Friday, August 26, 2011

Read A Good Book: The Millionaire Next Door by Thomas Stanley and William Danko

This may seem an odd choice for a poetry blog but we all read more than just poetry, right? I have grown up reading finance books since I was 12 thanks to my father who was always learning how to invest and save on his own. He also sought advice from people smarter than himself. This book was given to me in the 1990’s when I was a young teenager, my father wanted to show me who truly wealthy people are.

Truly wealthy people are not the ones you see on television driving fancy cars, wearing the latest designer clothes, in fact, the people you see spending money like crazy are not wealthy. They just spend.

This book shows you the real side of wealth: the people who buy sensible cars, homes, clothes, who often own their own business and/or work in a place that does not require fancy attire such as plumbing businesses or factories. They compare families who have similar professions (doctors, for example) yet they have different spending habits and the results are enlightening. The moral of the story is to live below your means and steadily build your savings and wealth for retirement. Flashy things only indicate spending, not true wealth. True millionaires clip coupons; that is why they have a million or more in the bank instead of in their house or vehicles. The dollar holds real value and is the key to a bright future.

As a teenager this had a huge impact on the way I looked at other people. I stopped begging my parents for the latest clothes and saved up my own money towards things I really wanted in the future or for a rainy day. I learned to value money the way it should be valued: As a means to achieving your dreams and providing security in the lean times or old age. I also had fewer fits of jealousy over friends and families that I knew who had nicer things than us in our neighborhood. When it came time to go to college quite a few of the students who had flashy clothes and cars could not go to college without student loans and eventual debt. My parents were able to provide for my college and trust me, my parents did not wear designer clothes, and our fanciest car was a Firehawk that was six years old by the time I left for college. Otherwise we had Chevys and Jeeps, not Jaguars and Lexus. Saving their money for my college education was a much better investment to them than buying the latest cars, clothes, or techno-gadgets.

I highly recommend this book in these troubled times to gain perspective on money itself. There will always be the Joneses but what you don’t realize is how the Joneses handicap their abilities for a secure future. How many 65-80 year olds do you know that are working because they can’t afford to retire? If you start paying attention, you will realize that people are often not what they seem. Most spend everything they have as a way to impress others or because they do not understand the concept that one day they need money saved up for when they are frail and/or sick.

I could go on for pages about this book. I re-read it whenever I am in despair over my own spending/saving habits. It is always refreshing and eye-opening. If you would like a copy for yourself The Millionaire Next Door by Thomas Stanley and William Danko may be in your local library, book-store, or you can buy it on-line here:

Thanks always for reading, please stop by again next week…

1 comment:

FB @ said...

This is absolutely why it is MY favourite book. I don't even bother reading any other PF books. This is the one and only that made total sense to me and is a good re-read for when my spending gets out of hand