45 (x) $ 100,000 ________________ = $ 450,000 Average Accumulator AAW = $ 450,000 10 $ 900,000 Prodigious Accumulator PAW

  19. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance 87% leading cause ofAmerican divorces – moneyAmerican Bar Association 18 - Spouse Significance I am satisfied that money is the root of more trouble in marriage than all other causes combined. Gordon B. Hinckley Cornerstones of a Happy Home

  20. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person 19 – Marrying the Right Person Very Important + Important 84% I married the right personMillionaire Mind

  21. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate 20 - Divorce Rate One-half national average

  22. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse 21 - ‘Working’ Spouse Rarely worked No time consuming professional careers

  23. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome 22 - The ‘Better than My Life’ Syndrome “I want your life to be better than mine” We forget how we built our resources We ‘encourage’ inefficient professional lifestyles Children likely to spend to meet the ‘expectation’

  24. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment 23 - Self Employment Two-thirds of all millionaires are self employed

  25. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save 24 - How Muchto Save Millionaires Save At least 15% Average of 20% Joseph to Pharoah- take up a ‘fifth part’ . . . Genesis 41:34

  26. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules 25 - Investment Rules • Long - term • Familiarity with company or industry • “Dull / Normal” investments • Twelve per-cent return over the past 10 years • Increasing Dividends each quarter • Same Management Team

  27. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits Rarely purchase: 26 - Purchasing Habits Brand names Expensive items “I can’t get my wife to spend any money” • Being frugal – • a cornerstone to accumulation

  28. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits The Most Profitable Business 27 - Most Profitable Businesses Begin with what already works Sole proprietorships: 15 million only made $6,200 25% made no profit Partnerships - 42% made no profit Corporations - 45% made no profit The Most Profitable Business The One that Compels you Most!

  29. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits The Most Profitable Business Estate Objectives 28 - Estate Objectives Discipline Ambition Independence

  30. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits The Most Profitable Business Estate Objectives Non-Beneficiary Executor 29 - Non-beneficiary Estate Executor 7 out of 10 namednon-beneficiary as executor

  31. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits The Most Profitable Business Estate Objectives Non-Beneficiary Executor In-Law Conflicts 30 – In-Law Conflicts Majority of family financial conflicts Best In-Laws – stay out

  32. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits The Most Profitable Business Estate Objectives Non-Beneficiary Executor In-Law Conflicts Live Life WELL Below Means 31 – Live Life WELLBelow Means

  33. JOY of Prudence and Frugality UAW / AAW / PAW Spouse Significance Marrying the Right Person Divorce Rate ‘Working’ Spouse ‘Better than my life’ Syndrome Self Employment How Much to Save Investment Rules Purchasing Habits The Most Profitable Business Estate Objectives Non-Beneficiary Executor In-Law Conflicts Live Life WELL Below Means Life of DISCIPLINE, SACRIFICE, HARD WORK 32 – Life ofDISCIPLINESACRIFICEHARD WORK

  34. Inconspicuous Lifestyle • Mentor • Modest House • High % of Home Ownership • Dr. North (PAW) – Dr. South (UAW) • Education / Income / Accumulation • Income – vs – Net Worth • First Generation Millionaires • Inheritances • Economic Outpatient Care • Monthly Payments • Budget – Intense • Shoppers – Not Intense • Higher Education – 80% • Higher Education for Children • JOY of Prudence and Frugality • UAW AAW PAW • Spouse Significance • Marrying the Right Person • Divorce Rate ½ the National Average • ‘Working’ Spouses – Rare • ‘Better than Mine’ Syndrome • Self Employment • How Much to Save – Average 20% • Investment Rules • Purchasing Habits • The Most Profitable Businesses • Estate Objectives • Non Beneficiary Executor • In-Law Conflicts • Live Life WELL Below Means • Life of DISCIPLINE, SACRIFICE, HARD WORK

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