By: Alan McMillan
I often quote the blockbuster bestseller (a bit dated in its research, but still completely on target) The Millionaire Next Door. The basic lesson is under-consumption for sake of long-term investment and your financial freedom. In this work, authors Thomas Stanley and William Danko researched self-made millionaires in America in order to find best practices that can serve as a guide to us all.
One of the biggest concepts I took away from the book is the notion that in order to become wealthy, you have to play strong economic-offense AND economic-defense.
Offense: You endeavor to make more money. That will happen as you consistently apply yourself in a superior way rather than average workplace performance. As that author, Thomas J. Stanley puts it, “If you are the best in your field, money will find you.”
Defense: Making money is only part of the equation, more importantly it is how you spend (or not spend) the money you have earned.
‘The Millionaire Next Door’ plays offense AND defense to the max. Those who play a superior defense can generate wealth far in excess to those who made considerably more money but played lousy defense. One sobering point to mention, if you play great offense and defense but you marry someone who plays poor defense, the chances of becoming wealthy are vastly diminished.
Goals, as in long-term financial independence, are important-- but even more important are the removal of conflicting goals and behaviors. We are tempted many times a day to consume, spend and borrow. With temptations abounding, it is useful to compare yourself to the behavior of ‘The Millionaire Next Door’.
Up-and-coming millionaires NEVER:
If you are looking for more insight into his thinking check out this great article that gives more tips (for behavior to avoid while seeking financial independence).
Another excellent article I recently came across that goes into more detail with a pretty good book summary is linked here. For full details, read the book or get the audio version (in the spirit of playing great economic defense, get it from the library).
Building wealth is the orchestration of intentional acts. First you have to want to do it, then you have to figure out, in your world and circumstances, how to do it. Just hoping that it happens won’t cut it. Looking up in forty years, seeing where you are and lamenting that life isn’t fair won’t get you anywhere. You must have an objective, and approach it with strong intention.
Quotes from the author Thomas J. Stanley from his research in writing his book:
More inspiring quotes from the author can be found here.
I strongly recommend this book.
Good luck, and good fortune.