Thomas J. Stanley surveyed thousands of millionaires across America and learned valuable lessons about their habits, lifestyle, and career choices. Stanley went on to change the way millions around the world understand wealth. Stanley’s message is timeless and his work proves that it’s possible to become wealthy on an average salary.
Here are 10 valuable lessons learned from T. J. Stanley’s research:
1. Some people have “Big Hat, No Cattle”
There are those who are truly rich and others who pretend to be rich. The people around you driving expensive cars, living in mansions, and wearing fancy clothes are not usually wealthy, but rather chasing status symbols indicative of wealth.
2. Doctors and lawyers are typically poor
The highest-salaried occupations don’t necessarily lead to the accumulation of wealth. Doctors and lawyers are notoriously terrible at saving. These well-paid professions often attract people with lavish lifestyles who consume more than they are making. High-powered lawyers are constantly having to impress clients and therefore live beyond their means.
3. Self-made millionaires were NOT the best students
There is a possible inverse relationship between high academic achievers and their ability to generate wealth. The theory behind this relationship is that if you performed well in school, you likely excelled at working within an established system. In many cases, self-made millionaires became wealthy after overcoming adversity and hardships in life, which led to them becoming self-reliant, tenacious, and willing to take financial risks outside the normal system. High-income individuals who are proficient at accumulating wealth are less likely to have graduate degrees, law degrees, and medical degrees.
4. Millionaires are frugal, not cheap
Stanley distinguished between millionaires who were frugal versus those who were cheap. In most cases, self-made millionaires were frugal. these people did not have a lavish spending and hyper-consumption. He discovered that most millionaires live in average homes in inconspicuous middle-income neighbourhoods, with unremarkable cars in the driveway.
5. The rich have more modest tastes
Stanley found out that the average millionaire pays $16 for a haircut at a regular barbershop. He also found that only 6% of millionaires paid over $1,000 for their latest suit.
6. Rich people drive Toyotas not Lamborghinis
Another interesting finding was that wealthy individuals look for practicality and functionality over luxury and prestige. This was apparent when Stanley found out that Toyotas were the number one brand among millionaires.
7. Self-made millionaires live in middle-class neighbourhoods
Housing and transportation are most likely the two biggest monthly expenses. Mortgage and domestic upkeep on a big house in a gated community cost you dearly. Living in a lavish neighbourhood puts you around more social pressures.
8. Self-made millionaires take calculated risks
Wealthy individuals had to take some kind of calculated financial risk. Whether that be investing in the stock market or starting their own business. Too many people are afraid of failure. This fear scares them away from investing their money. Stanley found that self-made millionaires learn how to control their fears and minimize their losses by taking calculated risks.
9. The rich choose their partner’s wisely
Stanley found put that the wealthy choose their partners more wisely. They even knew their partner before they go rich or choose somebody with a frugal lifestyle. In the first case, even after getting rich their lifestyle remained the same. In the second case, they are more careful in picking a partner who is not just in for the money. Stanley concluded that most self-made millionaires reported that their spouses were even more frugal than them.
10. Millionaires value time over money
Millionaires spend their time on things that matter. Millionaires make a decisive purchase at a fair price than spend hours haggling to save a hundred bucks. Most millionaires devote their time to more important things like learning and practicing new skills. These tend to offer a better return on their time invested.
Sven Franssen