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How to Become The Millionaire Next Door

June 27, 2016
Many want to become the next millionaire next door; however, there are many misconceptions about being a millionaire that's keeping them from achieving this status. See what it really takes to become a millionaire.
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Being a millionaire would be nice, wouldn’t it? Unfortunately, it’s not a status easily achieved by the masses. There are a few folks who have reached this status as they live inconspicuously in our neighborhoods, driving cars we “regular folks” would drive, and dressing as normal as the guy standing next to you in the grocery store.

The problem isn’t with them, though, it’s with most of the “regular folk” who believe common misconceptions of what millionaire status should look like. You know, misconceptions like if you’re a millionaire you drive a beamer, live in a 5-bedroom brick house in the suburbs and buy whatever the hell you want, whenever you want it.

Fortunately for myself and many others in the personal finance blogging community, we are becoming hip to the real games the millionaires play and it isn’t what the majority believe when they think of someone who has acquired this sought after status.

So, who exactly are the millionaires we aspire to be? What do they do differently that very few people understand? What can we learn from them so we can check ballin  off our financial to-do list? Well, I’m glad you’re curious because I’ve been reading some good stuff and I’m going to share with you a few things you need to understand before you can become the next millionaire riding through these streets.


 

Further Reading: 80+ Ways to Make Extra Money, Earn Extra Cash: 21+ Ways to Add $150 to Your Budget

 

Who is the Millionaire Next Door?

The millionaire next door is named Jimmy. Jimmy and his wife Camilla have been married for 20 years. They have two kids and they live in a small suburban area right outside of Columbia, SC. Jimmy is a mechanic and his wife Camilla is a high school teacher.

What? Were you thinking they were going to be a doctor and a lawyer? Nah.

Their kids never attended private school, they attended schools in the same district where their mother worked. They never brought brand new vehicles, drove each of their cars for 15 years until they could no longer manage to get them from point A to point B. Jimmy did know a thing or two about cars after all.

They budgeted every dollar that came into their account; however, they never felt deprived. Their son, Jacob, was involved in sports and their daughter, Camryn, took dance classes. Their kids never tried to keep up with whatever everyone else at school was doing because their parents made sure they hung out with well-grounded kids who weren’t mesmerized by every new gadget or vehicle that hit the market. Simply put, their kids hanged around regular old folks who didn’t know Camille and Jimmy were ballers in the making.

By time Cam and Jacob were heading off to college, their parents had 529 college accounts that covered the entire cost of tuition for a public in-state university. If the kids chose to go to school away from home, they were responsible for working and maintaining their place of residence and feeding themselves. If they went to USC or another local college, their parents were willing to allow them to stay home rent free and of course, they would feed them.  Suffice to say, both Cam and Jacob decided it would be best to go to local colleges so they could work and save money.

After the kids graduated, Camille and Jimmy retired millionaires.

Sounds too good to be true? Unrealistic?

Actually, it isn’t. This describes many of the millionaires next door that are discussed in Thomas Stanley and William Danko’s book, The Millionaire Next Door.

 

How to Become the Millionaire Next Door?

See, there are a few things that set Jimmy and Camille apart. First, the careers they chose show that millionaires understand achieving a millionaire status isn’t automatically guaranteed just because you pursue a higher education with a fancy title.

In Jimmy’s case, he acquired no student debt and chose an occupation which allowed him to study the trade during high school and further at a local two-year technical college. He worked his way through school and graduated with no debt.

Camille chose a public service occupation and her student loan debt was forgiven. This couple started their journey together a step ahead of many of us who have gone to college to pursue expensive degrees without a guaranteed job.

Other things that set these two apart is they lived below their means. They sought financial independence and didn’t portray to society that screamed, “Aye, I’m ballin in these streets!” They raised self-sufficient children who modeled their behaviors, they budgeted, and they didn’t purchase a home that exceeded two times their income.

 

So what can we learn from them?

  1. Budget. Millionaires become millionaires by budgeting and that’s how they stay millionaires.
  2. Don’t live like you’re “rich”. Just because you have a couple of million in your account doesn’t mean you have to flaunt it.
  3. Earn and invest money early. Jimmy’s educational path was shorter and he was able to get to work early and begin investing earlier than most. Even if you do choose to go to college, you can still get a job and start investing as early as possible.
  4. Don’t make purchases based on how much you anticipate making in the future. Even though their income grew over the years, they didn’t purchase a home in anticipation of what they would make later on. They purchased a home well below their means and stayed there regardless of their increase in income.
  5. They didn’t live in a neighborhood that encouraged consumption. They lived amongst “regular folks” who sent their kids to public school, went to work every day, paid the bills, and didn’t try to keep up with the Joneses. (Although, I’m sure their neighborhood probably had a Mr. and Mrs. Jones lurking around there somewhere.)

Related Reading: Become More Frugal to Save More Cash

 

Here are a few things you can do to start living like a millionaire

 

Should You Read, The Millionaire Next Door?

There are a lot of details in this book that can’t be discussed here, but I’ve touched on some of the basic principles anyone who aspires to become a millionaire should know.

However, if you truly want to reap the benefits all this book has to offer its readers, I definitely encourage you to put this on your to-read list. The authors go into more details about the basic characteristics of three types of people: prodigious accumulators of wealth, under accumulators of wealth, and average accumulators of wealth.

It was interesting to learn what category I fell into and the behaviors I must possess to become the next millionaire next door. To become wealthy, it truly requires a change in mindset, a thorough understanding of certain financial principles, and the ability to not be influenced by the media and society’s expectations.

If you haven’t read it already, get your copy of The Millionaire Next Door and learn how to set yourself apart and be more like Jimmy and Camille. Or, you could be like those rappers and athletes on television. You know, the ones who are broke (I won’t say any names)!

 

Have you read The Millionaire Next Door? If so, what was your key takeaway from the book? If not, do you think it will be worth the read?

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Many want to become the next millionaire next door; however, there are many misconceptions about being a millionaire that's keeping them from achieving this status. See what it really takes to become a millionaire.

 

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Latoya Scott
Writer/Creator
Latoya is a writer for hire who loves talking about budgets and money. Her mission includes paying off $79,000 in student loans and aspiring other millennials to hustle their way towards financial freedom. Her work has been featured on The Huffington Post, Rockstar Finance, and My Fab Finance.

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20 Comments

  • Reply Rachel@TheLatteBudget June 27, 2016 at 12:23 pm

    It is funny how the richest people I know live the most humble lives! And I’m always surprised by people who look like they have it all – a nice house, a boat, new cars, private school -are sometimes up to their eyeballs in debt. It’s not about how much you make (though it helps) but how you direct your money makes the difference. Great perspective from this, and a reminder to live humbly!
    Rachel@TheLatteBudget recently posted…5 Ways to Be Productive While CommutingMy Profile

  • Reply Aliyyah @RichAndHappyBlog June 27, 2016 at 1:26 pm

    Number 4 is so important! I’ve been guilty of buying things and thinking my future self will be able to afford it. Such a terrible way of thinking.
    Aliyyah @RichAndHappyBlog recently posted…When Is An Information Product Worth Buying?My Profile

    • Reply Latoya S. June 27, 2016 at 1:35 pm

      Lol, yeah I used to be guilty. I would swipe my card for a COACH purse or something I didn’t really need in a heartbeat thinking that I was getting a bonus. I did usually get the bonus, but the company makes it clear every year that it’s not guaranteed. I would have been up the creek without a paddle if it hadn’t came through.
      Latoya S. recently posted…How to Become The Millionaire Next DoorMy Profile

  • Reply Sarah @ Couple of Sense June 28, 2016 at 12:10 am

    This post is so timely – I just listened to this book last week. My key takeaway from this book was to live well below your means. After I read it I was going through my budget to see how much further I could stretch my budget to see if I could add more money to my retirement accounts. I think the book has flaws; encouraging heavy investing in the stock market since the book was written at the end of the longest bull market in American history. Since the markets grew so well it made sense that people who invested in the beginning made money but everyone has a different risk tolerance and preference. The fundamental principles are there (save money, buy used cars, don’t keep up with others) and that’s the biggest takeaway.
    Sarah @ Couple of Sense recently posted…DI(wh)Y? Home RenovationsMy Profile

    • Reply Latoya Scott June 28, 2016 at 12:58 am

      Hi Sarah, I totally agree. Encouraging heavy investing is a tricky and complicated subject and something that I wouldn’t advise one to haphazardly pursue. Everyone needs to do their homework and approach investing in a logical matter that makes sense to their risk tolerance. Thanks for reading!

  • Reply Harmony@CreatingMyKaleidoscope June 28, 2016 at 4:44 pm

    This – “Don’t live like you’re rich.” I think a lot of debt is caused by spending money to portray an image of wealth. The advice to not waste money on appearances works both for getting out of debt and becoming a millionaire.
    Harmony@CreatingMyKaleidoscope recently posted…The Zombie Apocalypse Guide To Saving MoneyMy Profile

    • Reply Latoya Scott June 28, 2016 at 6:14 pm

      Very much so! Thanks for reading, Harmony!

  • Reply Tia @ financiallyfitandfab June 28, 2016 at 5:53 pm

    This is one of my favorite books. I think so often we are living to impress other people and purchase things that we don’t even like. For example, I bought a house a few months ago. The basics are furnished but there is nothing extravagent and I am perfectly happy with that. I have found a few pictures at Goodwill, but I plan on taking my time to furnish the house.

    • Reply Latoya Scott June 28, 2016 at 6:15 pm

      Same here! We have been in our home for 6 years and still have many basic things that came with the house. Thanks fo reading, Tia!

  • Reply DC @ Young Adult Money June 28, 2016 at 7:52 pm

    I always have a lot of respect for those who have made a lot of money but don’t flaunt it. It would be wonderful if everyone who became millionaires took this approach.
    DC @ Young Adult Money recently posted…How to Stay Motivated When on a BudgetMy Profile

  • Reply Holly@ClubThrifty June 29, 2016 at 10:42 am

    Millionaire Next Door is one of the first personal finance books I ever read. I definitely hope to be a millionaire next door! =)
    Holly@ClubThrifty recently posted…99 Ways to Make Extra MoneyMy Profile

  • Reply Becky@frametofreedom June 29, 2016 at 7:05 pm

    Great post Latoya. I have not read the book yet but it sounds like it is worth the read for sure! It sounds like a very practical read and educational for anyone who thinks you have to make a ton of money in order to be a millionaire. It isn’t about what you make, it is how you spend that determines if you will be financially successful.
    Becky@frametofreedom recently posted…Creating a Budget: Why It Doesn’t SuckMy Profile

  • Reply Alexander @ Cash Flow Diaries June 29, 2016 at 9:02 pm

    It is so inspiring reading posts like this where it really makes you feel anything is possible. Im hoping to be the millionaire next door someday and I guarantee you no one would ever suspect it from me based on possessions or even how I dress.

    Looking fwd to it someday!! 🙂
    Alexander @ Cash Flow Diaries recently posted…How Moving To The Midwest Can Help Speed Up Early RetirementMy Profile

  • Reply Christine C Renee July 16, 2016 at 3:42 am

    Hi Latoya,

    I just found your website through Financially Savvy Saturdays. So glad I did, you cover a lot of great financial information and write such inspiring posts!

    I absolutely loved this book, The Millionaire Next Door. What makes it so good is that years of research and hard facts went into it. You’ve written a wonderful post about it. Unfortunately, since I’m a late bloomer, I may be able to reach millionaire status in my 70’s but it’s never too late to start, right. 🙂

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