09 Jun Habits and Characteristics of Millionaires
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I finally set aside some time to read the sequel to The Millionaire Next Door, entitled The Millionaire Mind, by Dr. Thomas Stanley. The author had studied the lifestyle and habits of millionaires and condensed them into two best-selling books. As high income earners with a late start on their careers, doctors do have plenty to learn from the rich. The following is a list of focal points that Dr. Stanley emphasizes throughout both of his books:
Millionaires Did Not Get Good Grades in Schools Nor Did They All Go To School
Of the millionaires polled and studied, the majority of them apparently were not seen as intelligent by their teachers and did not achieve good grades in school. Some were condemned by their teachers to a life of mediocrity. Could mediocrity serve as motivation to achieve? The author believes that by not being “book smart”, these future millionaires became more resourceful and chose careers that were less popular and had less competition. These people also learned to work harder and more intelligently than their peers and eventually became more financially successful than their peers who received better grades in school. Examples given included a millionaire businessman who owned a metal recycling company or the salesman who knew how to get widgets sold. Neither of these professions truly required much of any formal education but allowed the resourceful to succeed.
Can this apply to doctors? Hell no. Doctors succeed by working hard but also getting good grades. We survived through college organic chemistry and repeated testing of material that ultimately has little to do with our final daily routine. This hazing process was important because it filtered out the less compulsive and less determined—after all, you’d want a compulsive doctor who does not miss diagnoses. Medicine is a mesh of inexact science with art; patients can become ill and even die under the most skilled physician (and get wrongfully sued too). Can a doctor be skillful but received poor grades in school? It’s possible, but less likely.
With these conflicting conclusions, can doctors still be millionaires? Of course, but it certainly is much harder. One of my neighbors who is a retired small business owner likely has more wealth that I will ever accumulate constantly remarks how rich doctors are. Yes, doctors have good salaries, but we still need to be smart about our money and convert a high income into high net worth.
Millionaires Contract Out Tasks To Others
Apparently the typical millionaire is not the DIY-type. Home repairs, plumbing, cooking, yard work…all of these routine household tasks are either left to the spouse (the wife, according to his book) or hired help. Millionaires spend their free time relaxing with their family, playing golf, or focusing their attention to earning more through their profession. This approach allows them to enjoy their hard work, and maximize their earning potential. A jack of all trades is a master of none.
I’ve seen this mentality with my colleagues to a certain extent. We’ve trained such a long time to practice our profession; we should use that to our advantage to earn more. I recently heard that one two-physician couple hires a chef to cook for them, and each meal costs $120! It certainly is impressive that one could afford this long term, and I suppose you can interpret this to be that they are successful in their careers. Need additional income, let’s pick up a few more shifts in the ER. I know doctors who don’t know a single bit about cleaning floors, car maintenance, or how to operate their food processor. But they do know how to intubate a patient, and that’s where the easiest way for these people to obtain income.
Frequent visitors to this website know that I approach net worth as a balance between savings through lifestyle modification and income (whether from your career or alternative means). I have discussed low-risk household maintenance tasks like changing the headlights to your car, replacing toilet parts, and cleaning your toilet. By means of branching out your fund of knowledge, you can become more self sufficient and invest your hard-earned post-tax dollars for other needs. You can be smart about your money without being totally useless in practical life.
Does limiting the number of outsourced tasks mean that I will never become a millionaire? I sure hope that there’s no corollary between hiring help and becoming wealthy in today’s times.
Millionaires buy lasting furniture and older, well-built homes
One interesting statistic that Dr. Stanley found was a millionaires rarely buy new furniture but rather resurface their existing furniture. The premise is that quality solid wood furniture should last forever, and wasting money purchasing new furniture every decade is not practical. Frankly, I don’t even know any local furniture dealers who reupholsters furniture. This fact might be reflective of outdated trends. Most modern furniture (even the expensive ones) contain particleboard.
He also found that millionaires target older, well-built homes in established neighborhoods to live in. These homes tend to save their owners more long term. I don’t really know how to interpret this finding in present times. There are plenty of affluent neighborhoods especially in the northeast that undergo cycles of tear-downs and rebuilds. Some owners do it simply because they want updated floor plans or extra bathrooms. I haven’t noticed any correlation with the upper-middle class or the ultra-affluent.
Whether you upholster your old furniture or live in well-established “older” homes probably has some connection with being a millionaire or ultra-rich. Not following these statistics probably doesn’t prevent you from being a millionaire either.
After reading both The Millionaire Next Door and The Millionaire Mind, I do think that the author brings up goods points that apply to all of us who are trying to build up a stable net worth. There are plenty of millionaires and billionaires who were not pegged by their teachers to be successes and some who did actually receive good grades. The one unifying aspect of the wealthy is that they think differently. Everyone works hard, keeps their eye on the goal, and finds ways to reach that goal. The billionaire factory widget maker worked hard to reach his clients and sell products. The wealthy doctor needs to do the same.
Do you have any experiences with any of the qualities of a millionaire? Comment below!